LLC for Accounting Firms: doola’s 2024 Guide

Companies are tired of paying a fortune for tax help.

Over 51% of businesses that outsource their entire tax function have seriously slashed their operating costs, and 54% now have access to cutting-edge technology.

So, if you’ve been thinking about starting your own accounting firm, the numbers are totally in your favor!

One of the most important financial decisions you’ll make for your accounting business isn’t just how to file taxes or manage cash flow, it’s choosing the right legal structure.

And LLCs (Limited Liability Companies) are a strong contender. If you’re already considering forming an LLC for your accounting firm, you’re on the right track.

An LLC offers a sweet spot between flexibility, protection, and tax benefits that’s hard to ignore.

In this guide, we’ll break down why an LLC might be your best bet, how to create one, and how doola can help you along the way—from creating a business bank account to maintaining total compliance.

Why LLCs Work for Accounting Firms

LLCs are one of the most popular business structures for small businesses, and they’re particularly well-suited for accounting firms.

Here’s why:

✅ 1. Limited Liability Protection

LLCs give you a strong personal liability protection.

If your accounting firm hits legal trouble or financial turbulence, your personal assets—like your car, home, or savings—is generally safe.

An LLC creates a protective bubble, keeping your personal wealth secure even if the business runs into trouble.

✅ 2. Tax Flexibility

LLCs come with solid tax perks.

Unlike corporations that get taxed twice, LLCs pass the profits and losses straight to you. You report them on your personal tax return, dodging “double taxation”.

It gets better: you can choose how your LLC gets taxed—whether as a sole proprietor, partnership, S corp, or even a C corp.

You get to pick what works best for your business.

✅ 3. Simple and Flexible Operations

LLCs are far less rigid than corporations. You don’t have to deal with corporate formalities like annual meetings and extensive record-keeping.

This makes running an LLC simpler and more straightforward—perfect for accounting professionals who already have enough on their plate.

✅ 4. Credibility Boost

Having “LLC” attached to your firm’s name places you a cut above.

Clients feel more secure working with a registered entity that has a formal business structure, especially when it comes to something as sensitive as their finances.

The LLC badge boosts your credibility and shows that you’re in it for the long haul.

Now that you know why an LLC is a winning move for your accounting firm, let’s break down how to actually get one up and running.

Before you get started, consult the doola experts on how your LLC growth curve will look like post all the tax deductions and legal formalities.

8 Steps to Form Your Accounting Firm LLC

Creating an LLC may seem daunting, but it’s actually a relatively straightforward process with doola by your side.

Here’s a step-by-step guide to setting up your accounting firm as an LLC:

Step 1: Choose a Name

Select a name that’s catchy, memorable, and reflects your firm’s brand. Make sure it’s unique and available in your state.

Step 2: Find a Registered Agent

A registered agent is a person or entity that receives official legal and tax documents on behalf of your LLC.

You can designate yourself, a trusted employee, or hire a third-party service to fulfill this role.

The registered agent must have a physical address in the state where your LLC is registered—no PO boxes here.

TruLease serves as your U.S. long-term physical address, designed to meet KYC compliance and proof of physical address requirements.

Step 3: File Your Papers

To officially form your LLC, you need to file Articles of Organization (sometimes called a Certificate of Formation or Certificate of Organization) with the state.

This paperwork includes all the basics: your LLC’s name, address, and who’s in charge.

Filing fees vary—anywhere from $50 to $500 depending on your state—so budget accordingly.

Step 4: Draft an Operating Agreement

While not always required, an operating agreement is the blueprint for your LLC. It spells out ownership, roles, and how you’ll divide the profits and losses.

What happens if a member wants to leave the business?

Great question! The agreement takes care of that too.

The paperwork is not just for multi-member LLCs—this agreement solidifies your business’s legitimacy and helps avoid future complications, even if you’re the only one running the show.

Step 5: Score an EIN

An EIN (Employer Identification Number) is like your LLC’s Social Security number. It’s a must-have for opening a business bank account, filing taxes, and hiring anyone (even if you’re the only employee).

You can apply for an EIN for free through the IRS website.

Even if you’re the only employee of your firm, having an EIN is crucial for separating your business and personal finances.

Step 6: Register for State Taxes and Licenses

Depending on your state and the nature of your accounting firm, you may need to register for state taxes and obtain specific business licenses.

States have different requirements for LLCs regarding sales tax, payroll tax, and other business-related taxes, so check with your state’s tax authority.

Step 7: Separate Your Finances

doola tip: Never mix your personal and business finances.

This is where a lot of newbie LLC owners go wrong.

To maintain your limited liability protection and keep your accounting firm’s finances in order, you need to open a separate business bank account and credit card.

This helps you stay compliant and makes bookkeeping and tax preparation much easier.

Step 8: Stay Compliant with State Rules

Once your LLC is formed, the work isn’t quite over.

You need to stay compliant with state requirements. This entails

1. Filing annual reports

2. Paying annual fees

3. Maintaining a registered agent.

doola Total Compliance helps you adhere to regulations, maintaining your LLC’s good standing and dodging deadly penalties.

Now that you know how to set up an LLC, you’re one step closer to launching your accounting empire.

Ready to roll?

How doola Helps You Form an LLC

As an accounting firm owner, you’re juggling client books, deciphering tax codes, keeping up with tax law changes—all while trying to get your venture off the ground.

Now that feels like a tricky maze! And this is where doola steps in.

We know you’ve got your hands full and barely have time to tackle the administrative burden of forming your own LLC.

So let us help you streamline the process and get your accounting firm set up the right way.

1. Hassle-free LLC formation

We take care of all the paperwork, from filing your Articles of Organization to getting your EIN.

No need to stress over state-specific requirements or navigating complex forms—doola handles it for you.

2. Compliance Made Easy

Keeping up with compliance deadlines is crucial for protecting your LLC status.

doola helps you stay on top of state requirements like annual reports and renewals, so you never miss a deadline or face unnecessary fines.

3. Bank Account Set-Up Assistance

Once your LLC is formed, you’ll need to separate your personal and business finances.

Team doola helps you set up a business bank account and ensures you’re ready to manage your firm’s finances effectively.

4. Access to Resource

Our team of experts is available to answer questions and guide you through the process of forming and maintaining your LLC.

We also offer resources on bookkeeping, taxes, and more, so you can focus on growing your firm.

Consult a doola tax expert to learn more.

5. Ongoing Support

Your journey doesn’t stop at forming your LLC, and neither does ours. doola provides ongoing support to help your accounting firm thrive, from bookkeeping assistance to compliance tools.

Set Your Accounting Firm Up for Success with doola

Starting an accounting firm is no small feat, and making the right choice when it comes to your business structure is critical to your long-term success.

An LLC offers the flexibility, protection, and tax advantages you need to build a strong foundation for your firm.

But let’s face it—navigating the process can be overwhelming.

That’s why doola is here to help. From forming your LLC to keeping you compliant, we’ve got the tools and resources to set your accounting firm up for success.

Focus on what you do best—helping your clients manage their finances—while we take care of the rest.

Book a free consultation and get your accounting business on the fast track to success!