December 29, 2003

How To Create LLC

So I had a need to create a (one-member) LLC for my consulting work. After some googling I found out that everybody wants to get some money in order to help you do this, but after chat with my collegue I understood that it is actually not that complex as it sounds (but not as simple as it could be, as well).

Before you read any further, standard disclaimer: IANAL, and even do not play one on Slashdot. :-)

Ok. First of all, you should start off with submitting an application to the office of taxation and assessments of your state (Google seems to know them all). On the site of Maryland State Department of Assessments and Taxation, there is a form and instructions for filling out an Articles of Organization for the Limited Liability Company. After filling in and printing out the form, it should be mailed with the check to the department. After some time (two to four weeks, me thinks), you'll get a letter stating that your company has been registered. You'll get assigned a number, and you can check status of your company (and order a certificate, if you need) in the Certificate Of Status system.

Next step is to get a federal employer identification number, know as EIN. It is useful for purposes of creating business bank accounts and credit card accounts. This can be done online, by filling out the SS-4 form. More information about this form can be found on Small Business / Self Employed section of the IRS website. Also, read Instructions for Form SS-4 (in PDF format), it has a paragraph about LLC, and how they are treated for federal tax purposes.

Once you have your EIN (you'll get provisional EIN immediately if you apply via internet), you can open a bank account. Credit Union I use provides free business savings & checking accounts to its members, so you may want to check yours (if you are a member of CU).

And the last one, don't forget that you need to send a check quarterly with estimated taxes to the IRS.

Posted by Vadim at December 29, 2003 6:59 PM