In this article, we layout everything you need create your very own Multi Member LLC.
Key Takeaways
- A Multi Member LLC is a flexible business structure that allows for multiple owners and pass-through taxation.
- To form a Multi Member LLC, you'll need to file Articles of Organization with your state and create an Operating Agreement.
- It's important to choose a unique name for your Multi Member LLC and register it with your state.
- You may also need to obtain certain licenses or permits depending on the nature of your business and where it operates.
- By forming a Multi Member LLC, entrepreneurs can limit their personal liability and enjoy greater protection for their personal assets.
Registering your own LLC is straightforward.
Here’s what most states require to form a MMLLC:
- Articles of Organization
- Registered Agent
- Operation Agreement
- EIN (Employer Identification Number)
- Business Bank Account
- Industry-Specific Licenses
- Employee Regulations
- Maintenance
Table of Contents
Exact requirements vary from state to state.
You can find your state’s LLC requirements on your Secretary of State’s (SoS) website.
They tell you how to acquire and where to submit the necessary documentation.
Just make sure you’re looking at the requirements of the state where you plan on conducting business.
Articles of Organization
You need to write out an Articles of Organization for your LLC and submit it to the Secretary of State where your LLC is operating.
To figure out who this is and their office address, simply go to your state’s official government website.
One part of your Articles of Organization involves coming up with a unique business name.
A unique business name may extend to your county or to your state.
It all depends on your state’s laws and regulations surrounding business names and trademarks.
To find out if the name you want is already taken, you can conduct a free business name search using your SoS’s website.
There are also plenty of third-party companies you can use to conduct a business name search.
We recommend using your Secretary of State’s website first and then double checking using other resources just to make sure you’ve got your bases covered.
In most states, you can submit your Articles of Organization online.
If you’re unable to do it online you can submit copies of your documents by mail.
Just make sure you send the copy and not the original.
Registered Agent
As you describe the different positions within your company in your Articles of Organization be sure to include your Registered Agent.
They are a vital component of your LLC.
Your business’s Registered Agent acts as the contact point between your LLC and the government.
They send and receive important documents to/from the state.
This being the case, your Registered Agent must have a mailing address in the state where your LLC is registered and operating.
Your Registered Agent is either a fellow member of your LLC or they are hired from a third party.
If you want to hire one, there are plenty of Registered Agent Service providers online to connect you to professional Registered Agents.
Operation Agreement
In addition to submitting your Articles of Organization, you also need an Operation Agreement (OA).
Your Operation Agreement is a detailed plan of action under normal circumstances as well as special situations.
Some states don’t require OAs while others make them a necessity.
Although it’s important to know your state’s specific registration requirements, you should still write one up anyways.
Not only is an Operation Agreement a guide for managing and operating your LLC.
Your OA also acts as a safeguard against potential lawsuits stemming from within the LLC.
Since it’s dealing with the management hierarchy and ownership, every member has to agree to the terms of this document.
The Operation Agreement includes (but is not limited to):
- Your Multi Member LLC’s name,
- Your LLC’s ‘headquarters’ address and any other operating locations,
- Your LLC’s management structure (either member-managed or manager-managed),
- The different positions within your business and the responsibilities of each position,
- How a member’s share of ownership is determined,
- Every member’s portion of voting rights in the decision-making process,
- How new members are accepted into your LLC and ownership gets reapportioned,
- Your LLC’s tax status,
- How and when taxes are paid,
- How and when members are paid,
- What happens if a member leaves,
- How to resolve disagreements between members,
- How assets are divided if your LLC dissolves,
- A statement acknowledging that your OA meets your states requirements and laws,
- A statement acknowledging that your LLC is officially registered once all the required documents have been submitted to the state (plus dates when they were accepted),
- The dates of establishment of your LLC,
- How the OA can be amended or updated in the future,
- An acknowledgment that all members have signed and agree to be bound by this contractual Operation Agreement as it is currently written,
- Plus anything else your Secretary of State requires…
Compiling an Operation Agreement is highly encouraged because it allows all the members to understand how the LLC runs.
There is no downside to having all the ins and outs of your business and the protocol of different potential events officially laid out and on file for all members to reference.
