Congrats! You are an LLC. That’s a huge accomplishment for your creative business.

You should take some time to celebrate this big win for your business.

But then, you’ll probably start to wonder, “What’s needed to keep my LLC legit?”

Sadly, your work isn’t done.

In this post, I’m going to break down the seven ongoing LLC tasks you should tackle next to keep your LLC fence strong.

Why you should do these 7 ongoing LLC tasks

Failing to do each of the seven ongoing LLC tasks we are going to discuss today is the difference between having an LLC and having an expensive piece of paper.

When you are a sole proprietorship or a partnership, if anything goes wrong in your business, your personal assets are affected.

But once you start to accumulate personal assets, you don’t want to risk those if something goes wrong in your business. And so by creating an LLC, those assets become off-limits. LLCs effectively put a fence between your personal life and your business life.

But if you don’t do these steps right (or fail to keep your LLC legit after it’s created), then you weaken your fence. And make it easy for lawyers to knock it down when anything goes wrong. This means you might have an LLC on paper, but it carries no legal weight. And when that happens, your personal assets are back on the table.

Task #1. Create your LLC’s central file

Your first task is to create your LLC’s central file.

An LLC doesn’t have the detailed record-keeping requirements that a corporation does, but it does have some requirements. And keeping a central file of all of the important LLC documents is one of them.

By law, the following documents should be in that file:

• Federal Employee Identification Number: The IRS provides you with a letter that contains your EIN. Once you have an EIN, this letter should be stored in your files.
• Permits and Licenses: A copy of any permits and licenses you are required to get, but aren’t required to be displayed.
• Property List: A list of business assets, including equipment, inventory, and supplies.
• Tax Returns: You should keep the past six years of tax returns for all the owners personally and the business itself.
• Business Books: The full books of your business should be kept for at least four years.        
• Articles of Organization: This document can go by a few names: Certificate of Organization or Certificate of Formation. This is the document you filed with your state to become an LLC.
• Operating Agreement: A copy of the original signed version of the LLC’s Operating Agreement. (Didn’t create an Operating Agreement for your business? You can get my template here.)
• Members List: A list of all the LLC members. This list should also contain their address, their contributions to the LLC, their percentage ownership, and their share of profits and losses.
• Members Meetings Minutes + Consents: While the requirements for an LLC are less stringent than a corporation, an LLC should still document major business decisions. This can be done via minutes from a meeting or through written consents.

Task #2. Keep your money and the LLC’s money separate

One of the most common ways LLC owners poke holes in their fence is by failing to keep an arm’s length between the LLC’s money and the business owner’s personal finances.

When you create an LLC, you create, in effect, a legal person. You and your business are no longer one and the same. For your LLC to have any money, it must have accounts in the LLC’s name.

If you are setting aside money to pay sales tax, then that is the LLC’s responsibility. So, sales tax money needs to stay in the LLC’s name and needs to be in an LLC bank account.

If you are paying yourself, you need to pay into your bank account and then pay your bills out of your bank account. You can’t pay your personal bills out of your LLC’s bank account.

This means to keep your LLC fence strong, you cannot:

• “borrow” money from the LLC without documenting it
• pay yourself willy-nilly
• pay personal bills from the LLC account
• pay LLC bills from your personal account

If you fail to separate your finances, then your LLC fence will fail.

Get a business banking account

Back in the old days, a business banking account was going to cost you money. These days, it doesn’t. Today, there are lots of free online business checking accounts that have no minimums and have very low fees. (NerdWallet is a great resource to find these, and my preferred bank is Novo.)

Again, since the LLC only has money if it’s in the LLC’s name, you’ll be required to get a business banking account, not a personal one.

The LLC must have enough money to operate

Now that you understand the importance of the LLC having money in its own name, we turn to the other half of the equation: making sure the LLC starts with enough money to operate and you always keep enough money in the LLC’s accounts to pay its upcoming expenses.

The first thing you need to do is to make sure you initially invest enough in your LLC.

You do this by depositing enough in the LLC’s bank account to cover three to six months of LLC business expenses.

You get paid from the business profits

The second thing you need to do is make sure you’re only paying yourself from the profits of the business.

You cannot take any money out of the LLC bank account that’s necessary for upcoming LLC expenses.

And unless you elect S-corp taxation, what you pay yourself is not a business expense. So you can only pay yourself if the LLC bank account has the money necessary to pay the next 30 days of expenses. (But for the strongest protection, you should keep 3-6 months of expenses in this account at all times.)

Task #3. Get all your required permits and licenses

The fact of the matter is that pretty much every business is required to have at least one permit or license from their City or County.

It doesn’t matter if your business is online-only.

It doesn’t matter if clients or customers never visit your home.

It’s required just for the privilege of owning your own business.

So your next step is to comply with all the permits, taxes, and other regulatory requirements that most businesses need to operate.

