How to Set Up an LLC For Beginners 2026 (Step-By-Step)

My name is Charlie and as a business owner, one of the most common questions I get is, "Charlie, what is the best way to set up an LLC? " Well, in this video, I'll show you the best, most affordable way to set up an LLC in about 5 to 10 minutes. This is exactly how I've set up multiple businesses myself. That's the exact way that I recommend for you guys to set up your own LLC. So, in the first part of this video, I'll talk about what LLC's are, why you should have one, the pros and cons, as well as why personally I chose to set up multiple LLC's for my businesses. And then in the second part, I'm actually going to show you exactly how to set up an LLC step by step using Northwest. Now, this is my preferred platform to set up an LLC. I actually have an exclusive deal set up with them that saves you guys a ton of money. And yeah, if you want to skip to that part, I'll put the time code right here. And what I just recommend you guys doing is follow along with the video. I'll take you guys step by step through how to actually answer all the questions and in literally 5 10 minutes you'll have your LLC set up. So without further ado, let's get started. Okay, first of all, what is an LLC? An LLC is the most popular type of business structure that exists in the US. LLC stands for limited liability company. And we'll talk more about what limited liability means in this video. But yeah, essentially this is the perfect business structure for small to mediumsiz businesses and new entrepreneurs. And I'd guess that for most of you guys watching this video, it's probably going to be the right choice, too. Now, why should you actually choose an LLC? Well, like I said, they are perfect for small to medium-sized businesses for a ton of different reasons. The first one being that, yes, it makes your business more official. If you want to take entrepreneurship seriously, then you're probably going to want to have an LLC. Next is it actually separates your personal assets from your business assets. So, as a business owner, you never want to mix these two things because we always want to limit our personal liability. Essentially, what happens is, let's say a client sues your business. If they sue your business and you have an LLC, they're actually not going to be able to come after your personal assets. So, your house, your cars, and any other things that you own personally. They can only come after your business assets, which is a huge, huge plus. If you want to raise capital from investors, having an LLC is also going to help with that. Since it's an official business, it puts a lot more trust and also offers this vehicle, this LLC for them to actually invest into. There's also a bunch of different tax advantages which we will talk about. And yeah, overall it's the easiest business entity type to set up and maintain besides a sole proprietorship. Yeah, sole proprietorship doesn't have any of these pros. So that's why I almost never recommend just having a sole proprietorship. Now, in terms of the pros, let's first talk about the tax advantages, especially if you compare it to any other type of business structure. So, for example, a corporation, an LLC is considered a pass through entity, meaning tax is only applied once to the income of the owners. With something like a corporation, right, tax is actually applied twice. Once to the income of the corporation and then also again to the income of the owners and shareholders. So, really, you get past that double taxation, which is absolutely massive. And then also, if you guys want to do an escorp election, this is also extremely easy with an LLC. All you have to do is file IRS form 2553. I'm not going to get too much into this, but essentially you can save a bunch of money on taxes once you reach a certain point in your business. And this is entirely doable with your LLC. Now, let's talk about some of the cons of having an LLC. So, the first being there are higher initial setup and maintenance fees than a sole proprietorship. If you just do business without setting anything up officially, then you're just considered a sole proprietorship and you're really missing out on a lot of the benefits of an LLC. However, of course, there's going to be filing fees, annual report, franchise taxes in some states. And so, you should be aware of some of these fees when it comes to LLC's. Definitely still super worth it, but yeah, just be aware. It's also a bit more complex to maintain than a sole proprietorship. And also, if you want that limited liability protection, you're going to want to maintain that personal and business separation. So, do not co-mingle funds, don't use personal funds for business reasons, and vice versa. Yeah, with all that being said, right, the pros definitely outweigh the cons. That's why most entrepreneurs, including myself, have started multiple LLC's. They're just the easiest, most efficient way to basically start a new business. If you're watching this video, you probably already have a business or you're starting your business right now. So, I do want to say that's a really, really exciting time. I wish all of you guys the best of luck and creating an LLC is one of those first major steps that I recommend doing. So, now we've sort of talked about what LLC's are. Let me now take you guys through setting up your own LLC. This is the fun part and it can get a little bit complicated with all the different options. So, I'm just going to walk you through the whole process from A to Z. Feel free to just follow along. I'll have a link down below to Northwest. And the only way to get this special $39 formation package is through that link. I did a ton of work to set this up for you guys just to save you a bunch of money. And so yeah, scan this QR code, click that link down below, and it's going to take you to this exact landing page. So yeah, if you haven't heard of Northwest, they're one of the most popular LLC formation platforms. So the first thing we're