While writing your Operation Agreement you should be careful using any online templates you may come across.
Make sure the templates you use meet all the current requirements of YOUR state.
EIN
Think of an EIN as an ID number for your business.
EIN stands for Employer Identification Number.
The name implies your business has employees, however, you need one regardless of whether or not your LLC has employees.
Your EIN allows you to complete the registration process, pay taxes, and get special certifications and licenses for your business.
Obtaining an EIN is very easy and inexpensive.
You can do it online, by mail, phone, or even fax (though we’re not quite sure why that’s still an option these days).
You can submit an EIN application for free on the IRS website.
➤ APPLY: Register for your EIN here for FREE!
Once you’ve been approved by the state, you get your EIN.
In a few states, you need some additional information to fill out the EIN form.
HERE are links to every state’s government website.
Just a fair warning though, these are government websites after all.
Some of them are not so user friendly.
Business Bank Account
As you know, an LLC’s protections are only valid if the business’s finances are kept separate from the personal finances of all of the Owners.
This means you have to open up a special Business Bank Account for your LLC.
You can only do this after receiving your EIN.
Just like you need a Social Security number or other ID to open a personal bank account, your business needs an EIN to open up a bank account.
➤ GROW: Learn how to fund your business bank account and get your LLC started!
Industry-Specific Licenses
You’ve got to be verified to begin selling the quality products and services you specialize in.
You need the right permits, licenses, certifications, etc. to conduct business in your field.
What you need depends on what you’re selling, what your local and state laws are, as well as any government regulation in your industry.
For this reason, double-check with your secretary of state, city, and county commerce offices and get the necessary paperwork in order.
Here are two huge reasons to be legally recognized in your industry.
1. Your business probably won’t be so successful if your potential customers are skeptical and lack trust.
2. You will be fined, imprisoned, and/or lose your business by breaking the law.
It’s simple.
Take classes. Get trained. Gain experience. Follow (and surpass) your industry guidelines.
Employee Regulations
If your MMLLC has hired employees, you have to follow employer regulations.
A few states (and even some cities) have unique rules and documents you must regularly submit to have employees working for your LLC.
Even if your state doesn’t have employee regulations, there are still federal guidelines to follow and paperwork to submit.
The process of preparing your business to accept employees is not complicated but it is a process nonetheless.
A process you must go through to be recognized as an employer by the government.
Maintenance
Once you’ve got everything set up and running, you maintain the company.
Maintenance involves staying up-to-date with paperwork and organizing your company records.
Not only does this help the state keep an eye on you, but it also allows you to keep an eye on your business.
By keeping clear records and tracking your business’s movements you can better understand what is working and what isn’t.
As the saying goes: “If it’s measurable, it’s manageable”
FAQs - Frequently Asked Questions About Registering Your Multi Member LLC
How much does it cost to form an LLC in a county?
The basic state filing fee varies by state, typically ranging from $50 to $500.
Additional county-specific fees may apply.
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The total cost of forming an LLC includes several components beyond just the state filing fee.
You'll need to consider the following expenses:
- State filing fees (varies by state)
- Registered agent service fees ($100-300 annually)
- Operating agreement preparation ($0-500)
- County/city business licenses (varies by location)
- Publication requirements in some states ($200-1200)
Additional costs might include professional services like attorneys or accountants.
Some states require annual report fees and franchise taxes.
Using a formation service can add $0-300 but often saves time and prevents costly mistakes.
Do I need a physical address in the county to form an LLC there?
No, you don't need to be physically located in the county to form an LLC there.
However, you do need a registered agent with a physical address in the state.
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While you don't need to be physically present in the county, there are several address-related requirements:
- A registered agent with a physical street address (not P.O. box) in the state
- A principal business address (can be out of state)
- A mailing address for correspondence
Many businesses use registered agent services to fulfill the physical address requirement.
Some counties may require a local business license if you conduct business physically in their jurisdiction.
Virtual office services can provide a local business address if needed for credibility or mail handling.
How long does it take to get an LLC approved in most counties?
Processing times vary by state, typically taking 1-3 weeks for standard filing.
