Filing an LLC takes minutes. Preparing correctly takes planning. Most mistakes happen because owners file first and think later. The result is rejected filings, tax issues, banking delays, and ownership disputes.
Before submitting formation documents, certain decisions must be finalized. The state only records your choices. It does not help you correct them.
Choose a Legally Available Name
Every state requires a unique business name distinguishable from existing entities.
You must confirm:
Name is not already registered in the state database
Includes required identifier such as LLC or Limited Liability Company
Does not include restricted terms like Bank or Insurance without approval
Trademark conflict risk is checked separately from state search
State approval does not equal trademark safety. Many businesses must rebrand after receiving a cease and desist because they skipped trademark search.
Decide Ownership Structure
You must determine members before filing. Changing later requires amendments and can create tax complications.
Define:
Who owns the company
Ownership percentages
Voting rights
Capital contributions
Profit distribution method
Even single member LLC owners should document this for banking and tax clarity.
Appoint a Registered Agent
Every LLC must maintain a legal contact address inside the formation state.
The registered agent must:
Have a physical street address in the state
Be available during business hours
Accept lawsuits and legal notices
Missing service of process can result in automatic court judgment.
Determine Your Business Address
You will need at least one address ready before filing.
Typically required:
Registered agent address for legal service
Principal business address for identification
Mailing address for correspondence
This becomes public record in most states.
Prepare an Operating Agreement
Most states do not require filing it, but banks and partners often require it.
It defines:
Management structure
Member authority
Profit allocation
Exit rules
Dispute handling
Without it, state default laws control your business, not your intentions.
Choose Tax Classification
By default:
Single member LLC taxed as sole proprietorship
Multi member LLC taxed as partnership
You may elect S corporation taxation later if eligible. Deciding early helps avoid payroll and accounting corrections.
You should already know:
Expected profit level
Whether owners take salary
Whether investors will join
Understand Licensing Requirements
Formation does not grant permission to operate.
Possible requirements:
Local municipal license
Professional license
State industry permits
Sales tax registration
Many new businesses get penalties because they open immediately after formation without checking regulatory approvals.
Plan Your Banking Setup
Banks require consistent information across documents.
You should have ready:
Formation name exactly matching filing
Ownership details
Operating agreement
Business address consistency
Mismatch between formation data and application data often causes account rejection.
Prepare Initial Capital Contributions
Even if minimal, record the amount each member contributes.
This affects:
Ownership proof
Tax basis
Future investor evaluation
Dispute prevention
Verbal agreements are the main cause of early partner conflicts.
Decide Management Type
You must choose one when forming:
Member managed
Manager managed
This affects who can legally sign contracts and bind the company.
Changing later requires state amendment.
Key Principle
Filing creates the company.
Preparation determines whether the company works.
The state only records information. It does not correct bad planning.
Resources
IRS EIN application
https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
IRS LLC tax classification
https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc
Small Business Administration business registration steps
https://www.sba.gov/business-guide/launch-your-business/register-your-business
Trademark search USPTO
https://tmsearch.uspto.gov
National Association of Secretaries of State business name search portals
https://www.nass.org/business-services