(Last Updated On: August 16, 2023)

If there’s any industry that has somehow thrived in the face of the pandemic, it’s technology. In fact, the United States saw a 6% growth pattern in 2022 which led to it being the largest tech market in the world. That said, experts see a challenging outlook for 2023. 

With economic issues bringing about inflation, global uncertainty, and shortages in the workforce and supply chain, new businesses must find smarter paths and avenues to weather these challenges. Those who adapt well will be able to ingratiate themselves in a world and economy that rewards innovation and growth. 

For entrepreneurs who aim to launch a software company in the US, doing so with a limited liability company (LLC) structure is one of the best ways to do so. This structure protects your personal assets and mitigates risk in such a venture. Plus, it’s very easy to get started online if you follow the right steps. 

1. Register a Proper Name

Although the specifics of forming an LLC depend on what state you’re planning to register your LLC in, the first step is always to pick a good business name that is compliant with the structure. To register as an LLC, your software company’s officially registered name must include “Limited Liability Company” or one of its abbreviations. 

Of course, you also need to make sure that you have a unique and distinctive name that hasn’t already been taken by another entity. Depending on the state, you can follow a process to use a separate trade name that allows you to conduct business under a different name than what you register. 

2. Choose a Registered Agent

All 50 states require businesses to have a registered agent in order to operate. Some states may have a varied name for this position (such as statutory agent or resident agent) but it is generally the same wherever you are. The registered agent’s role is to receive legal documents, government notices, and service of process on behalf of your software company. 

There are commercial agent services that can help appoint you one with their own office address, but you can also choose to appoint an employee or yourself as the business owner. The latter is not often advised as it can get in the way of your other responsibilities and add unnecessary risk. Either way, you can accomplish the entire process online with your Secretary of State. 

3. Create an Operating Agreement

Although an operating agreement isn’t usually a mandatory part of the process, it’s one of your best safeguards to make your company more profitable. Having a clear breakdown of management structures and delineation will help you optimize your process and maximize your output. It also minimizes risk in terms of disputes while eliminating inefficiencies. This document is usually kept within your own company. 

4. File Your Articles of Organization

An LLC cannot be legally considered a business entity without the right paperwork filed with your State Secretary. All of this can be accomplished online by visiting your state’s respective government website. The exact name will vary depending on your state but you can generally expect to find these under Articles of Organization or Certificates of Formation. 

5. Get your EIN

Once your formation documents have been processed, you must then get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This ensures that your software company will have a deferral tax ID number and legally be able to hire employees. Thankfully, the process is the same regardless of what state you’re registered in. You simply need to visit the official IRS website and file for your EIN online. 

6. Secure Your Accounts, Permits, and Licenses

The last step is about getting any permits and licenses that are relevant to your operations. As a software company, this wouldn’t be as extensive as a retail store or a business in the food and beverage industry. You just need to make sure you have the rights to any software or patents that you are handling. If you are planning to cater to customers beyond the state, you may also need to get a software export license. 

You will also need to create a dedicated bank account for your business. This ensures that the IRS will have clear records for taxation and limits your liability in the event that the company gets legal or financial obligations. It’s also much easier to streamline your business’ financial process if you hold an account solely dedicated to the company.