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The timeline for LLC approval depends on several factors:
- Standard processing: 1-3 weeks
- Expedited processing: 1-3 business days (additional fee)
- Same-day processing: Available in some states (premium fee)
Online filings generally process faster than mail-in applications.
Some factors that can delay approval:
- Incomplete or incorrect information
- Name availability issues
- Payment problems
- High volume periods (typically January and end of fiscal quarters)
Additional time may be needed for:
- Obtaining an EIN (1-2 weeks by mail, immediate online)
- Setting up business bank accounts (1-3 business days)
- Acquiring necessary licenses and permits (varies by location)
What's the difference between state and county requirements for an LLC?
State requirements focus on formation and compliance, while county requirements typically involve local licenses and permits.
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State-level requirements include:
- Articles of Organization filing
- Registered agent designation
- Annual reports and state tax compliance
- Operating agreement (recommended in most states)
County-level requirements typically include:
- Business licenses
- Zoning permits
- Health department permits (if applicable)
- Professional licenses
- Local tax registration
Understanding both sets of requirements is crucial for full compliance.
Some industries may have additional requirements at both levels.
Working with a formation service can help navigate both state and local requirements effectively.
Can I run multiple businesses under one LLC in the same county?
Yes, you can operate multiple businesses under one LLC, but it may not always be advisable for liability protection.
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While it's possible to run multiple businesses under one LLC, there are several factors to consider:
- Liability exposure between businesses
- Different tax requirements for each business
- Separate accounting needs
- Industry-specific licensing requirements
Advantages of using one LLC:
- Lower formation and maintenance costs
- Simplified paperwork and tax filing
- Single registered agent requirement
Disadvantages to consider:
- Shared liability between all businesses
- More complex accounting
- Potential confusion for customers and partners
Many professionals recommend separate LLCs when businesses have different risk profiles or operate in different industries.
What happens if I don't file my LLC's annual reports on time?
Missing annual report deadlines can result in late fees, penalties, and potentially the administrative dissolution of your LLC.
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The consequences of missing annual report filings can be severe and escalate over time:
Immediate consequences:
- Late fees (typically $25-100)
- Loss of good standing status
- Inability to obtain certificates of good standing
Long-term consequences:
- Administrative dissolution of the LLC
- Loss of liability protection
- Loss of business name rights
- Potential personal liability for business debts
Reinstatement requirements often include:
- Payment of all past due fees
- Filing of all missing reports
- Additional reinstatement fees
- Possible new formation requirements
Prevention is key - set up reminders and consider using a registered agent service that provides compliance monitoring.
Do I need an operating agreement if I'm the only member of my LLC?
While not always legally required, having an operating agreement is strongly recommended even for single-member LLCs to protect your limited liability status.
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An operating agreement serves several crucial purposes for single-member LLCs:
Legal benefits:
- Reinforces the separation between personal and business assets
- Strengthens liability protection in court
- Prevents state default rules from applying
Practical benefits:
- Helps obtain business loans
- Simplifies business succession planning
- Clarifies business ownership for taxes
Key elements to include:
- Ownership structure and capital contributions
- Management procedures
- Distribution of profits and losses
- Succession planning
- Dissolution procedures
Many banks require an operating agreement to open business accounts, even for single-member LLCs.
It's particularly important in states with strong piercing the corporate veil precedents.
How do county-level zoning laws affect my home-based LLC?
County zoning laws can restrict or prohibit certain business activities in residential areas, requiring special permits or variances.
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Home-based businesses must navigate several county-level considerations:
Common zoning restrictions:
- Customer traffic limitations
- Signage restrictions
- Parking requirements
- Noise and operating hour limitations
- Storage of business materials
Required approvals might include:
- Home occupation permit
- Conditional use permit
- Business license
- HOA approval (if applicable)
Some businesses may be completely prohibited in residential areas:
- Manufacturing operations
- Auto repair shops
- Retail stores with regular customer traffic
- Businesses with hazardous materials
Solutions for zoning issues:
- Virtual office arrangements
- Shared workspace rentals
- Commercial space leasing
Always check with your county zoning office before starting operations to avoid costly violations and fines.
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