How Long Does It Take To Get an LLC?

Creating a limited liability company is exciting for a fledgling business, but how long does it take?Across all 50 states, we analyzed data and found it takes an average of 14 to 21 days to set up an LLC. You need to understand each stage of the formation process to determine how long it will take. Throughout this article, we discuss all the steps to set up your LLC, but we recommend you seek legal advice.

LLC stands for limited liability company. It is a legal business structure that protects your personal assets (your residence, vehicles, and finances) if your company faces litigation. 

Typically, LLCs operate one business or multiple businesses, but they can also hold assets. LLCs serve a variety of purposes, including holding property, automobiles, watercraft, and aircraft.

Usually, an LLC tax structure is an independent legal entity created for purposes of federal income tax. This means that the LLC does not pay tax on business income. The federal government taxes profits earned by LLC members as income. State and local governments can also impose additional taxes. 

If you're looking to set up your own LLC, it is best to seek legal advice from a trusted attorney or law firm.

Forming an LLC may seem to be a challenging task. However, it is much easier with our step-by-step guide:

Marketing may influence your business name. You must also make sure your business name complies with state law requirements.

You can't use a business name that's already in use by another business in your state. Also, your business name should end with the letters LLC.

Check the website of the state agency for business filings for LLC naming requirements and the availability of the name you want. Ordinarily, that's the secretary of state.

Business law requires LLCs to have a registered agent. LLCs have registered agents who handle official documents (such as subpoenas). Registered agents send these legal documents to the person in charge of the LLC.

You can name yourself as a registered agent or hire an employee (18 or older.) Agents need to be in your state during normal business hours. Or, you can hire a company to serve as your registered agent. Of course, it'll cost a fee; an annual fee for a registered agent may be more than a hundred dollars.

Establishing your LLC as a legal entity requires filing a document with your state's business registration agency.

Every state has its own requirements and procedures for forming an LLC.

Here's the basic information you need:

A business owner or organizer will need to sign the form after that.

You may need to publish your LLC registration notice in the newspaper in some states, such as Nebraska and New York. You must file the articles before publishing the notice. 

Visit the website of your state's business filing agency to review its LLC naming requirements and find out whether the name you want is available. This is, in most cases, the secretary of state.

Ensure your articles of organization are accurate before submitting them. There will also be a filing fee, which varies by state.

Your LLC will be formally registered once the state approves your formation documents. You can also use it to set up a business bank account and get a tax ID number. Knowing how long it takes to set up an LLC is important when planning your business.

Use a bank confirmation letter template to request confirmation of your financial transactions and account details from your bank. This letter template is a convenient and standardized format that can be customized to suit your specific needs. 

Operating agreements detail the financial, legal, and management rights of LLC members. The agreement can specify how to distribute profits, how members leave the LLC, and what capital members contribute. It contains all relevant information regarding your LLC's operations.

Operating agreements are not necessary for many states, but you still should draft one. To ensure everyone agrees on their rights and responsibilities, LLCs with more than one member or partner should create one. Even solo entrepreneurs can benefit from outlining the details in writing.

One option for single-member LLCs is to create your own operating agreement. A number of free templates are available online. Hiring an experienced attorney may be well worth the expense in more complex cases such as LLCs with multiple owners.

Creating your LLC is just the start. As soon as your business forms, you need to ensure your state recognizes it. Check your state's business filing website for details. Filing an annual report and paying an annual filing fee may be necessary for your LLC.

If you are setting up a business, you need to know how long it takes for LLC approval. Using GovDocFiling packages, you can file the documents online within minutes, even though each state has its own rules and requirements for setting up an LLC. The LLC time frame for approval varies state by state.

While filing the documents takes mere minutes online, the state takes a while to process your application for an LLC and then to authorize your business. The processing time usually takes three to four weeks. (The time it takes may vary due to COVID-19.) The time it takes to approve your LLC application can vary depending on a number of other factors, too. 

Forming an LLC can be a relatively quick process in some states. After receiving your articles of organization, they may approve your limited liability company immediately. In some cases, the turnaround time can be reduced to three business days and sometimes less than one week.

Delaware can process your LLC paperwork within 24 hours, sometimes less. Delaware, in particular, expedites business registrations with a complete package. There are other states, such as Arizona, that can take from four to six weeks to process your documents. Nevertheless, data processing still takes between three to four weeks, as mentioned earlier.

For an additional fee, entrepreneurs often request rush or expedited processing of their applications. It depends on the state's laws and how much the fee is.

While anticipating the processing period for your LLC application, exploring a Rent-to-Own Agreement as a potential solution for your residential or commercial property needs might be beneficial. This interim agreement can offer flexibility and a pathway toward eventual ownership while awaiting the completion of the LLC formation process.

The cost of forming and maintaining an LLC varies greatly across different states in the United States. On the lower end, states like Arkansas and Colorado stand out for their affordability. Colorado, for example, requires a $50 filing fee for an LLC formation and a relatively low $10 annual report fee, which means LLC owners can keep their businesses compliant with less than $100 for two years. On the other hand, Arkansas only charges $45 for the LLC filing fee and has an annual fee of $150, making it one of the inexpensive states for LLC formation and yearly maintenance.

In the mid-range, states such as Indiana and Idaho charge a little more for the same services. In Indiana, the LLC formation filing fee is $90, and the Biennial Report fee, due every two years, is a reasonable $30. Idaho's fees include an LLC filing fee of $100 and an annual report fee of $0, meaning after the initial year of formation, LLC owners owe nothing annually to the state. 

However, in states like Massachusetts and Illinois, the LLC filing and annual fees are significantly higher. The cost for filing an LLC in Massachusetts, for instance, is a steep $500, while the annual report fee is an additional $500. This means that just to start an LLC and keep it compliant for one year costs a total of $ 1,000 in Massachusetts. Illinois, similarly, does not provide much relief with an LLC formation fee of $150 and an annual report fee of a whopping $75, making it pricey for budding entrepreneurs and small businesses. Choosing to form an LLC in a state, therefore, greatly depends on these cost factors, among other considerations.

Knowing how long it takes to get a domestic LLC license is the first step, but you also must maintain it. To keep your LLC in compliance and in good standing, you have to pay an LLC fee as long as it's in business. In most states, this is paid every one or two years. Regardless of the LLC's earnings or activities, you must pay this fee. The state will dissolve your LLC if you fail to pay the fee. Approximately 90 percent of states follow this rule.

LLCs are primarily formed to protect personal assets. By forming an LLC, you establish a barrier between your business and your assets. The personal assets you own include your residence, vehicles, recreational vehicles, real estate, financial accounts, valuables, and other assets. So, if, for any reason, your business runs into financial trouble, you still have some possession of and liquidity in your personal property.