Start an LLC FREE^*

Businesses can save up to $2,500 per year with a Rocket Legal+™ membership. This calculation is based on total savings on an initial business registration and registered agent, trademark, and business tax filing services for Rocket Legal+ members (a total cost of $924.97) compared to Rocket Legal members (a total cost of $1,949.96). This is in addition to savings on the average cost of 5 hours for document preparation by a non-Rocket Lawyer network attorney at the average attorney hourly rate in the U.S. of $300 (an estimated cost of $1,500 when purchased without any form of Rocket Lawyer membership) compared to unlimited use of customizable business documents for both Rocket Legal+ and Rocket Legal members at no extra cost.

An LLC, or limited liability company, is a relatively new type of business organization. The first LLC law was passed in 1977. Since then, every state has enacted legislation allowing the formation of LLCs.

LLCs share a significant characteristic with corporations: limited liability. In a corporation, the corporate officers, directors, and shareholders cannot be held liable for any debts of the corporation unless they are liable under other laws. This is true only if management takes care to preserve the corporate formalities, such as maintaining separate bank accounts, holding regular meetings, making minutes of those meetings, and generally treating the corporation as a distinct entity under the law. If management fails to take the steps, then the law allows the "piercing of the corporate veil" which can subject officers, directors, and shareholders to individual liability. An LLC has the same protections from liability as the corporation—and the same vulnerability if not treated as a separate entity.

LLCs also share a significant characteristic with partnerships, or, if the LLC is owned by a single member, with individual taxpayers. Income to an LLC is not taxed at the entity level. Instead, it is included in the income tax returns of the members or single individuals who own the LLC.

To form an LLC, you must file a document with the state in which the LLC is to be created. This document is usually called the Articles of Organization, but sometimes it is called something else, depending upon the state. The Articles of Organization state the name of the LLC, its business address, and the types of business the LLC will engage in.

The Articles of Organization also state the name and address of the registered agent for the LLC. The registered agent is the person or company designated to receive lawsuits, and  serves as the contact point between the state and the LLC. The registered agent also receives official correspondence from other businesses.

How long it takes to register an LLC depends upon the state in which it is organized. In the past, organizers would mail Articles of Organization to the state, along with the required filing fee. 

Later, some states began authorizing fax filing. Today, most states have set up e-filing systems that allow filing of various documents, usually including Articles of Organization for an LLC.

In short, it can take days to weeks to register an LLC, and the timing will depend on the state in which you file.

The cost of registering an LLC can vary depending on what your business requires. From legal advice to filing fees to hiring a registered agent, it’s all about what you need. State filing fees vary greatly, from $40 to as high as $500. Your state of registration might also charge an annual fee to keep your LLC current.

The business services team at Rocket Lawyer can help you navigate the processes and systems to ensure you meet all the legal requirements in order to file quickly and correctly. Rocket Legal+ members get their first business registration filing for free, paying only the state filing fees, and also get access to professional services for up to half off, including registered agent services, tax prep and filing, trademark registration, and more.

If your business does not have a physical address in your state (P.O. boxes are not acceptable substitutions), you may be required to have a registered agent. Registered agents accept official and legal correspondence on behalf of your business. While you’re setting up your LLC, why not set up Rocket Lawyer as your registered agent at the same time? Better yet, if you have a Rocket Legal+ membership, you can save on your business registration and your registered agent services with the membership that pays for itself.

There are benefits to starting your own LLC, even if you work alone. The main benefit is liability protection. Depending on how you file, there may or may not be tax advantages.

Limited Liability: Starting an LLC can help protect your personal assets. If your business fails or if you are sued, your business is sued and not you personally. In most cases, unless you assign personal assets as collateral, your personal assets may be protected if your business declares bankruptcy or is on the losing side of a lawsuit.

Federal Taxes: You can file taxes as a "disregarded entity" or as a corporation. If you file as a "disregarded entity," then you are liable for pass-through taxes. This means you file your business income with your personal taxes and you will have to pay self-employment taxes. If you file as a corporation, your business files as a business separate from your personal taxes. You'll benefit from discussing with your accountant what option may be best for you.

Yes. Different states have differing laws and requirements for starting an LLC. Learn more about the requirements in the state or states you are considering from the list below: