How to Start an LLC (Limited Liability Company)
A limited liability company (LLC) is a popular way of setting of a business because it
allows the owners to limit their personal liability for actions taken by the company.
While an accountant or an attorney can set up an LLC for you, it is usually pretty easy
to complete the formation process yourself. Keep in mind that each state will have
different rules for forming an LLC, so it is important to look at your specific state laws
before proceeding.
Naming Your LLC
Learn Your State's LLC Laws
The name that you choose for your LLC must comply with your state's laws. While there
will be variation, most states do not allow LLC names that are duplicates of existing
business names or extremely similar to an existing name. States also may have other
restrictions on the type of name you can choose. For example, in Texas, an LLC name
cannot include profanity language that is obscene in nature.
To search for your state's laws regarding LLC formation, visit
Nolo's How to Form an LLC and choose your state.
Choose a Unique Name for Your LLC
Choose a name that complies with your state laws and properly represents your business.
While there is no exact formula for choosing the best name, you should choose something that is:
• distinct,
• easy to remember,
• easily spelled and pronounced,
• suggests the items or services that you sell, and
• distinguishes you from your competitors.
Include "LLC" or Some Variation in Your Name
Most states require you to include, as part of your company's name, the letters "LLC," "L.L.C.," or
"Limited Liability Company." Even after you create your company's name, do not omit these identifying
letters on marketing materials, advertisements, or business transactions. Doing so may lead to
unintended consequences. For example, if you leave "LLC" out of your name while doing business, a judge
may find that you entered into a business deal as an individual, and not as an LLC. If this happens,
you may be found personally liable and may not receive the limited liability shield you anticipated.
Ensure That Your Chosen Name is Available
In order to register your LLC with the name you've chosen, you must search to make sure that the
name is available in the state where you plan to file your LLC. To check name availability, you must
look through the secretary of state's database of registered names. Most states have an online database
that you can use to search for a small fee. Additionally, some states will allow you to reserve a
name for a short period of time before registration so no one else takes your name while you are
deciding whether to use it.
Reserve Your Business Name
In some states, you can register your business name when filing your articles of incorporation.
However, in other states, you must separately register your name before forming your LLC. For example,
each business that wants to operate in Texas must register its name separately from the articles of
incorporation.
Some states will charge a fee for name registration. To find out the specific requirements for your
state, visit your secretary of state's website.
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