In the last three weeks, I got engaged, went viral, attended a week-long conference, booked a wedding venue, and yesterday I applied to create an LLC in my name.

It’s been a lot of new experiences.

I’ve never had a company of my own before, so I learned a lot. I am not an expert, but I wanted to document my basic learnings for myself and for others who are thinking of doing the same thing.

My context:

• I am 23 years old, which is old enough to be a legal adult for all relevant purposes.
• I am living in Michigan, and created my LLC here (which you arguably shouldn’t do)

Top 9 things I learned when creating my LLC

1. “Limited liability” is a meaningful benefit. I debated between acting as a sole proprietership vs a single-member LLC. A sole proprietership does not require any paperwork upfront; you just tell the government that you made money doing business when you file your taxes. However, I chose an LLC because if someone sues me (which is possible when working with sensitive student information), the company is at risk but my personal bank account is not.
2. Registering in Michigan was just a short online form. There was a $50 application fee and it was processed within a few days.
3. I chose to use a generic name, “Pullen Educational Technology LLC”, rather than the name “Shuffle Buddy”. This is because I want to start up additional side businesses in the future and I don’t want to create another separate LLC next time. (I want less paperwork & easier taxes.)
4. I can still call my company “Shuffle Buddy” on paperwork using a “doing business as” name. I can submit another online form–this time with a $25 fee–to give my LLC the pseudonym “Shuffle Buddy”. (I just did this and it is currently pending review.) That way, I can write the name “Shuffle Buddy” on paperwork I send to schools, I can get a checkbook with physical Shuffle Buddy checks, etc. The same LLC can have multiple different “doing business as” names, so I can use it for other side businesses in the future. In Michigan, the DBA name expires after 5 years.
5. I will have to submit an “annual statement” form to the government every year in case there are updates to the company. Surprisingly, this is pretty much the only ongoing paperwork aside from filing my personal taxes. The government will send the form to me and I have lots of time to respond once I get it. There is a yearly $25 processing fee for submitting this form.
6. The business does not have to file its own taxes separately. An LLC can use “pass-through taxation”, which means the business revenue just becomes a box on a form on my own personal taxes. It’s nice that it’s not more complicated.
7. LLCs have “members”. Mine is single-member. The word “member” comes up a lot when you look for information about LLCs online. The members are the owners of the company, basically. My life is simple because I am one person, so I just created a single-member LLC. If you had employees, they would NOT be members.
8. There are silly options that you should probably include in your “articles of organization”. Every LLC has “articles of organization”, apparently, which are basically a legal statement declaring that you are creating an LLC. These were created for me while registering using the form I mentioned in #2. The form included two checkboxes that said, essentially, “do you want to add these statements to your articles of organization?” The first one just said that members of the LLC have limited liability. The second one said that members can’t sue each other. It turns out that the first one is completely redundant but you should include it anyway because it can’t hurt to cover your butt. The second one could be helpful if you had multiple members, and you might as well include it for a single-member LLC in case you grow and need it later. These felt like a funny historical accident, mostly, and it was a weird blip in the process, but I checked the boxes and moved on.
9. Applying for an Employer Identification Number (EIN) is easy, free, and instant. I don’t have empoyees so I wasn’t strictly required to get an EIN, but it allows me to use a new number in place of my personal SSN which is definitely a safer option. I couldn’t believe how easy it was to fill out the form. The form also contained lots of useful information during the process, including letting me know that for my specific business (single-member LLC that is not a farm and does not “report income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in REMICs”) I should use Form 1040 Schedule C to report the LLC revenue on my personal taxes.

Next Step: Sales Tax

Next up, I need to figure out sales tax. My current understanding is that you need to collect sales tax and then send money to every different state in which you collected it. That seems complicated, so I need to figure it out.

So far I’ve been pleasantly surprised by the user-friendliness of this process. (My expectations were low.) Hopefully it continues to be okay.