Computers have penetrated every household and become the primary tool used by most of today’s businesses.

However, most of us have little to no knowledge of how to fix them if an issue occurs. Luckily, there are tech support companies providing support on an as-needed basis. 

So, in a world where glitches and software hiccups are just part of the daily grind, there’s never been a better time to turn your tech-savvy skills into a thriving tech support business.

Establishing your tech support venture can be incredibly rewarding—and profitable! 

But before you dive foot first into this exciting new chapter, there’s one crucial step you need to take: forming an LLC.

In this comprehensive guide, we’ll walk you through every step of setting up an LLC tailored specifically for tech support entrepreneurs like yourself.

If you want more information before getting started, book a consultation with the experts at doola, who can give you an in-depth overview of our LLC Formation Services.

Let’s dive in to equip you with the tools and knowledge needed to start bright and succeed fiercely in this dynamic industry!!

CTRL+C to LLC: The Best Entity Type for a Tech Support Business

One thing you cannot overlook when starting your tech support business is establishing a solid business foundation. While sole proprietorships and C-corps are the most common entity types, they’re a far less stable and beneficial option than LLCs.

This is because running unincorporated businesses like sole proprietorships and partnerships might expose their owner to business debts and legal actions.

However, LLCs protect you by keeping your assets separate from your business’s liabilities while ensuring you can reap the benefits of flexible taxation.

Limited personal liability means that as an LLC owner, your assets, such as your car, home, or savings, will not be at risk if the business faces financial difficulties or lawsuits.

Your personal liabilities are kept separate from those of the company, providing you with a layer of protection.

With an LLC, you have the flexibility to structure your management in any way that suits your business needs.

You can decide, depending on whether you want all members to participate in daily operations or assign managerial responsibilities to designated individuals.

Another significant advantage is its pass-through taxation feature. This means that profits and losses from your business will flow through to your personal tax return instead of being taxed twice.

Unlike corporations, where shareholders cannot quickly transfer their ownership, LLCs allow for more flexibility and ease of ownership transfer. Additionally, LLCs have no restrictions on the number or type of owners, allowing you to bring in new partners as members without any hassle.

From Rudimentary to Binary: A Step-by-Step Guide to Tech Support LLC

The IT industry is one of the most attractive areas of business progress. This is the right time to build a high-performing global tech support business without coding skills.

So, in this step-by-step guide, we will walk you through how to start an LLC and set it up for success.

Step 1: Choose a Business Name

When it comes to business names, the first impression is often the best impression. Your business name will represent your brand, so you must choose one that is unique, catchy, and accurately reflects what your business does.

Start by brainstorming different names and making a list of words or phrases that describe your services, values, and target audience.

Most states won’t allow businesses to choose a name that another company is already using, so find one that is unique to you.

Each state has its own set of naming rules for LLCs, so be sure to check with the Secretary of State website where you plan on registering your business.

Once you’ve settled on some potential names, check their availability before officially registering them as part of your LLC.

If you want a website that matches your business name, check the availability of domain names on GoDaddy. You should also secure social media handles with the same names for consistency across all platforms.

Step 2: Determine the Best State to Form Your LLC 

Each state has its own set of laws and regulations regarding forming an LLC, and some states are more favorable than others for tech support businesses. In most cases, the state in which you’re residing will most likely be the best place to form your LLC. 

However, in some cases, the best state to start your LLC is not your home state. This is likely to be true if you live in a state with high fees or high taxes, like California or Massachusetts.

Luckily, you are not required to form an LLC in the state where you reside or where your business operates. If another state offers better advantages for your tech support business, you have the option of forming your LLC there instead.

Some states have lower taxes or special tax incentives for small businesses, making them attractive options for LLC formation.

The fees associated with setting up an LLC vary by state, so choose a state that has lower ongoing maintenance fees or annual report filing fees.

Delaware is the top choice for businesses because it is the most business-friendly state due to low taxes and privacy protections. This is the reason why 66.8% of all Fortune 500 companies are incorporated in Delaware.

We also recommend Wyoming or Nevada since both states don’t impose income taxes, either personal or corporate, nor do they levy franchise taxes, although they do have a gross receipts tax.

Step 3: Select a Registered Agent for Your LLC

In most states, designating a Registered Agent is legally required to form an LLC. This is a person or entity responsible for receiving legal and official documents on behalf of your LLC. 

They serve as the official point of contact between your LLC and the state government. They are responsible for receiving all critical documents and forwarding them to the appropriate parties within your company.

While some states allow businesses or entities like attorneys or third-party service providers to serve as agents, you can also designate yourself, a trusted employee, or a family member for this position.

The requirements for becoming a registered agent vary by state but generally include having a physical address in the state where your LLC operates and being available during regular business hours to receive documents. 