Pretty much every LLC is going to need a business license. And that business license will be for the city or county where the physical location of your business is.

You also might need:

• DBA
• Home occupancy permit

• Fire permit
• Seller’s permit/sales tax certificate

One easy way to find out what permits and licenses you might need is to pick up the phone and call your Chamber of Commerce or City Hall and say,  “I just created an LLC and my LLC does [fill in the blank], what permits and licenses do I need?”

Don’t want to do this research? You can hire me to do it for you.

Task #4. File your Beneficial Ownership Information Report

In case you haven’t heard, in 2021, Congress passed the Corporate Transparency Act. The public policy behind this law is to prevent criminals from using anonymous shell businesses for illegal activities.

Since LLCs and corporations are created on a state-by-state basis, there is no federal database of who owns these businesses. That’s why Congress passed this law: to create a federal database of who owns an LLC or corporation, so if these businesses participate in financial crimes, the government knows who is responsible.

The Financial Crimes Enforcement Network (FinCEN) enforces this law. They are responsible for protecting our financial networks from money laundering, fraud, terrorist financing, or corruption.

Simply put, all LLCs must comply with this law.

If your LLC is created on or after January 1, 2025, then you have 30 days from your LLC being approved by your state to file this form.

And if you fail to file this report within 30 days, it can lead to stiff civil and criminal fines and penalties. Including:

• For each day you haven’t filed a civil penalty of $500 per day
• Up to a $10,000 criminal penalty and/or two years in prison

Needless to say, spending less than 10 minutes to avoid these penalties is a wise use of your time.

Because filing this form involves multiple steps, here’s a detailed step-by-step guide on how to file your Beneficial Ownership Information report.

Task #5. Show off your LLC status

Now that you have done all the hard work to build a fence between your personal life and your business life, it’s time to show that LLC status off!

And you do this by making sure that everyone who interacts with your business has the chance to learn that you are an LLC.

This means you’ll want to update your:

• website like your footer, contact page, terms of service, or e-commerce receipts
• customer communications like your invoices, e-commerce receipts, letterhead, or email signature
• marketing materials like your business cards, hang tags, packaging, or inserts
• contracts so that the contract is with the LLC and signed by you on behalf of the LLC
• signage like your business name in your studio directory

The one caveat is that I don’t want you to waste money. So if you just ordered business cards, hang tags, or other printed material and have significant stock left, use up what you have, and when you re-order, make sure the LLC name is on there.

Task #6. Document major business decisions

As I said at the start, an LLC doesn’t have the detailed record-keeping requirements that a corporation does, but it does have some.

Documenting major business decisions is another critical piece of evidence you’ll present if you need to solidify your fence and prove that it shouldn’t be bulldozed.

Luckily, you don’t have to do anything complicated to document them. (And you don’t need to justify your decisions, just say that you made them.)

The general rule of thumb I give clients is that you need to document decisions that:

• cost more than your average purchase (e.g., you should document buying a computer or piece of equipment, but there’s no need to document buying printer paper)
• open or close revenue streams
• result in significant ongoing financial obligations (hiring an independent contractor, new employees, leasing space, getting a loan)

And because I have a hard time remembering all the things I do in my business, I write these every quarter. (This is a recurring Asana task, so I don’t forget!)

You document these decisions by writing either Unanimous Written Consents or having a meeting and documenting that meeting using minutes.

Task #7. Keeping your LLC status active with your state

The easiest way for your LLC status to disappear is by failing to keep your LLC status active with your state. That’s because if you fail to renew your LLC or pay the required taxes, the state can cancel your LLC automatically.

File your LLC renewal forms

Most states require that you renew your LLC status either annually or every other year. In some states, you are required to file a form, but there is no filing fee. While in others (like Massachusetts), there is a significant renewal fee of several hundred dollars that must be paid along with filing your form.

Pay your LLC Franchise Tax

Many states also have an LLC Franchise Tax. Like the LLC renewal, if you need to pay this, and how much you’ll have to pay varies widely from state to state. In some states, it doesn’t exist, but in California, it’s a minimum of $800. (Even if your LLC loses money!) This isn’t something that should be skipped because not paying can result in fines, penalties, or even cancellation of your LLC.

Neither of these should you skip or ignore because not doing them will result in fines, penalties, or even automatic cancellation of your LLC.

Wrapping up your ongoing LLC tasks

If you think your legal work is done, once you get your LLC paperwork back from your state, then I’m sorry to be the bearer of bad news, but you aren’t.

What you do after creating your LLC is just as important as what you do to create your LLC. Because if you don’t, you’ll end up with an expensive piece of paper. And you won’t have your LLC to protect your personal assets when you need it most.

So instead of celebrating and forgetting about your LLC, spend some time doing each of these seven ongoing LLC tasks. Because doing them will keep your LLC legit for the life of your business.