You’ve just formed your new LLC, next up is ensuring your business is in compliance with local business laws and regulations. Here are some items that should be on your checklist, even after forming your LLC.
If your company operates in an area or sector that requires a license, you need to ensure that license is in the name of the LLC. This typically means that you cannot apply for any licenses or permits until your LLC has been created.
The most common licenses and permits this may impact typically involve food and alcohol distribution businesses. However, many business types require local licenses. You may need to obtain anything from a general business operations license to zoning permits to health department permits for your business.
Get Your Seller’s Permit
If your business is in a state that requires a “seller’s permit” or a sales tax license before you can operate as a business, this needs to be completed after forming your LLC. You are required to have this type of permit before you start selling; in order to collect and remit sales tax.
An Employer Identification Number (EIN) is also known as a federal tax ID number. This number is used to file taxes and provide tax documents to employees. Even if you only plan on employing one person, you must obtain an EIN.
If you do not have employees, it is not required, but it is still a good idea to get an EIN. You can use an EIN to provide to clients and vendors for their tax purposes instead of giving out your individual social security number or tax identification number.
You may have already opened a bank account that you intend to use for your business. If you have, now is the time to change the name on the account to reflect the name of your LLC.
Keeping a separate bank account for your LLC is critical to ensure the asset protection benefits that this type of business entity offers.
The operating agreement for your LLC describes how your business will function on both a daily basis and long-term issues. It can cover everything from adding or removing a member to payroll schedules to who has the authority to sign company checks. While an operating agreement isn’t mandatory in every state, it’s in your business’ best interest to have one. Spelling out your business’ rules and expectations at the onset of your company will help you avoid headaches and possible conflicts down the line.
Even if you’re the sole owner, you can create a single member LLC operating agreement. In some cases, an operating agreement is required by financial institutions or potential investors, so it’s best to create one right away.
Most businesses will be required to carry general liability insurance, but even if your industry does not you might want to consider getting some anyway. Accidents are always a risk, which means having adequate insurance can protect your and your business should something happen.
Additionally, if you have employees, you will likely be required to get both workers’ compensation insurance and unemployment insurance. Be sure to check your state’s rules and regulations regarding required insurance coverage.
A registered agent is some who accepts legal documents and information on behalf of your LLC, and is an item that is often required, so be sure to check with the state your business is located in. Typically, the owner can function as the registered agent, however in some states there are some requirements a registered agent must meet.