I have been self-employed for some time, and a few years ago I began to consider the possibility of turning my home business into an LLC. I had one reason, and only one, in mind: my protection. An LLC limits the personal liability of business owners, and for that reason I would urge anyone running a small business to consider it.
The most important tip I can give you about setting up an LLC is to avoid procrastination. If you’re fairly young, like me, that advice may invoke memories of your counseling sessions with your undergraduate advisor, but that doesn’t mean it isn’t good. There are no deadlines in the world of self-employment, but procrastination will only make you want to rush the process, and that’s the last thing you should do.
You’ll want to take time to research the process and become familiar with the paperwork. To do this, you’ll probably turn to a search engine, but keep in mind that this can have its pitfalls.
If you search the Internet for information on setting up an LLC, you’ll find plenty of authoritative sources urging you to consider which state’s laws you’ll be operating under. Nevada, they’ll tell you, has the lowest filing fees, while Delaware has the most pro-business statutes in America. I spent a lot of time researching this question, only to find out that it didn’t really apply to me. Because I, like most people in my situation, ran only a very small business, I stood to gain nothing by operating out-of-state. There are fees and paperwork associated with operating as a foreign entity in a state, and these are only practical for large businesses.
One easy way to avoid wasting time researching the wrong issues is to hire a lawyer, but I wouldn’t recommend that, either. A lawyer will certainly make sure all your paperwork is in order, but it won’t be cheap and it probably isn’t necessary. I suggest having a lawyer look over everything after you’ve prepared it yourself; this will be much less expensive and just as helpful.
On the same note, it isn’t advisable to pay for an online service to help you in the process of setting your LLC. A disturbing number of these are scams, and even if you’re careful and pick a reliable service, you’ll end up paying more money than you would have otherwise.
Last but certainly not least, be confident! If you use your common sense, you’ll be fine. The process of starting an LLC isn’t designed to trip anyone up.
How to Form an LLC
Mashable on Setting Up Your LLC