Steps after forming an LLC
File annual reports and beneficial ownership information
Annual report filing:
Okay, this step is usually applicable after you’ve been trading for a tax year, but it’s useful to know it now.
An LLC annual report, also known as a “statement of information”, provides your state with crucial details relating to your business, including any changes or information that occurred since your last filing period.
This enables your state to inform you of any added legal requirements, such as licenses you might need to continue doing business.
A good piece of advice is to start a system that records all your business’s dealings. This way you won’t have to spend days or weeks looking for necessary paperwork with a deadline looming ever closer.
What should you include in your annual report?
Include your LLC name, office address, your registered agent’s information (if you’ve used one), and the LLC number that your secretary of state provided upon forming.
Each state has its own LLC laws and regulations and varying requirements for including in an annual report.
Annual reports include:
How to file your annual report
Most states require you to file an annual report for your LLC, which you can do online via your state’s website.
As you may have guessed by now, you’ll need to pay a fee. Fees vary from state to state, ranging from $50 in Mississippi to $500 in Massachusetts.
What happens if you don’t file an annual report for your LLC?
While it may seem a formality, filing your annual report on time is essential, and the consequences of failing to file can be severe. For example, some states may impose a late fee, penalties, and taxes, while others may even dissolve your LLC.
Open a business bank account
As an LLC owner, neither state nor federal law requires you to have a separate business account. However, there are several reasons why you should:
Obtain the required business licenses and permits
In most states, you can form an LLC without a business license. Still, you’ll need one and other permits to make sure your LLC operates and complies with state laws.
Requirements for business licenses and permits may vary from state to state. You can find out what permits and licenses you’ll need in your LLC’s registered state by visiting the SBA website. In most cases, you can apply for licenses and permits online.
License types:
How to obtain business licenses and permits
First, choose your state, then decide which city and county you’ll be operating in. Next, visit the Small Business Administration website and look for information regarding city and state regulations for your location.
You’ll then need your business code; you can find it using any of the many websites providing this service. Also, check if you require any permits besides the business license.
Have a credit card ready to pay the required filing fee, ranging from $50 to $500.
Learn more about tax requirements
One of the best investments you’ll make when starting an LLC is employing a seasoned accountant whose experienced with running LLCs, and educating yourself about tax.
The method in which you will be taxed depends on how your form your business structure. You may elect to be taxed as a Sole Proprietorship (in case you’ve formed a single-member LLC), as a Partnership (multi-member LLC) or instead elect an S-Corp status.
Accountants are there to ensure you abide by federal and state tax laws, file your returns on time and in the correct manner. But they can also save you a small fortune over the years by applying legal tax reduction strategies that a less experienced general accountant might be unaware of.
But you can also help yourself and reduce your bill by learning how to keep your debit and credit books in order.
LLC tax filing tips
First, find and take advantage of any eligible tax deductions or credits available to your LLC.
Second, always review business tax deadlines in advance and add them to your calendar. Plus, you can always hire a certified accountant or tax professional to file your taxes.
Third, research and understand your state’s tax requirements.
The forms you’ll need to complete your LLC taxes depend on 3 things
Get business insurance
Business insurance can help protect you against unforeseen mishaps, like fire and water damage, stock and premise damage, a missed deadline, or a client data breach.
Common everyday risks such as a slip-and-fall injury, an employee car accident, or a work-related injury. Some policies also cover supply breakdown, business interruption compensation, and legal costs.
You might need “public liability insurance.” in the case of a customer injuring themselves while on your business property.
Furthermore, some states require LLCs to have additional insurance, while others leave it up to your discretion. In addition, if you have employees, you must have workers’ compensation, unemployment, and disability insurance.
Visit your state’s website to find the exact insurance requirements your business model requires.
