10 Things To Do After Forming An LLC



after forming an llc

When considering things to do after forming an LLC, it’s vital to remember that while you’ve recently set up a Limited Liability Company (LLC) or incorporated, and thus laid a significant legal groundwork for your enterprise, this is only the beginning of your business journey.

Forming an LLC aims at both setting the legal foundation for your business and protecting your personal assets.

Things to do after forming an LLC may have been among the questions you had while you were contemplating this step, but now that the decision to form an LLC has been made, you probably have even more concerns about what to do next.

Is creating an LLC enough to let you legally open your doors for business? Not exactly. There are several nuances to consider before you’re fully prepared to conduct business.

Here are 10 things to consider before you’re ready to do business, which may include meeting regulatory requirements, obtaining necessary permits, and setting up financial management systems.

What You Need To Do After Forming An LLC

1. Obtain Any Necessary Business Licenses and Permits

Many new business owners think that forming an LLC or corporation is the same as getting a business license. Then unfortunately, some realize this isn’t the case when they are fined for operating without a license.

Think of it this way: getting an LLC is the first step and creates a legal foundation for the business. A business license gives you the right to operate.

Depending on what kind of business you have and where you live, you may need to get business licenses from your state, county, or town.

Most licenses are relatively inexpensive and getting one upfront will save you money and keep your business legit. Check with your local board of equalization offices, or find a service to determine which permits your business needs to legally operate.

Understanding the difference between an LLC and a business license is crucial. To illustrate, consider these typical licenses and permits that various businesses might need:

  • Zoning permit
  • Permit from the health department
  • Professional licenses
  • General business operation license
  • Home occupation permits

Things You Need To Do After Forming An LLC

2. Get a Seller’s Permit

Across the country, different states impose various regulations on businesses. Many states require what’s commonly referred to as a seller’s permit (or a name akin to it).

This isn’t exclusive to large corporations but extends to sole proprietors, LLCs, and partnerships that sell taxable goods and services.

For instance, in a state like California, this permit becomes crucial for any business that ventures into selling or leasing property that’s brought under the state’s retail sales tax umbrella.

It’s not merely a suggestion but a mandate. Before you immerse yourself in the commerce world, ensure that this permit is in your business’s arsenal.

3. Get an Employer Identification Number (EIN)

An EIN, or what many would recognize as a federal tax ID number, isn’t just a random set of digits. It’s a beacon for the IRS to pinpoint your business in a sea of enterprises and meticulously track its transactions.

Imagine an EIN as the corporate counterpart of a person’s social security number. If you are considering hiring employees, an EIN becomes non-negotiable.

Yet, even if you’re running a solo operation, procuring an EIN remains prudent. This is particularly advantageous when you’d prefer to hand over your EIN, a more impersonal identifier, instead of your intimate social security number to associates like clients and vendors.

Things You Need To Do After Forming An LLC

4.  Apply for S Corporation S Treatment (If Applicable)

An LLC has “pass-through” tax treatment, meaning that the business’ profits and losses are passed along and reported on the business owner’s tax return.

As the owner of an LLC, you must report all profits (or losses) of the business on a Schedule C with your personal tax return.

LLC owners who are active in the business must also pay self-employment tax on the profits.

In some cases, it may benefit you to elect S Corporation status. This enables you to split your business’ profits into salary and distributions. You’ll pay self-employment tax (or Medicare/social security tax) on the salary portion, but not on the distributions.

To elect S Corporation status, you need to file form 2553 with the IRS (it’s free) within 75 days since forming the LLC, or 75 days from the start of the current tax year.

For those weighing the advantages of an LLC versus an S Corporation, the table below offers a clear breakdown of their primary differences in terms of taxation and formalities:

Feature/RequirementLLCS Corporation
Tax TreatmentPass-through, owners report all profits/losses on personal tax returnsEnables splitting of profits into salary and distributions
Self-Employment TaxPay self-employment tax on all profits for active ownersPay only on the salary portion
Form to File for Tax TreatmentNone (default treatment)Form 2553
Deadline for Tax ElectionNot applicableWithin 75 days since forming or start of tax year

5. Open a Business Bank Account

Transitioning from a business idea to a tangible LLC is exhilarating. But what follows next? You should steer towards establishing a business bank account under the LLC’s name.

Such an account isn’t just for depositing checks made out to your entrepreneurial venture. It’s a lighthouse, demarcating the waters between personal and professional.

Especially when you delve into the world of corporations and LLCs, the law firmly dictates a separation of personal and business finances. Thus, fortifying your business with its own bank account isn’t a mere suggestion, but an unequivocal necessity.

