LLC License: Everything You Need to Know

Since the filing is necessary to keep your LLC in good standing and free of fines, it is best to come up with a plan to ensure that the dates are not missed. If members or owners of the LLC decide that the business should no longer remain active and operate, then a dissolution process must take place. Once the paperwork is filed and the state approves the LLC, the business is able to complete business transactions in the state.

• A business license is not the same as forming an LLC (limited liability company) or other legal business entity.
• Depending on the state, you may choose to act as your own registered agent to save money, but again that makes your personal information publically available.
• In most states you can act as your own registered agent, name an employee or other individual as an agent, or hire a registered agent service.
• Additionally, the secretary of state’s office provides all the information you need to obtain business licenses or file an LLC.
• However, your business may need a state-level occupational license or municipal-level license or permit to operate.
• So, your business license is like a contract with the government that allows you to run your business in compliance with local, state, or federal guidelines.

This is the identification number your LLC will use on all its bank accounts, as well as income and employment tax filings. In addition, in each state in which the LLC will be doing business, you must apply to the state’s tax department for a sales tax identification number and register with the state’s labor department. Standard forms for the https://kelleysbookkeeping.com/llc-accounting-everything-you-need-to-know/ articles of organization for an LLC are generally available from each state. In some states, the registered agent’s consent to act as registered agent is also required. They serve separate purposes and a business license cannot be substituted for an LLC. Both are required if you wish to legally operate an LLC in a given city, county or state.

Limited Liability Company (LLC)

So it is better to register the LLC before obtaining the relevant licenses. Business filing services only require basic information about your business. Then, the agent researches the relevant requirements and files paperwork on your behalf. It’s a worthwhile investment Bookkeeping, tax, & CFO services for startups & small businesses to ensure that your business is above board right off the bat. Again, you may require one or more of these licenses to operate an LLC. For example, you may want to run your janitorial or cleaning business under an LLC for tax benefits and liability protection.

While an LLC operates on state statutes, getting a business license is much more specific. Licensees are authorized to operate in a geographical area — most commonly the county or city in which you are based. Depending on the nature of your business or your area, the process may involve additional requirements that you’ll have to meet before you can really get rolling. License requirements become more prominent for businesses that specialize in a potentially harmful, dangerous, or litigious field. For instance, if you’re planning to serve alcohol, sell weapons, or transport live animals across state lines, you’ll need specific licenses to accomplish these tasks legally. Again, a business license is a document that allows you to operate a business legally.

LLC Formation Costs

There are no minimum or maximum limits on the number of owners–also called members–that an LLC can have. Many LLCs have only one member, but an LLC can have five, ten, or hundreds of members. See LLC Cost in Massachusetts to learn about all the possible LLC fees. Because of the large number of industries and all of the municipalities in Massachusetts, it’s not possible for us to explain them all. However, you can use the search tools below, call your local municipality, or hire a company for help.

However, the LLC laws of some states prohibit minors under age 18 from serving as organizers to form LLCs. This means that only designated members, or certain nonmembers/outsiders, or a combination of members and nonmembers, are given the responsibility to run the business. The other members in a manager-managed LLC are passive investors who are not involved in business operations. This form of management may be desirable for large LLCs with many members, or where some members only want to be passive investors in the business. To form an LLC confidently, and without a lawyer, use Nolo’s Online LLC Formation.

What Are the Disadvantages of an LLC?

Once this form is filed with your state, along with any other required documents and filing fees, your LLC is an active business. You can use those articles of organization as a de facto LLC license. Plan on handing over a copy of this document if you want to open a business bank account. But because LLCs are distinct legal entities, they don’t come into existence until you file formation paperwork (usually called Articles of Organization) with the state. So if you want to apply for a business license for your LLC, you almost always need to form the LLC first.

You’ll need to obtain your license from the appropriate federal agency. For example, you can get your transportation license from the U.S. Similarly, the Federal Communications Commission issues licenses for the broadcasting industry. However, you will most likely need a business license for your LLC to do business. Not all LLC members need to be licensed, but if you are running a professional LLC, some states require that all owners (members) are licensed.

What is a foreign limited liability company?

Limited liability companies (LLCs) are important legal structures for forming a business. Limited liability means that the assets and debts of the business remain separate from the personal assets and debts of the company’s owners. If a company goes bankrupt, creditors cannot therefore go after the owners’ personal assets, just that of the business. LLCs also have several beneficial features including simplified taxation and a relatively straightforward process to establish one.

However, in some states some types of professionals must form special professional LLCs. An LLC can be used for a business of any size—from one-owner operations to businesses with many co-owners. LLCs are also the most common legal entity used to own rental and commercial property.