Do I Need an LLC or a Business License?

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A limited liability company protects your personal assets from business creditors, much the way a corporation does. To set up an LLC, you have to file articles of organization with your state government. The articles include your company name, the names of all the members, and your contact information. You don't need a special license to open an LLC, though you might need the same kind of local business license that other businesses have to take out.

Business Licenses

Most cities and counties, and some states, require a business license or registration if you do business within their jurisdictions. A business license typically comes with an annual fee you pay to the government to operate legally. It might be a flat fee or based on your annual revenue and the type of business you run. The Small Business Administration website has a tool for finding what licenses are necessary in your zip code (see Resources).