Ever wonder how to form  your own company? Heres how to form and LLC in 5 easy steps.

1. Choose a business name that complies with your state’s LLC rules.
2. File formal paperwork, usually called articles of organization, and pay the filing fee ($100 to $800, depending on your state’s rules).
3. Create an LLC operating agreement. The operating agreement sets out the rights and responsibilities of the LLC members.
4. Publish a notice of your intent to form an LLC (required in only a few states).
5. Obtain licenses and permits that may be required for your business.

Naming your LLC

The name of your LLC must comply with the rules set forth by your states LLC division. Each state will have specific rules but generally the following rules apply everywher

• Your company name can not be the same name as an existing company
• The name must end with an LLC designator. Such as LLC, L.L.C, Limited Liability Company or Limited Company
• The name can not contain certain words prohibited by the state such as Bank, Insurance, Corporation or City. Each state has rules designating prohibited names.

Articles of Organization and Filing fees

I know the same sounds intimidating, but articles of organzation are short simple documents. Often, you can fill these out using a form provided by your state filling in the required information. Typically, you need to fill in the name of your LLC, the operating address and the name of the owners, called members.

You will also be required to provide the name and address of your LLC’s “registered agent”. Your agent is the person who will receive legal papers in any future lawsuit involving your LLC.

Once you have your articles of organization completed it is time to file them with the state. In most states, the filing fees are modest — typically around $100. In a few others the fees are more expensive. California charges an $800 annual tax on top of its filing fees.

Creating an LLC Operating Agreement

A LLC operating agreement establishes the rules for ownership and operation of the business. Typically an operating agreement includes the following.

• the members’ percentage interests in the business
• the members’ rights and responsibilities
• the members’ voting power
• how profits and losses will be allocated
• how the LLC will be managed
• rules for holding meetings and taking votes
• “buy-sell” provisions, which establish rules for what happens if a member wants to sell his or her interest, dies, or becomes disabled.

License and permits

Once you have completed the previous steps your LLC is official. But before you open your doors for business, you need to obtain the licenses and permits that all new businesses must have to operate. These may include a business license, a federal employer identification number, a sellers’ permit, or a zoning permit.