When creating a business, there are different structures you can assume, one being an LLC. A Limited Liability Company is a structure that combines partnerships or sole proprietorships with corporations. Like a corporation, you are protected from the business's liabilities, but like a partnership, expenses and income will pass through you and other owners.

Whether you want to upgrade your current online business to an LLC or form an LLC from scratch, there are things you must consider for success.

The first and most important consideration is where to form LLC operations. The best option is to create them in the state where you live. If you want physical locations in other states, you must file as a foreign LLC in said states.

The next consideration is your LLC name. While it's essential to be creative with the name, you must ensure it is distinguishable and that no other businesses have the same name. To be sure, conduct an online business name search and start creating new names.

If you already have a business, you can use the same name or use business name generators to create unique names. Once you determine the best name, consider registering a web domain and establishing a business phone system for credibility and enhancing customer service.

Another consideration is having a registered agent. This person will accept service of process or legal summons and critical legal documents on behalf of your LLC. Your registered agent must be over 18 and a resident of the state in which you have your LLC.

While you can list yourself as the registered agent, this might be an inconvenience as the law requires the agent to be in the registered office Monday through Friday from 9 am to 5 pm.

To form an LLC and officially register it in your state, you must have Articles of Organization, also referred to as Certificate of Organization or Certificate of Formation. While the requirements for the articles might vary in different states, you must include the business name, address, purpose, other members' names, a registered agent, effective starting date of the business, and duration of formation.

While many states don't require an operating agreement to form an LLC, it is essential to have it. The agreement solidifies members' agreements; protects the LLC's limited liability status; and indicates how dividends and profits will be divided, how existing members will terminate or transfer membership, and the new member admission process.

To ensure you can open a bank account for the LLC, consider getting an Employer Identification Number from the IRS. This acts like a Social Security Number for the business and allows the IRS to track your tax reporting.

While it's not mandatory, it's essential to consider getting insurance for the business depending on your operations. It helps protect your business from damages and lawsuits. You must also research if your LLC needs permits and licenses. If yes, search for them and get them to ensure you are on the right side of the law.

While you can form an LLC yourself, hiring an LLC formation service makes the process faster and easier. Some benefits you will get from forming an LLC include tax benefits, personal liability protection, flexible management and ownership, increased credibility for your business, and less paperwork.