10 Things You Need To Do After Forming An LLC

6. Apply for a Business Credit Card

While ensuring your business has its own bank sanctuary, don’t overlook the power of a business credit card.

Not only does this card let you channel all your business expenditures through one avenue, but it also records your financial journey throughout the year. Come tax season, and you’ll find this audit trail a godsend.

More so, wielding a business-exclusive credit card fortifies your “corporate veil”, a protective shield that stands between potential business mishaps and your personal assets.

7. Insure Your Business

While forming an LLC or incorporating does help protect your personal assets from any liability of the company, it doesn’t protect the business itself from losses.

That’s why you should consider getting a general liability insurance or a Business Owners Policy (BOP). These policies will broadly cover your business against accidents, injuries, and negligence claims.

In addition, if you’re selling a product, you’ll need product liability insurance. And, if you provide a professional service (i.e. lawyers, accountants, notaries, real estate agents, insurance agents, hair salons, consultants), you’ll need to take out a professional liability policy.

8. Foreign Qualify in Other States (If Applicable)

If your LLC will be doing business in a state other than the state where you formed the LLC, you will need to register in the new state(s).

Examples of “doing business” can include: Opening an office or store in another state, when a significant portion of your company’s revenue comes from another state; when you have employees working in another state; and when you frequently conduct in-person meetings in a state.

To better understand what ‘doing business’ in another state means, here are a few scenarios to consider:

  • Opening an office or store in another state
  • A significant portion of your company’s revenue coming from another state
  • Having employees working in another state
  • Frequently conducting in-person meetings in a state

10 Things You Need To Do After Forming An LLC

9. Get a Doing Business As (DBA)

If like most businesses you are going to be operating under any variation of your official company name (i.e. Company vs. Company.com vs. Company, Inc…), you will need to file a Doing Business As (DBA) for each of the variations. You should have your LLC file the DBAs so they operate underneath the LLC.

10. Make a Plan to Keep Your LLC Compliant

Once you become a corporation or LLC, you’ve got to operate your business at a higher administrative level than you’ve been used to as a sole proprietor.

Both LLCs and corporations often need to file an annual report with their state, as well as keep up with their quarterly tax payments.

Mark these important dates on a calendar ahead of time, or sign up for a service that will automatically send you alerts ahead of key state and federal filing deadlines.

Things You Need To Do After Forming An LLC

More Things To Do After Forming An LLC

Stay Updated on Tax Obligations and Benefits

After forming your LLC, it’s imperative to stay informed about the tax obligations and potential benefits applicable to your business structure. Different states have varying tax rules for LLCs, including franchise taxes or annual report fees. Additionally, understanding the tax deductions and credits available to your business can significantly impact your financial planning. Regularly consult with a tax professional to ensure compliance and to take advantage of tax-saving opportunities.

Implement Accounting and Bookkeeping Systems

Setting up robust accounting and bookkeeping systems is crucial for managing your LLC’s finances effectively. Choose accounting software that aligns with your business needs, and consider hiring a professional accountant or bookkeeper to manage your financial records. Keeping accurate financial records not only aids in tax preparation but also provides valuable insights into your business’s financial health.

Develop a Strong Business Plan

A well-crafted business plan is vital for guiding your LLC’s growth and securing financing or investment. Your business plan should outline your business goals, strategies, market analysis, and financial projections. Regularly review and update your business plan to reflect changes in the market and your business objectives.

Establish Business Policies and Procedures

Create clear business policies and procedures to ensure smooth operations. This includes policies for customer service, returns and exchanges, employee conduct, and other operational aspects. Having established procedures in place helps maintain consistency and can improve efficiency.

Set Up a Record-Keeping System

Maintain a comprehensive record-keeping system for your LLC. This should include documents related to your LLC formation, financial records, contracts, employee files, and regulatory compliance documents. Proper record-keeping is essential for legal protection and operational efficiency.

Regularly Review and Update Legal Documents

Ensure that your LLC’s legal documents, such as the operating agreement, are up-to-date. As your business grows and evolves, these documents may need revisions to reflect new partnerships, business structures, or changes in ownership.

Protect Intellectual Property

Identify and protect your LLC’s intellectual property, including trademarks, patents, and copyrights. Securing your intellectual property rights helps safeguard your brand and gives you legal recourse against infringement.

Focus on Marketing and Brand Development

Invest in marketing and brand development to increase your LLC’s visibility and attract customers. Develop a strong brand identity, and use various marketing channels, such as social media, email marketing, and content marketing, to reach your target audience.

