Business Formations
What to Do After You Form Your LLC
Written and reviewed by Andrew R. Schneidman, Esq. · Last reviewed
Filing formation paperwork with the state creates the entity, but it does not organize the business. The steps that follow decide who owns what, who decides what, and whether the business is actually ready to sign contracts and hire people.
For the state-by-state filing mechanics, see starting an LLC in Tennessee. This guide covers what comes after the filing is accepted.
What comes after filing the formation paperwork?
After formation is accepted, a new LLC still needs an operating agreement, an EIN, a dedicated bank account, and any state or local licenses the business requires before it can actually operate and sign contracts.
The filing itself is a short public document that says almost nothing about how the business runs. Everything that determines ownership, decision-making, and what happens when an owner leaves lives in the steps that follow, not in the filing.
- Adopt a written operating agreement
- Obtain an EIN from the IRS
- Open a dedicated business bank account
- Register for applicable state and local business licenses
- Put initial contracts and policies in place before the first customer or hire
Why does the operating agreement matter more than the filing?
The operating agreement is a private document that governs ownership percentages, decision-making authority, and what happens when an owner leaves, dies, or wants out, none of which the public formation filing addresses at all.
Without a written operating agreement, state default rules decide those questions, and the defaults rarely match what the owners would have chosen. Banks, lenders, and future buyers will also ask to see it before they do business with the company. Getting it in writing while the owners still agree is far cheaper than negotiating it after a disagreement has already started.
Andrew’s take
I tell every new client the same thing: invest in a proper operating agreement at the outset, before money, exits, or breakups muddy things up. A small amount spent getting it right on the front end saves months of legal fees and headache on the back end.
What other setup steps do new businesses skip?
New businesses commonly skip separating personal and business finances, putting early contracts in writing, and registering for the licenses their specific industry or location requires, all of which are easy to fix early and expensive to fix later.
Mixing personal and business funds is one of the fastest ways to undermine the liability protection the entity was formed to provide. Verbal agreements with an early customer, contractor, or co-founder feel fine until the business grows enough that the details matter, and by then memories have already started to diverge. The business contracts guides cover what belongs in those early agreements.
When does a new business need a lawyer instead of a template?
A template is usually fine for the formation filing itself. A lawyer earns its cost on the operating agreement and the early contracts, where a generic template cannot account for the specific owners, the specific business, and what they actually agreed to.
The gap between a template and a document written for your business rarely shows up on day one. It shows up months or years later, when an owner wants out, a customer disputes a term, or an investor asks a question the template never anticipated. Do you need a lawyer to form a business covers where that line sits in more detail.
Frequently asked questions
Do I need an operating agreement if I am the only owner?+
Yes. A single-member LLC still benefits from a written operating agreement, since it reinforces that the business is a separate entity from its owner, which matters if the liability protection is ever tested, and banks and future buyers will still ask to see it.
How soon after formation should these steps happen?+
Before the business signs its first contract, hires its first person, or takes its first payment. Operating without an operating agreement, an EIN, or a separate bank account creates gaps that are simple to close early and much harder to unwind once the business is already running.
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