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A Limited Liability Company (LLC) is a flexible company type and popular amongst small business owners. Setting up an LLC isn’t too difficult and it’s something anyone can do on their own without hiring a lawyer or purchasing a service online. Unfortunately, the steps required to set up an LLC vary state-by-state, as LLCs are registered and recognized on the state level. The only thing you need to do before setting up an LLC is to acquire an Employer Identification Number from the IRS – which can be done online in a matter of minutes at:

http://www.irs.gov/businesses/small/article/0,,id=102767,00.html

The purpose of an Employee Identification Number is for the Federal Government to be able to easily identify your business, as you’ll be submitting your EIN on your form 1065 (U.S. Return of Partnership Income) when you file taxes at the end of the year. In the eyes of the IRS an LLC is taxed the same way as a Partnership, as both are “pass through” entities. Form 1065 simply shows how much profit your business earned, which is then “passed” onto owners, which must report their share of that income on their individual form 1040.

After getting your EIN from the IRS website you can proceed with setting up your LLC with whichever state you reside in. Some states make forming an LLC incredibly easy. New Jersey for example has an online portal where you can quickly and easily create an LLC at:

https://www.state.nj.us/cgi-bin/treasury/revenue/dcr/filing/page1.cgi

Other states require you to download PDF forms, print them, fill them out, sign them and mail them in. This is usually a bigger “hassle” because it can take longer to get everything set up. Nearly every State charges a “fee” for registering an LLC. Alaska for example charges a $250 fee to form an LLC while Wyoming only charges a $100. You’ll need to go to your state’s official “Secretary of State” website and look up the exact procedures yourself, as the required steps are unique for each state. You can use the table below to help find some of these forms: