Justin Clay
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How to Start an LLC The Right Way
Limited liability only works if you do all 3 steps. Most people skip steps 2 and 3.
Over 500 entrepreneurs choose Surge.
Scroll to learn why!
The point of an LLC isn't to have an LLC. It's to protect your personal assets (house, car, savings) when your business gets sued or goes into debt. If you skip the operating agreement or ignore corporate formalities, a lawyer can 'pierce the veil' and take everything you own. Here's how to actually get protected.
What Does ‘Limited Liability’ Actually Mean?
Without an LLC, you operate as a sole proprietorship. If your business gets sued, they can take your house, car, and savings. An LLC creates a legal barrier between you and your business. When properly formed and maintained, creditors can only go after business assets—not your personal stuff.
But here's the catch: That protection only works if you follow all three steps below. Skip one, and the liability shield fails.
Why Choose an LLC?
LLCs are perfect for founders who value simplicity and flexibility:
Limited Liability Protection
Your personal assets (house, car, savings) stay protected from business debts and lawsuits—if you set it up correctly.
Simple to Run
No board meetings, no complex corporate formalities. Just straightforward record-keeping and basic compliance.
Flexible Tax Options
Pass-through taxation by default, but you can elect S-corp status to save on taxes as you grow. We'll help you decide.
Easy Ownership Structure
Add partners, bring on co-founders, or stay solo. LLCs adapt to your business without rigid stock requirements.
Flexible Profit Distribution
Unlike corporations, you can distribute profits however you want—not just by ownership percentage.
Less Paperwork
Corporations require bylaws, board minutes, annual meetings. LLCs require an operating agreement and basic formalities.
How to Start an LLC: The 3 Required Steps
Most people only do Step 1. That’s why so many business owners think they’re protected when they’re actually not.
Step 1
Step 1: File with the State
What it is: Submit your Articles of Organization to register your LLC with the state government. This makes it official.
Can you do it yourself? Yes. It's pretty straightforward. Filing fees are $50 in Iowa, $300 in Texas.
What's involved: Choose a business name, pick a registered agent, submit the articles, get your EIN from the IRS.
Why work with us: We make sure you choose the right entity structure from the start (single-member vs multi-member, considering S-corp election, etc.). Getting this wrong costs thousands to fix later.
Step 2
Step 2: Draft an Operating Agreement
What it is: A legal contract between you (the owner) and your LLC. It defines ownership, management, profit distribution, and what happens in disputes or exits.
Can you do it yourself? Not recommended. Generic templates from LegalZoom won't protect you when things go wrong. This is what courts look at when someone sues you or when partners fight.
What's involved: Ownership percentages, voting rights, profit/loss distribution, buyout terms, dispute resolution, dissolution procedures.
Why you need a lawyer: Cookie-cutter templates miss critical protections. We customize your operating agreement for your specific business, risk level, and growth plans. This document is your insurance policy when disputes happen.
Step 3
Step 3: Follow Corporate Formalities
What it is: Treating your LLC as a separate legal entity—not just an extension of yourself. This is what maintains your liability shield.
Can you do it yourself? Yes, but most people don't know what's required. We give you a clear checklist.
What's involved: Separate business bank account, proper contract signatures (sign as 'Member' not personally), business insurance, keeping personal and business finances separate, maintaining proper records.
Why it matters: If you ignore formalities, lawyers can 'pierce the corporate veil' in a lawsuit. That means they can take your house, car, and savings even though you have an LLC. We teach you exactly what to do (and what not to do) to stay protected.
What Is ‘Piercing the Corporate Veil’?
This is the legal term for when a court decides your LLC doesn’t count. If you skip Step 2 (operating agreement) or Step 3 (corporate formalities), judges can rule that your LLC is just a ‘sham’—and suddenly your personal assets are fair game.
Common reasons courts pierce the veil:
- → Mixing personal and business bank accounts
→ Signing contracts personally instead of as ‘Member’ or ‘Manager’
→ No operating agreement or using a generic template that doesn’t fit your business
- → Using business funds for personal expenses (or vice versa)
- → Inadequate business insurance
- → Fraudulent transfers or hiding assets
We help you avoid these mistakes. Our operating agreements are customized for your situation, and we give you a clear guide on maintaining formalities.
LLC vs Corporation: Which Do You Need?
Choose an LLC if:
Good fit for: Consultants, agencies, local businesses, real estate, most small businesses
Consider a Corporation if:
Not sure? Book a free consultation. We'll help you decide in 15 minutes.