Build a Strong Online Presence

In today’s digital age, having a strong online presence is crucial. Develop a professional website, engage on social media platforms, and consider implementing SEO strategies to enhance your online visibility and reach a wider audience.

Network and Build Strategic Partnerships

Networking and building strategic partnerships can open new opportunities for growth and collaboration. Attend industry events, join professional organizations, and connect with other business owners to expand your network and explore potential partnerships.

Prioritize Customer Feedback and Service

Foster strong relationships with your customers by prioritizing excellent customer service and actively seeking feedback. Use customer insights to improve your products, services, and overall customer experience.

Stay Informed on Industry Trends and Changes

Keep abreast of industry trends, market changes, and regulatory updates. Staying informed allows you to adapt your strategies and remain competitive in your industry.

Create a Crisis Management Plan

Prepare for unexpected challenges by developing a crisis management plan. This plan should outline steps to handle emergencies, such as natural disasters, data breaches, or significant market changes.

Explore Growth and Diversification Opportunities

Continuously explore opportunities for growth and diversification. Consider expanding your product line, entering new markets, or adopting innovative business models to drive your LLC’s growth.

Foster a Positive Company Culture

Cultivate a positive company culture that aligns with your LLC’s values and mission. A strong company culture can improve employee satisfaction, productivity, and retention.

Plan for Business Succession

Consider your LLC’s future and plan for business succession. This includes preparing for retirement, passing the business to a family member, or planning for a potential sale.

Invest in Continuous Learning and Development

Encourage continuous learning and development for yourself and your employees. Invest in training programs, workshops, and educational resources to enhance skills and stay competitive.

Embrace Sustainability and Social Responsibility

Consider incorporating sustainability and social responsibility into your business practices. Adopting eco-friendly practices and supporting community initiatives can positively impact your brand image and customer loyalty.

Measure and Analyze Business Performance

Regularly measure and analyze your LLC’s performance using key metrics and analytics tools. This data-driven approach can help you make informed decisions and identify areas for improvement.

Stay Proactive and Adaptable

In the ever-changing business landscape, staying proactive and adaptable is crucial. Be prepared to pivot your strategies in response to market shifts, technological advancements, and customer needs.

Seek Legal and Financial Advice Regularly

Regularly consult with legal and financial advisors to ensure that your LLC remains compliant and financially sound. Professional advice can help you navigate complex legal and financial challenges and make strategic decisions.

Celebrate Milestones and Achievements

Finally, take time to celebrate your LLC’s milestones and achievements. Recognizing successes can boost morale and motivate you and your team to strive for continued growth and excellence.

Working from Home Photo via Shutterstock

CorpNet offers business formations, filings, state tax registrations, and corporate compliance services in all 50 states. Express and 24 hour rush filing services available upon request. Click here to learn more.

45 Comments ▼

Nellie Akalp Nellie Akalp is a passionate entrepreneur, recognized business expert and mother of four. She is the CEO of CorpNet, the smartest way to start a business, register for payroll taxes, and maintain business compliance across the United States.

45 Reactions
  1. It will even help if you have someone who is knowledgeable in all these permits to handle everything. As a small business owner, I like to focus more on my business and these things can often add to the confusion. I wouldn’t mind paying someone to process everything for me.

  2. Martin Lindeskog

    How many LLC are they in the U.S? Is this often the best option for a small business start-up?

    • Hi Martin –

      LLCs are very popular for small-business owners, because they avoid many of the formalities corporations have. Corporations require stock, shareholders, a board of directors, regular meetings, etc. Many small business owners don’t want to have to worry about those things and just want to focus on growing their business, so they often opt for the LLC.

      Thanks for reading and commenting on my post!
      Nellie

  3. I agree with the actions suggested by the author here. However, before taking these actions, the first step I do as a business attorney is to have the members hold their first meeting and adopt resolutions authorizing the taking of all these actions. For example, when opening a bank account, many banks will want to see that the person filling out the paperwork is authorized to do so and that the LLC has approved the taking of such action. The corporate resolution will have the necessary language that gives the bank the assurance it needs. The same goes for just about all of the other actions in the list.

    This is part of the service that I provide when setting up an LLC so that, as Aira stated, the business owner can go about doing what he or she does best!

  4. Michael Langley

    Great business tips. I have an LLC myself. LLC is the best option for small business owners. Getting an attorney can save lots of time.