An individual may offer more personalized service and better communication, but an agency or company have more resources and experience in handling legal matters.

So, you must choose someone with experience in handling legal matters and any potential issues that may arise.

Once you have selected your registered agent, they must give their consent to serve as your LLC’s registered agent by signing a document known as the “Consent to Appointment.” This form is usually included in the LLC formation paperwork and filed with the state.

Step 4: Register Your LLC with the State

The most crucial step in registering your LLC is filing Articles of Organization and registering your LLC with the state. This process officially establishes your business as a separate legal entity and ensures that you have all the necessary paperwork to operate your business.

The Articles of Organization is a legal document that typically includes basic information about your business, such as its name, address, purpose, management structure, and members’ names. You can find templates or consult a professional to prepare this document for you.

Once you have prepared all necessary documents, you must submit them along with any filing fees required by the state. These fees may vary, but they typically range from $50 to $500. It may take anywhere from two days to several weeks for the state to process your LLC formation documents.

Step 5: Create an Operating Agreement

An Operating Agreement serves as a blueprint for how your business will be run and helps prevent misunderstandings or conflicts among members. While it is not required by law, it can provide clarity and protection for both the LLC and its members.

Most states have default rules that govern LLCs without an Operating Agreement, but you may want to tailor these rules to suit your needs. A quick search on your state’s official website or a consultation with a legal professional can help you determine what is needed.

Your operating agreement specifies how decisions will be made within the LLC, whether it will follow a member-managed or manager-managed structure.

It also defines the roles and responsibilities of each member or manager involved in running the business. 

This includes tasks such as bookkeeping, marketing, client acquisition, etc. However, the most crucial role of an Operating Agreement is determining profit distribution among its members, establishing meeting procedures, and outlining the steps for closing or dissolving the LLC.

Remember, an operating agreement is a living document and can be amended if needed. However, changes should be made with proper documentation and all members’ consent.

Step 6: Obtain Necessary Business Permits and Licenses

Obtaining an Employer Identification Number (EIN) is a unique nine-digit number, also known as a Federal Tax ID Number, issued by the Internal Revenue Service (IRS) to identify your business for tax purposes. It is required for almost all types of companies, including LLCs.

To obtain an EIN, you can either apply online on the IRS website or use other methods such as mail, fax, or phone. The online application is the quickest and most convenient way to get your EIN instantly.

In addition to getting an EIN, you may also need to register for state taxes and licenses, depending on your state’s specific requirements. For example, you may need a general business license or a specific professional license such as an IT technician license.

Step 7: Set Up a Business Bank Account

Once you have successfully registered your LLC, it’s time to take the necessary steps to set up a business bank account. This helps to keep personal and business finances separate, makes tax filing easier, and provides a clear view of your company’s financial health.

The first step in setting up a business bank account is deciding which bank is right for your LLC. You can choose online banks like Mercury, which offer better rates and services tailored specifically for startups. 

Once you have chosen a bank, you will need to gather all the necessary documents required to open a business account. This typically includes your Employer Identification Number (EIN), Articles of Organization (or Formation), and any other relevant paperwork.

It is highly recommended that you keep good accounting records for your LLC from day one. This means establishing accounting procedures that will help track income, expenses, assets, and liabilities accurately. 

One way to do this is to create an organized system using bookkeeping software or hire a professional bookkeeper to manage this task for you. 

Get started with our bookkeeping solution to ensure tax filings, or consult our certified public accountant (CPA) to maximize tax deductions and comply with federal and state regulations.

Step 8: Maintain Compliance with Annual Requirements and Taxes

Forming an LLC is just the first step. To keep your business running smoothly and legally, you must also maintain compliance with annual requirements and taxes.

These may include submitting an annual report or statement of information, renewing licenses and permits, and more.

One of the most common annual requirements for LLCs is the submission of an annual report or statement of information. The due date for this report varies depending on the state where you formed your LLC. Make sure to mark these dates on your calendar so that you don’t miss them.

In addition to filing tax returns and paying tax bills, some states also require LLCs to pay annual fees or franchise taxes. It is essential to budget for these expenses and make timely payments to avoid any penalties.

Get Your Tech Venture off the Ground in No Time with doola

Starting a tech support business is not a piece of cake, especially for those who are new to entrepreneurship. You have made the right choice by deciding to set up an LLC for your tech support business. 

However, this is where your will gets tested since you may have to face new challenges when you least expect them. That’s why doola is here to help.

Our Business Formation services make forming an LLC a breeze from start to finish. This includes all necessary steps, such as filing Articles of Organization, drafting Operating Agreements, and obtaining an EIN – all carefully designed according to state-specific regulations.

We handle all the paperwork and filing requirements on your behalf while guiding you through all aspects of formation and compliance. 

This ensures that your business will always remain in good standing with the state, giving you more time to focus on growing and running your tech support company.