Forming a legal entity: Can you start an LLC by yourself?

A common question in all states is whether or not a lawyer is needed to form a new LLC. The simple answer is that a lawyer can be very helpful and that the extra charges that come from using a premium service may be offset in later years if a good structure is followed. Yet, as we know, most startups are on a budget and legal fees is something they seek to avoid. Therefore we will take a closer look at this to strike a balance:


A Limited Liability Company (LLC) is a popular way to start a business as it protects the owners from personal liabilities should actions be taken against the business. Starting an LLC in 2020 doesn’t have to be an arduous and time consuming process. Formation services has made it effortless for anyone looking to form an LLC. Nevertheless, LLC formation can also be done without the assistance of formation services. It is possible to start an LLC on your own, but the process comes with some risks involved. There are a few key pieces of information to consider before making the decision of how to start an LLC. 


1.   State laws and regulations

Every state differs in requirements when setting up an LLC. Something that seems simple such as choosing a name can become a source of costly delays in the registration process if one is not aware of the state laws. For example, in the state of Florida, an LLC name must include the words “Limited Liability Company” (LLC), or “Limited Company” (LC). Formation services know all the state laws and what exactly is required to avoid delays in the process. If one is unaware of all the required regulations and rules, it might be a better option to choose a formation service for assistance.


2.   Operating agreement

An Operating Agreement is a document that outlines how the business will function as well as how it will be managed. For first time start-ups not familiar with drafting legal documentation, this can be a laborious exercise. Although some states do not require an Operating Agreement to be submitted in order to start an LLC, it is advisable to do so. Most formation services include this in their packages offered which means professional assistance and hassle free documentation.


3.   Registered agent

Should a start-up decide to forgo the services of a formation company, it is still required that a registered agent be appointed. A registered agent is a third-party that receives all legal documentation from the state on behalf of the LLC. Finding an agent with quality service can be tiresome and difficult as there are quite a few in the market. Asking other business owners who they used is a great option, but most formation services also offer this feature or include it in their packages. The registered agent service fee will have to be renewed annually and can vary greatly in cost depending on which company is chosen to represent the LLC.

4.   Costs

Many start-ups have a tight budget when starting out. Forming an LLC on your own can save money by not having to pay an LLC formation service, however the reverse can also be true. In business time is money and every minute wasted is time that could’ve been spent making profits. When unfamiliar with the filing process and state laws, it is very likely that mistakes will be made which in turn can cause major delays in the registration process. This means the business is delayed in starting its operations and money is lost. Streamlining the process by using a formation service, can actually save costs in the end. It will depend on the knowledge of the business owner whether utilizing an LLC formation service is worth it.


Final take:

You may want to use a lawyer if it is in your budget. Sometimes taking a long-term view is better for your business and all those unforeseen circumstances.



These are only some of the topics to consider when wanting to form an LLC. Many businesses require additional documentation and services such as legal services, web services, advisory services etc. Forming an LLC on your own means that these services can be compared to find the best prices and features to suit the specific business. This can save costs, but can also be time consuming. Most LLC formation companies offer additional features such as the services mentioned. Having one point of contact for services can make starting an LLC significantly easier and choosing a company with excellent client service systems means help is never far away.