If you are wanting to form a limited liability entity, there are typically 5 things you must do.


  1. Choose a business structure and file the appropriate forms with the state government. Will you be an LLC or a corporation? Research the best fit for your business, and make sure you take the proper steps to legally establish your business as an entity separate from yourself. In most states you will be filing with the Secretary of State. If not, then there is another state agency that has been assigned to manage the paperwork.
  2. Write an Operating Agreement/Bylaws. Your operating agreement/bylaws are like the constitution of your new business. It governs how voting takes place, how money is handled, who can sign on behalf of the business, and just about anything else you can think of. This document is also important for showing a judge that you have a legitimate business, especially if your business only has one owner. This is a very important document. 
  3. Get your Federal Tax ID (EIN). You will need a Federal Employment Identification Number (EIN). You can file for your EIN with the IRS. Typically banks will ask for this number when you go to open your business bank account. 
  4. Register Your Business with Your State Tax Authority. Most states have the equivalent of the Federal EIN at the state level. Make sure you are also filing for your state tax ID.
  5. Get a business license. Most localities (cities and counties) across the United States require you to also register and pay a fee at the local level. It is usually a simple 1 or 2 page form and then you pay a fee based on the amount of revenue your business has. This is usually filed with your county clerk or at city hall, but not always. Some rural counties do not require a business license. Like most things, it usually must be renewed annually.


For Step-by-Step guidance on how to accomplish these tasks, check out our state specific guides.


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