I filed the articles of organization online last week and got the approval email. I thought that was it. Someone at a networking thing asked about my EIN and operating agreement and I just stared at them. What else am I missing? I run a small freelance design thing from my apartment if that matters.
LLC Setup
I thought starting an llc was just one form, what else do i need to do?
EIN is free on the IRS site. Takes like 10 minutes. Do that first before you do anything else, you'll need it for a bank account.
Operating agreement is one of those things that nobody actually checks until it matters. My lawyer buddy drafted a two page one for me for cheap. Honestly if you're a single member LLC a lot of people just use a template. Not legal advice obviously. But like, yes you should have one.
Did you check whether your city requires a separate business license? I filed my state paperwork and felt very accomplished and then got a friendly letter from the city about a $75 annual license I'd never heard of.
Oh no. I did not check that. Let me look into the city thing this week. Thanks for the heads up.
Separate bank account. This is the one everyone skips and then wonders why their LLC feels like a piece of paper. Open a business checking account with the EIN and stop running your design invoices through your personal account
^^ this is the real answer honestly. The commingling thing is what gets people in trouble way more than a missing template doc sittin in a folder.
Also depends on your state. Some states want an annual report, some want a franchise tax, some want nothing. And And if you're doing freelance design as a single member LLC, look at whether you should be taxed as an S corp or not. Probably not yet at your size but talk to an accountant before you decide. I ignored this for three years and my accountant sighed very loudly at me.
The accountant sigh is a universal experience.
I am once again asking people to actually read their state's renewal deadlines. Mine is due the same month every year and I have a calendar reminder set 30 days out. The late fees are not cute.
Not a CPA but I do bookkeeping for small shops. The list that actually matters: EIN, business bank account, operating agreement, check your state/city license and renewal, and a simple way to track income and expenses from day one. That last one saves you a miserable weekend in April. Also register the name if you're using something other than your legal name, but that's a dba thing maybe.
Okay so I have a little list now. EIN, bank account, city license, operating agreement, and figure out the annual renewal thing. The S corp stuff I'll probably ignore for now because my brain is full. Appreciate everyone, even the the people making me feel slightly behind.
You're not behind. Half the people at that networking event probably don't have an operating agreement either, they just asked you about it to feel smart.
Genuinely though, the number of people who form an LLC and then run everything through their personal checking account and never look at their state's renewal page is like... most of them. You're already ahead by asking.