How Long Does It Take to Get an LLC?

Are you considering starting a new business? If yes, then you’d probably want to know just how long it’ll take to set up an LLC. This is an exciting phase, but due to the usually long processing times to form a limited liability company, aspiring entrepreneurs may be discouraged.

The exact time to process LLC formation documents is based on a wide range of factors, including location; however, there are a number of ways you can expedite the process to get your business operating in little to no time. Overall, the average time to get a limited liability company is between 14 to 21 days, but you’ll need to have a good idea of the formation process for a more accurate estimate.

What is an LLC?

LLC stands for “Limited Liability Company,” which implies a legal business structure that protects your personal assets against litigation (in other words, it turns your company into a legal entity). In general, limited liability companies can hold assets and operate one or more businesses. They have licenses and permits and they are able to serve a number of functions such as holding automobiles, property, and lots more.

Owners of limited liability companies are generally known as members, and the managers of the companies is a chosen member(s). Just like the shareholders in a corporation, the liability of company members is limited to their shares or investment in the company.

Furthermore, the limited liability company’s tax structure is established as a result of federal income tax, making it an independent legal entity. In other words, the business income of an LLC is not subjected to tax, instead, the profits earned by the members of the limited liability company as income are taxed by the federal government. Additional taxes can also be imposed by the state and local authorities.

The way in which a limited liability company in a certain state is formed, registered, and dissolved is determined by the provisions in the state’s statutes. They also determine if the limited liability company needs to include the articles of organization and an operating agreement or leave it for some particular default provisions specified by the statute to take charge.

For optimal preservation of your personal assets, consider forming a Limited Liability Company (LLC), which serves as a formidable barrier against legal liabilities targeting your assets.

Complementing this, the establishment of an irrevocable trust contributes an extra degree of safeguarding for your individual financial assets, fortifying your overall asset protection strategy.

Steps Involved in Creating an LLC

Choose a Name for Your Business

Naming your business can be a very exciting stage in creating your LLC. You’d want to pick the perfect name that represents your brand, is easily identifiable, and communicates your value. While at this, do not get carried away as your business name must also comply with the state law requirements.

You can only pick a name that’s available (not already picked by another business in your state), and your preferred business name should end with the letters – LLC. For your state naming requirements, you can go through the state agency’s website for business filings.

Hire a Registered Agent

To comply with the business law as an LLC, you must have a registered agent. These agents are responsible for handling official documents and sending these to the individual in charge of the limited liability company.

The options available are either to name yourself as a registered agent or to hire one who must be 18 years or older. The agent must be present within the state during your normal business hours. Additionally, you have the option of employing a company as your registered agent for a fee.

Obtain your LLC’s Articles of Organization

In order to legalize the incorporation of your new business, a type of legal document known as “Articles of Organization” must be filed with your state’s business registration agency.

This is required to establish your company as a legal entity, and it contains some basic information about your business, such as the name of the founder(s), the name of the business, and the location of the business.

Complete the Articles of Organization form

Depending on the state, the requirements and procedures for establishing an LLC can vary. However, the basic details required will include the following:

• Name and address of the business;
• The purpose of the business;
• The contact information of the registered agent;
• The duration of the company.

Finally, you’ll need to sign the form and may also need to have your company registration notice published in a newspaper (varies depending on the state).

File the Articles of Organization

Before you proceed, crosscheck your Articles of Organization to ensure they’re complete before submission. Filing these legal documents will attract a fee that varies depending on the state.

Upon approval of the documents, your company will be formally registered and become a legal entity. This gives you the ability to open a business bank account and also to acquire a tax ID number. Knowing how long it takes for LLC to be approved is crucial, especially when preparing your business plan.

Set up an LLC Operating Agreement

Although operating agreements are not required in several states, they’re still very much important to be drafted. Companies with multiple members should prepare one so as to ensure each member knows and agrees on his/her rights and responsibilities.

They should contain the full detail of the LLC members’ legal, financial, and management rights. In short, they should detail all necessary information about the operations of the limited liability company.

Maintain your LLC

Having your very own LLC goes way beyond creating one. Upon creation, there’s also the need to make sure that it’s recognized by the state. For instance, annual report filing, as well as payment of the annual filing fee, may be required.

How Long Does It Take for An LLC to be Approved?

Here, we’re going to consider the total turnaround time of an LLC approval from start to finish – the time your state takes to review your LLC filing and recognize it in their system. You should be aware that the exact time varies depending on the state, and the start of the processing time is when the documents have been received. The total turnaround time includes the processing time plus the transit time.

LLC Approval Time – Mail Filings

The total turnaround time here includes the transit time to the state plus the processing time and transit time back to you. In a more detailed explanation, this includes the transit time it takes for your document to get to the state, the time taken by the state to review the filing, and the transit time for your approval to get to you.

In general, transit time via mail normally takes about a week for both ways. However, the processing time varies depending on the state. In other words, if the processing time in your state is one week, then the total approval time would be three weeks for your state.

LLC Approval Time – Online Filings

In most cases, online filings are a lot faster than mail filings. This is primarily due to the fact that there’s no transit time with online filings – submission is made online, and the approval is also returned online by the state. Once your filings have been approved, you can easily download your documents in no time.

LLCs filed online are usually approved within a week in several states. However, it must also be stated that while some states are able to provide quick approvals, other states may take several weeks to do so. For instance, your LLC paperwork can be processed within 24 hours in Delaware, however other states, such as Arizona, can take up to 4 to 6 weeks to approve your documents.

States with the Quickest LLC Approval Times

Now let’s see which states can be named the fastest when it comes to forming an LLC.

