Starting Your LLC

This post will share some of the concrete steps needed to set up an LLC. This is an outline I shared with several people who were either retiring from military service or were considering leaving a company and putting out their own shingle. I typically shared the information over a breakfast or lunch. For years, I’ve been meaning to add a few words so I could share it in this forum. First, two caveats: some of the info is dated and this is not intended to be a complete list of all the steps necessary. But I think it’s a good start that it might remind you of something you need to consider before doing business as an LLC. A good friend of mine recommended that everyone should set up an LLC. If someone wants to pay you money to do something, you want to make it easy for them to give you money. Or if your employment suddenly ends, you’ll have the infrastructure in place to start working for yourself.

I welcome any feedback. The benefit of sharing in a post like this is I can make changes based on your feedback. If you find any of this useful, I’d love to hear from you. This is the outline I used in person as a prompt to fill in the details. If any of it requires more explanation to be useful, please let me know and I’ll add more details.

Creation

Make sure name is available, buy it

• https://www.hover.com
  • $14.99 per year
  • easiest registrar you’ll find

Form an LLC -- varies by state

• https://www.scc.virginia.gov/
• https://biz.sosmt.gov/search/business
• make sure company name is available
• Secretary of State website will describe process
• if forming LLC in Montana, consider using services of https://www.49dollarmontanaregisteredagent.com

Get tax ID

• http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-(EIN)-Online

Get business license

• varies by locality
• Fairfax County requires Business / Professional / Occupational License
  • http://www.fairfaxcounty.gov/dta/business_bpol.htm

Set up business email (using domain name you bought earlier)

• Consider Google apps
• https://www.google.com/work/apps/business/
• plenty of other options for mail host, including Hover

Register with SAM

• GSA’s “System for Award Management”
• https://www.sam.gov
• you get CAGE (Commercial and Government Entity) code as part of process

Get D & B number

• https://iupdate.dnb.com/iUpdate/viewiUpdateHome.htm
• no longer required for government contracting
• replaced by Unique Entity ID (generated by SAM.gov)

Register as SDVOSB if applicable

• https://veterans.certify.sba.gov
• follow links for verification process

Create Articles of Organization

Operation

Get insurance

• USAA doesn’t provide biz insurance, but has relationship with The Hartford.
• https://www.thehartford.com/business-insurance

Set up website / landing page

• https://www.squarespace.com
• easiest way to create and host a website

Timekeeping

• have a simple way to keep track of time spent by client and project
• Toggl = great for 1 person show
• https://toggl.com

Accounting

• have to consider whether it will remain just you or if you are creating foundation that will grow into small business and beyond
• Quick Books / Quick Books Online
• https://quickbooks.intuit.com

Billing

• make sure you and client understand what Net 30 (or whatever) means

Finances

Have an easy way for people to pay you

• set up Square account and get reader
• https://squareup.com/

set up Banking

• USAA is not an option for business accounts
• consider fees and cost to deposit amounts you expect per month
• NFCU works great for me.
  • cost = $1 per month for electronic deposit
  • minor limits
    • $5000 transfer out per day
    • 2 day wait for large deposits entered via phone camera

Get Credit card

• set up a business credit card

Set up SEP IRA

• Fidelity and Vanguard vary in ability to make / change employer contributions online
• Great way to reduce taxable income
  • Contributions an employer can make to an employee's SEP-IRA cannot exceed the lesser of: 25% of the employee's compensation, or. $66,000 for 2023

Set up PayPal in business name

• I no longer recommend PayPal because of their limitations on free speech. Consider Venmo instead.

Taxation

Set up Estimated payments in Electronic Federal Tax Payment System

• https://www.eftps.gov/eftps/
• you’ll need to make estimated tax payment quarterly

Decide whether you’ll be taxed as corp or self employed

Estimate taxes and pay quarterly

• Taxes may be higher than estimated first year.

State / local taxes

• Virginia expects quarterly payments, YMMV
• Fairfax County takes a slice too, YMMV