  5. Hi Neillie,
    It is interesting to read about LLC formation in the states. I am providing a similar services in the UK. The process is slightly different than here. For example, bank account and credit card. These are usually included in the company formation package you buy. Also point 8 shows me how big the USA is. Does every state has a different tax regulation? How much does a LLC formation cost?
    Cheers,

    • Hi Graeme,

      I would definitely recommend speaking with an accountant in order to get your tax-related questions answered. Filing an LLC has a different fee in each state, so it really just depends on how much the state you’re looking to file your LLC in charges.

      Thanks for reading and commenting!
      -Nellie

  6. In some states like New York, where the law is a bit tricky, it’s very important that you consult a knowledgeable attorney BEFORE you form your LLC. Failure to do so could cost you thousands of dollars in unnecessary fees and expenses.

  7. If you want to assure a particular name for an LLC and want to file for that now but don’t intend to open the business for another year or two, can you go ahead and get the name secured without having to officially start operating right away? Are there any requirements for filings or otherwise that need to be done between now and when it is open for business?

    • Hi Jane,

      Great question! A lot of business owners don’t know this, but in most states you can actually reserve a name with the Secretary of State without actually moving forward with the LLC. If you’d like to do this, please contact Katie Hendrix in my office at 888.448.2638 x110, and she can get that taken care of for you!

      • Hi Jane!

        Just wanted to follow up with you and see if you’re still interested in reserving your business name, or perhaps even moving forward with the LLC? I’d love to assist you! Please feel free to call me anytime at 888.449.2638 x110, or you can reach me via email at katie@corpnet.com 🙂

  8. Hi! Do I have to put LLC next to my logo name, my Facebook page and my website?
    Thank you!

    • Hi Marina,

      Generally speaking, it’s required to file a DBA in order to do business/advertise/accept payments under any names other than the full, legal business name. If you have any other questions or would like assistance with filing a DBA, please contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  9. I just bought a building for my business and want to go from a DBA to an LLC. But my question is? Is it better to put the LLC in my personal name or business name… My accountant says put the LLC in my personal name and a layer friend says put it in the business name and pay rent to my self.. And if I pay rent to my self… do I need legal lease agreement with my self?
    Thanks Ann

    • Hi Ann,
      Thank you for your question. You can put the LLC in whichever name you choose. Clients have done both ways. However, this is a question that would be better suited for your attorney to answer.
      If you have any further questions please feel free to reach out to my team at 888-449-2638 X109 and ask for Chava

  10. Hi my name is Tom I am legally blind and is going into a Rehabilitation program with the Massachusetts Commission Of The Blind Randolph Sheppard act vending program. Their program allows people with site disabilities to be self-employed in locations in federal building. Im looking to tapply for an IEN number however I am being told I should not apply for a solo prioorotor but for an LLC.
    I’m wondering if you could help me to put me on the right side.

    • Hi Tom,

      Generally the LLC is preferred over a simple sole proprietorship as it offers both name protection and liability protection. As every situation is unique, please feel free to contact Katie Hendrix in my office for a free business consultation. She will be able to assist you with outlining your options, and she can even help you get your business filings completed! Please contact her at 888.449.2638 x110 or by email at khendrix@corpnet.com

  11. Hi, I am self employed doing sales working on commission. Is it better to get my checks written to an LLC or to my own name?

    • Hi David,
      Have you registered an LLC? If so, we find that most business owners prefer to have their checks written out to their LLC. If you have any questions, or would like assistance with filing an LLC, please feel free to contact Katie Hendrix in my office for a free business consultation at 888.449.2638 x110.

  12. Hi! I am not starting a business per se, but will be working as an independent contractor (I am a physician and will be doing case reviews). The company is out of state, but I will be working online from home. I have set up an LLC but do I need to register in the state the company is based in? I’m guessing I need to set up a business bank account to receive payment, but do I need to do anything else?

  13. Hello, if I take out a business loan (that has a collateral/personal guarantee) but set my business up as an LLC — does that mean that my personal assets from my lender are still being protected due my business being set up as an LLC?

    • Hi Jackie,
      Thanks so much for reading and commenting. Generally speaking, LLCs provide liability protection for the members’ personal assets. However, if the individual members make guarantees outside of the LLC, the LLC liability protection would generally not cover any transactions that do not involve it. Please feel free to call my office at (888) 449-2638 and speak with one of our business filings experts if you had any additional questions. Thanks again!

  14. My significant other and I currently have an LLC formed with a DBA for our wood renewal business. I’m looking at signing up to be an independent Sales Rep with a beauty company (think Mary Kay). What are the benefits of adding this new business under my LLC or should I just keep it independent?