going to want to do is click on this button right here. And yeah, let's walk through this whole process step by step. Again, feel free to follow along. And the first thing we're going to do is click on entity type. So since we are forming an LLC, you'll want to keep this as is. And for jurisdiction, you're going to select the state in which you do your business. So for me, I live in California and my business is based here. So I'll select California, but select accordingly. And just note that every order on here actually comes with one free year of registered agent service, which is extremely important to have. You also get a ton of other bonuses like a free domain, website, email, phone, just a bunch of really helpful things to get your business kicked off. So now we're going to select whether or not we want standard or expedited filing. This is a fee that you're going to have to pay regardless of what service you use. So even if you try to create your LLC yourself, you'd also need to pay this fee. So this might look a little bit different depending on what state you are in, but I'm just going to leave it as standard. And now we'll click on continue. It's going to have you enter in your company name. So I'm going to go ahead and enter that in right here. Next, you're going to choose whether or not you want to send a copy of any legal notices to your attorney. Most of you guys won't have an attorney, so just select no. But if you do, feel free to select yes and put their contact info. I've always selected no, so just feel free to do that. And then you're going to enter in your business purpose. So just a few words or sentences. It doesn't need to be too complicated. So I went ahead and just wrote something really quick. Don't worry too much about this. Now, here's where you're going to select the physical address you want on record with the state as well as the mailing address you want on record. Now, you can use your own mailing address if you want, but I really do not recommend that since this is public information. Literally, anyone can look up your business and see this address. So, yeah, don't use your home address. This is a mistake that I've made in the past. Use the registered agent service. Like I said, you get a free year of it, which is worth, I think, $125. And so, yeah, for most of you guys watching this, I just recommend leaving it on our registered agent address. We'll now click continue. And now you're going to select your company management. So, if you ever have any questions about any of this stuff, just click on this little question mark icon. It's going to give you some more information about what you are selecting right now. Now, the two options we have are member managed and manager managed. Now, for almost all you guys watching this video, it's going to be member managed since it's managed by you yourself, the owner. If you want to hire an actual manager to manage your LLC for you, then of course, select the other one. Now, for member number one, it's probably going to be you. So, put your first name and last name. And for the address, just use the registered agent address. If your LLC is going to have multiple owners or members, then you're going to want to click on this and add a new member. But for this business, it's only me. So, it's just going to be member number one. We'll now click on continue. Now, going to give you the option to add on some additional services if you want. So, the first one being tax ID. This is your EIN. Think of this as your social security number for your business. This is the number that you're going to need to, for example, file taxes as well as open up a business bank account. You can pay Northwest to do this for you for $50. I will say it is very simple to do this yourself. It should take about 5 minutes. And if you guys actually go down below to our LLC consultation guide, it's going to have all the directions for you. Yeah, if you don't want to handle any of that yourself, you could just have them do this for you for 50 bucks. Totally up to you guys. I'll just uncheck this for now. If you want to get your escorp election with the IRS, they can also do that for you for $100. For most of you guys, I just recommend doing this later on. All you have to do is file form 2553 yourself. Very easy to do, or your CPA can do it for you. If you also want any of these other services like premium mail service, trademark filing or a DBA, then you can select these as well. But for this video, I'm not going to select those since I do not need any of them. So now we'll create an account. So all you'll need to do is enter in your email address. We'll then create a password. So I just always recommend generating it. Save this into your password manager or whatever. This is the most secure way to do it. We now click on continue. Now we'll enter in our contact information. Make sure all this is correct. Now, we'll go to payment information. And once you're done there, click on submit order. Now, once you pay, you're going to get access to your account dashboard. That's where you're going to be able to see all your registered agent information. And then you can start setting up your website, your email addresses, your phone line, and any other things that you need to start your business. At any point, if you want to cancel any of those services, you can do that within your account. But yeah, once you click submit order, they're going to start processing your LLC formation for you. Yeah. All you have to do is sit back and wait for it to be officially processed. I cannot stress how amazing these platforms are because you used to have to do this yourself. Really complicated. You definitely don't want to mess up when filing an LLC. And so when you use a platform like Northwest, they're basically going to do everything correctly for you and just ensure that you do it compliantly. The last thing you want to do is have some type of error in your LLC filing. And so that's why I just really recommend using platforms like Northwest. So yeah, as you guys just saw, it's super simple. It takes about 5 to 10 minutes to set up your LLC. And yeah, this is by far the cheapest and best way to do it. I personally created multiple businesses with Northwest. I really like them. And

as you saw too, it's also really affordable to actually file. And so yeah, if you guys want to support the channel, you guys can use the link in the description below. You're going to get that exclusive $39 package, which is only available for my audience. So hopefully it saves you some money. I'll also get a small commission from it. And I do want to say thank you so much. It really does help support the channel. And yeah, if you're starting out your business, I want to say good luck. I'm really rooting for you. Entrepreneurship is amazing. It's helped me build the lifestyle that I have today, and it can do the same for you as well. I also put a ton of other different resources we have for new business owners. For example, how to start a service-based business, a bunch of other guides we have because, yeah, helping out new entrepreneurs is my biggest passion. And if there's anything I can do to help you along with your entrepreneurship journey, just let me know. I'm here to help. And yeah, hopefully you guys got some value out of this video. If you didn't, make sure to hit that like button, subscribe, whatever. And on this channel, I make a ton of videos about entrepreneurship, finance, tutorials, education. It's all really to help you guys live a financially successful life. Again, thank you so much for your time, and I will see you in the next video. Peace.