Delaware

Just like several other states, Delaware also offers the standard processing time for company filing of up to two weeks. However, what makes the state really stand out is the fact that it offers the expedited filing option for an extra fee.

• One-hour service costs $1,000;
• Two-hour service costs $500;
• Same-day service costs between $100 - $200 for filings;
• Next-day service ranges between $50 to $100 for filings.

Nevada

The state’s SilverFlume online platform ensures that filings made are processed between 1 to 2 business days with no extra charge. Although, if you choose to use the mail option for your formation documents submission, the processing time can be up to two weeks.

Massachusetts

Filing via the state’s Secretary of the Commonwealth online portal also offers a very quick total turnaround time with an after-payment processing time of just four hours. Furthermore, mail filings are usually processed by the state in just 4 to 5 days.

New Jersey

In New Jersey, the typical processing time for filing formation documents by the state is one to three business days. And just like the state of Delaware, New Jersey also offers expedited filing of formation documents for an extra fee if you want a same-day processing service.

How Long Does It Take to Set Up an LLC: Faster Ways

Do you want to speed up the time it’ll take to form your company? There are a number of ways to go about this, whether or not you’re in a state that offers expedited filing. The major trick to this is ensuring that every necessary information is provided and all requirements are met from the go. In other words, you have to be prepared, organized, and thorough when filing your formation documents.

Here are a couple of ways you can incorporate for a faster LLC formation:

• The completeness and correct filing of your formation documents can go a long way to cut down the duration of your company formation. Therefore, it’s important to make sure that you meet all the requirements before you proceed to file your formation documents, as this puts you in a better position for a smooth and easy filing process;
• Employ an LLC filing service. With an expert and professional LLC filing service by your side, you can rest assured of a quick and easy filing process. These services ensure that your formation documents are accurate, complete, and meet all the set requirements by the state, which can greatly reduce the filing time;
• Go for online filing. When compared to mail or in-person filing options, online filing can significantly cut down your processing time. If your state offers an online filing option, then this should undoubtedly be your preferred choice.

Can I Expedite my LLC Formation Process?

It depends. Expedition of the limited liability company formation process is allowed in most states, while there are also some states, which do not offer this option. In the event whereby you happen to reside in a state,  which provides this option, you’ll have to pay an additional fee to make for faster approval of your LLC formation documents. These expedited fees usually fall within the range of $25 to $100.

On the other hand, there are up to 20 states that do not offer expedited limited liability company filings. If you happen to reside in any of these states, then there’s no way in which you can expedite your company filings. However, you can incorporate some of the ways listed in the above section to cut down on your company processing time.

If a request to expedite LLC filing is made, the application will be attended to before other normal applications. Immediately after the review has been completed by the office of the Secretary of State, the results would be sent to you. It is, however, important to note that your formation documents will not be approved if it isn’t complete or if your business name doesn’t comply with the state’s requirements.

In general, the quickest way to get your limited liability company formation documents approved is simply to go for the online filing option while also choosing the expedited option available in your state. With that in mind, if you’re in a state which provides a very quick approval time, you don’t have to pay an additional fee for an expedited filing.

How Much Does It Cost to Set Up an LLC?

The cost to set up an LLC varies from state to state, however, they’re usually within the range of $40 to $500. Check the table below for more information.

How Long is an LLC Good For?

The first step is to determine how long it takes to create an LLC, but even more important is maintaining it. As a result, the answer to this question is forever. However, that is largely dependent on how you file your paperwork. A requirement in several states is stating the duration of your LLC as a part of your Articles of Organization. In other words, how long your LLC lasts depends on you.

If your LLC is going to be in existence for a specified amount of time or till the occurrence of a particular event, then your LLC’s duration is “indefinite.” However, if your limited liability company is expected to be in existence for several years, then the duration of your LLC is “perpetual.”

Regardless of the option you go for, it’s crucial to always comply with the annual filing requirements of your state. In some states, LLCs are required to file an annual report every year while other states demand biennial reports or other frequencies. Failure to comply with these requirements when due can lead to your LLC being dissolved by the state.

Benefits of Forming An LLC

• Protection of personal assets. As a legal entity, the owners of a limited liability company will not be liable for any debts incurred by the business or any litigation against the LLC. In other words, creditors won’t be able to seize your personal assets;
• Simplicity. Operating an LLC is quite easy, simple, and totally different from managing a corporation. Here, there’s no need for directors, officers, board meetings, and the like, which are all required in a corporation;
• Pass-through taxation. This simply means that the profit or losses made by the business will pass through it and straight into the personal tax returns of the owners. This enables an income tax deduction of 20% of the net business income, which was generated by the LLC;
• Flexibility. When compared to other business entity types, the flexibility that comes with running an LLC with regard to ownership, management, and taxation is massive.

Drawbacks of Forming An LLC

• High cost. In comparison to sole proprietorships or partnerships, the cost of forming and maintaining an LLC is quite high. Apart from the filing fee, you’ll be required to pay to set up your company legally, you’re also required to pay annual fees and taxes, which can be up to $800 depending on the state after formation;
• Limitations in investment. If you’re looking for external investors, then forming an LLC may not be your best bet. External investors mostly look to provide funds to corporations.

Conclusion

Forming a limited liability company comes with various benefits but also some drawbacks, with many entrepreneurs worried about the duration it’ll take to get their LLC formation documents approved. The answer to the question “how long does it take to get an LLC?” can’t be precise as many variables are in the picture. However, if you’re looking to set up an LLC, then the best time to start is now.