    • Hi Mia,
      Thanks for reading and commenting. There are pros and cons to each option. Please give my company a call at your earliest convenience to speak with one of our Business Filing Specialists and take advantage of our Free Business Consultation to go over these differences. You can reach us at (888) 449-2638. Thanks so much and we look forward to hearing from you!

  15. Hello, I could not find an answer to this specific question so apologies if I missed it. We are forming an LLC “LLC Name” (example) and will be starting with our first business as an online boutique kids store. Once the LLC is formed we will file for a DBA for the online store, but not sure if we need to file one or multiple DBA. Let’s say the online store will be “toysandtoys.com” (example) but the name is “Toys + Toys”.

    Do we need to file a DBA for “Toys + Toys” only, or do we also need to cover variations like “Toys and Toys”, “toysandtoys”, “toysandtoys.com”, “Toys & Toys” etc? Thank you so much for any help!

    • Hi Zoltan,
      Thanks so much for reading and commenting. I cannot give legal, tax or financial advice so I would be unable to tell you specifically what you should do in your case. However, for example, my company name as registered with the Secretary of State is CorpNet, Incorporated. We have DBAs for CorpNet, CorpNet.com, etc. I hope this helps in answering you questions but please feel free to reach out to Milton in our office at (888) 449-2638 with any further questions. Thanks again!

  16. Making sure to get the right kind of business licenses from your state, county, or town is excellent advice. I would imagine that the types of licenses required for your LLC could change depending on your location, and you would definitely want to have everything properly taken care of. Finding a professional who could help provide you with the necessary information and help you fill out everything properly seems like it could be very beneficial when you start your LLC.

  17. I am currently being audited by the IRS and am very nervous about starting my business. It has already been 2 years and I am tired of putting off my goals. Should I wait until I have everything resolved with them before jumping into beginning the business?

    • Hi Sherril,
      Thank you so much for reading and commenting. Unfortunately, I am unable to give you direct legal advice so can’t speak to your specific situation. However generally speaking, when filing an LLC or Corporation, there are typically no issues on the state level but there could be issues once attempting to obtain and EIN. Please give Amanda in my office a call at (888) 449-2638 ext 105 and she would be more than happy to assist you as much as she can or point you in the right direction of legal advice. Thanks again and we look forward to hearing from you!

  18. I made an application to NY state to start an LLC. My application is currently being reviewed. At what point am I expected to advertize this company in 2 newspapers?

    • Hi Lily,
      Thanks so much for reaching out. Generally, the publication is required once the LLC has been accepted and filed by the Secretary of State. If you need any help with this process, please don’t hesitate to reach out to Amanda in our office at (888) 449-2638. Thanks so much!

  19. i and my partners are opening up a Ice cream franchise, we have already set up and been approved for the LLC, what other licenses or permits are needed before we open our doors for business, i keep reading conflicting material and dont know what’s needed and what’s not..plz help.

    • Hi Noah,
      Thank you so much for reading and commenting. As you know, I cannot give legal, tax or financial advice so am unable to speak to your specific situation. However, any licenses or permits required are dependent upon the type and the location of the business. We have a Business License Compliance Package that searches what licenses or permits would be required for your business type as well as in the location. Call Milton in my office at (888) 449-2638 to learn more! Thanks so much and we look forward to hearing from you!

  20. I’m really interested in starting my own small business. However, mine is connected to the medical field. I want to open up my own Dental Laboratory. What steps would I take to get this going.? Any information or references will be appreciated.

    • Hi Robert,
      Thanks so much for reading and commenting. While I can’t speak to your specific situation, I would love to give you general information and help you out as much as I can. Please give Amanda Beren in our office a call at (888) 449-2638 ext 105 so she can collect some more information from you and answer all of your questions. Thanks again and we look forward to hearing from you!

  21. I am preparing to do one person consulting business for food safety and nutrition with official start up in 3 months. No investors, will rent space to present classes and so set up work from rural home. Will form LLC but how do i do initial costs for supplies (computer, etc)-can i do a personal loan from me and then pay me back?

    • Hi Wendy – thanks for reading and commenting. Generally speaking, yes one option is to make a loan and have the LLC pay you back. Of course, again, this is generally speaking. Every situation is different. I hope that helps!

  22. So, I was curious in starting an LLC so I can put my tshirt graphics and my published books under a single brand but didn’t know if it is the best route. I also wanted it so I can do more to help promote people’s creative side. Can anyone help me

  23. Nowadays all business consultants or startup formations agencies include business credit cards & an opened bank account in the package so that people can start immediately. Even they take care of every other thing that may come as obstacles. But it is a very helpful article if you start on your own without consulting with a professional one. Thanks for the article.