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How Long Does It Take to Form an LLC?

How to Start an LLC

You have fine-tuned your business plan, and now it comes down to choosing the type of business filing you want to submit. This is perhaps the most important decision you can expect to make. Because of the many benefits, many entrepreneurs form a Limited Liability Company (LLC). You've got your business address, registered agent, and articles of organization ready to go. However, you're left with one important question...How long does it take to form an LLC?

Without legal advice and the help of a business lawyer, forming an LLC can take much longer than you would like. Enlisting the help of a filing company can result in a faster response time. As a savvy business owner, the timeless axiom of “time is money” applies to the LLC formation process. You might face one or more significant delays that include inaccurate and/or incomplete information on your LLC formation application if you don't enlist help from a professional service.

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What is an LLC?

An LLC represents an independently run legal entity that is created under the legal guidelines established by state law. It can consist of one or more company owners that can be individuals, LLCs, or corporations. However, banks and insurance companies cannot be a part of the ownership group that forms Limited Liability Companies.

There are two structures for forming an LLC: Member-managed and manager-managed. Every member that is part of an LLC participates in the daily operations of a member-managed LLC. On the other hand, you can choose to form a manager-managed company, which is a legal structure run by a manager who is appointed by the owners and given management rights.

Why is an LLC a Popular Type of Business Structure?

LLCs are popular for two primary reasons: tax and legal benefits. Deciding to form an LLC separates your personal assets from the business activity of the company. This means creditors cannot come after your personal assets to pay off the debts incurred by the LLC. Another reason why business owners opt to form an LLC is the different taxation options. You decide whether you want your LLC to be taxed as a partnership, sole proprietorship, C-Corporation, or S-Corporation.

How Long Does It Take to Get a State to Approve an LLC?

Each state has established different regulations for forming an LLC. Because of the different regulations, there is no uniform answer to the question, “How long does it take to form an LLC?” The average amount of time it takes to process and analyze the legal documents that are submitted with an LLC application is between three and four weeks. Some states take just 10 days to two weeks, while states like Arizona take up to six weeks to process LLC applications.

Several factors can influence the average processing time, such as the COVID-19 pandemic that closed a vast majority of state government agency offices. A common factor that slows down processing times is the mistakes made by the filers of an LLC formation application. Missing and inaccurate information can significantly impede the processing time.

Another factor that determines how fast a state processes an LLC formation application is the time of year when an application is filed. For example, filing an application around the tax filing deadline might slow down the progress of an application. Applications filed at the start and end of a year typically take longer to process because of the large volume of documents each state receives.

How Can I Rush Processing?

One effective strategy for expediting your LLC formation application involves working with a filing services firm that has experienced business lawyers helping entrepreneurs start LLCs. An attorney can help you get your LLC formed relatively quickly, and a lawyer can also help you decide in which state you should form an LLC. Schedule a free consultation with the Cloud Peak Law Group to learn more about forming an LLC and how long the process takes.