LLC Formation Pricing
All plans include proper registration, custom operating agreement, and guidance on maintaining your liability shield.
Launch Basic
Solo founders, simple LLC
- LLC formation + custom operating agreement
- 5 months of unlimited email support
- 5 monthly 1-on-1 strategy calls
- Contract templates, tax guidance, business coaching
- Total: $1,975 (plus $50-300 filing fees)
$395/mo x 5
Book Free Consultation Launch Advanced
Partnerships & multi-owner LLCs
- Everything in Launch Basic
- Multi-member operating agreement
- Enhanced founder agreements
- Partnership guidance, equity splits, buyout planning
- Total: $2,450 (plus $50-300 filing fees)
$490/mo x 5
Book Free Consultation Series LLC / Holding Company
Real estate investors, multiple properties
- Series LLC or holding company formation
- Customized operating agreements
- Asset protection strategy
- FinCEN BOI setup, EIN
- Best for: Landlords with multiple properties
$950 one-time + filing fees
Get Started 💡 Launch Plan vs One-Time: If you'll have any questions in your first 5 months (hiring, contracts, pricing, compliance), the Launch Plan saves you money. You get unlimited questions for $1,975 total.
Frequently Asked Questions
Do I need an LLC, or can I just operate as a sole proprietorship?
You can operate as a sole proprietorship (no LLC), but your personal assets aren't protected. If a client sues your business, they can take your house, car, and savings. An LLC creates a legal barrier between you and your business. Worth it for any business with risk.
Can I form an LLC myself for $50?
Yes—you can file the registration yourself for just the state filing fee. But that's like buying a car and skipping the insurance. You need a proper operating agreement and knowledge of corporate formalities to actually get liability protection. DIY registration without those = false sense of security.
What's an operating agreement and why do I need one?
Your operating agreement is what courts look at when someone sues you or disputes arise. It defines ownership, decision-making, profit distribution, and what happens if someone wants out. Generic templates from LegalZoom won't protect you in real disputes. We customize yours for your specific situation.
Can I convert my LLC to a corporation later if I need investors?
Yes. Many businesses start as LLCs and convert to C-corps when they're ready to raise venture capital. We can help you plan for that transition. But if you know you'll raise money from passive investors, start as a corporation.
Should I elect S-corp status for my LLC?
Maybe. S-corp election can save you money on self-employment taxes once you're profitable ($50k+ revenue). But it adds payroll requirements and complexity. We'll help you decide during your Launch Plan or consultation. Most new businesses should wait until they're profitable.
What are 'corporate formalities' and why do they matter?
Corporate formalities = treating your business like a separate entity. That means: separate bank account, signing contracts correctly, business insurance, not mixing personal/business expenses. If you ignore these, a lawyer can 'pierce the corporate veil' and come after your personal assets in a lawsuit. We teach you how to stay protected.
I have a partner/co-founder. Do we need anything special?
Yes—you need the Advanced LLC Formation ($950) or Launch Plan. Multi-member LLCs require more detailed operating agreements covering ownership splits, decision-making authority, profit distribution, buyout terms, and what happens if someone wants out. Partnerships without clear agreements = expensive disputes later.
What's included in the Launch Plan that's not in the flat-fee options?
Launch Plan = Formation + 5 months of unlimited email support + monthly strategy calls. You get answers to every question: hiring, contracts, pricing, taxes, compliance, growth strategy. It's like having a lawyer and business advisor on retainer for 5 months. Most clients say the support is worth 10x the cost.
Don’t Waste Time Googling LLC Questions
Most new LLC owners spend 10-20 hours Googling questions like:
- → “Do I need a separate bank account?”
- → “How do I sign contracts as an LLC?”
- → “Should I elect S-corp status?”
- → “What’s a registered agent?”
- → “Can I hire contractors as an LLC?”
That’s time you could spend landing customers and making money.
The Launch Plan gives you unlimited email access to a business attorney for 5 months. Ask anything, anytime.
Book Your Free Consultation
What LLC Founders Say
Google Reviews
Cassie Serrata
1755617793
G
Rated 5 out of 5 stars
Matt and his team are knowledgable, friendly and efficient. They helped me get my LLC up and running. Highly recommend his legal services for any small business owner.
Mo Yang
1754073513
G
Rated 5 out of 5 stars
He wasn’t trying to sell me something I didn’t need, but instead gave advice that was truly in my best interest.
Ready to Start Your LLC the Right Way?
Book a free consultation. We’ll help you understand exactly what you need, answer your questions, and give you a clear plan forward. No pressure, no sales pitch—just straight answers.