Why You Should Register Your Business As An LLC


I always feel super humbled when I am one of the first resources that a business contacts when they start their new ventures. A lot of my discovery calls tend to be conversational (which I love!) and for some reason the conversation of LLCs has come up quite frequently over the past few weeks, so I thought that putting together details on registering as an LLC would be beneficial for others I may not have talked to yet!

An LLC is a “Limited Liability Company”—pretty much the tax halfway mark between a sole proprietorship and a corporation. It sounds official, but really it means you’re in small business heaven because an LLC gives you the tax benefits of a sole proprietorship with the liability protection of a corporation (more on that in a bit).

If someone is unsure about exactly when they should register for an LLC,I can only share my personal experience but it’s important to have a plan to truly invest and grow your business before registering it. I say that because it can cost you anywhere from $100 - $1000 to register, meaning you want to make sure you can make that money back and it’s worth investing in. That being said, I’d venture to say that if you’re reading this blog post, you already know your answer 😉 Personally, I registered The Busy Bee as an LLC about a year before I became a full time entrepreneur. I knew it was something I was ready to put more time and energy into and therefore wanted to protect myself and my future business by registering it.

I’m glad I did—around this time I also received my first cease and desist letter. I had been selling baby bodysuits on Etsy and tagging them as “onesies.” I received a cease and desist from Gerber, telling me that they actually had the word “onesie” trademarked, and if I didn’t change my listing tags and titles, there was a potential of them pursuing legal action. I obviously ended up changing the titles + tags, but if Gerber would have sued me and I wasn’t protected as an LLC, they could have sued me on a personal level, potentially having the ability to take away my car and other higher-priced items I owned. An LLC allows you to separate your personal belongings from your business, which is super important.

A common misconception I’ve heard (and even wondered myself during hours upon hours of researching LLCs when I was in your shoes) is that you need a lawyer in order to register. The truth is, you don’t! If  you file for the LLC by yourself, all you need to pay are the filing fees, which differ between each state (here is a list of the costs per state). If you use a lawyer, it will cost you at least $1,000. If you use an online “legal help” site (like LegalZoom), plan on spending anywhere between $100-$1,000, depending on what state you live in. After your first year, there is also an annual or biannual fee you’ll need to pay (with the exception of a few states) that averages about $50/year. Again, this fee varies between each state. The best part is, if you chose to apply online it really only takes about 15 minutes or so!

Keep in mind, it IS possible to be declined your LLC if you don’t research appropriately beforehand. The main reason for this is if you’re trying to register your LLC for a name that someone already has within your state. In order to check this beforehand (so you don’t get rejected), you can do a preliminary search through your Secretary of State’s website. To quickly find the page, search Google for Your State Name + LLC Database and one of the first few results should take you right there. For reference, here is Wisconsin’s Corporate Database site. I wouldn’t worry too much about this part as long as you know that you’re working under a unique name!

When it comes to anything with your business, it’s important to do your research. If working with a lawyer makes you feel more comfortable, I say go for it! Otherwise, a few of the resources I’ve shared today should help you get started.

Why You Should Register Your Business An An LLC - The Busy Bee