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The 7 Essential Documents for Forming Your Handmade Business LLC

Updated: Apr 26, 2023

Embarking on the journey of starting your own handmade business is an exciting step, and forming a Limited Liability Company (LLC) is a strategic move to protect your personal assets while providing a professional framework for your venture. In this blog, we will discuss the seven essential documents you need to form your handmade business LLC.

1. Articles of Organization:

The Articles of Organization is the cornerstone document for forming your LLC. This document outlines essential information about your company, such as the business name, purpose, and structure. It also includes the names of the initial members or managers and the registered agent responsible for receiving legal documents on behalf of the LLC. You will need to file the Articles of Organization with your state's Secretary of State office, along with the required filing fee.

2. Operating Agreement:

An Operating Agreement is a critical document that establishes the rules and regulations for running your handmade business LLC. It outlines the roles and responsibilities of the members or managers, how profits and losses are distributed, and the procedure for making key decisions. Although not required in every state, an Operating Agreement is highly recommended to ensure a smooth operation and to prevent potential disputes among members. Obtain easy to create Operating agreements as well as other business and personal documents at

3. Employer Identification Number (EIN):

An EIN is a unique identification number assigned by the IRS for your business. This number is required for tax reporting purposes, opening a business bank account, and hiring employees. You can apply for an EIN online through the IRS website at no cost.

4. Sales Tax Permit:

If your handmade business involves selling tangible goods, you'll need to register for a sales tax permit in your state. This document allows you to collect sales tax from customers and remit it to the state's tax department. The registration process and requirements vary by state, so be sure to consult your state's tax agency for specific information.

5. Business Licenses and Permits:

Depending on your location and the nature of your handmade business, you may need additional business licenses or permits to operate legally. These may include a general business license, zoning permit, or health and safety permit. Check with your local city or county government office to determine which licenses and permits are required for your business.

6. Insurance Policies:

Protecting your handmade business with the appropriate insurance policies is crucial. General liability insurance can safeguard your business against claims of bodily injury, property damage, and personal injury. Additionally, consider other insurance policies tailored to your specific needs, such as product liability insurance, business property insurance, and workers' compensation insurance if you have employees.


7. Record-Keeping System:

Maintaining accurate records is essential for any business, and your handmade business LLC is no exception. Implementing a reliable record-keeping system will ensure that you can track your expenses, revenue, and inventory accuracy. These records are crucial for filing your taxes and can provide valuable insights into your business performance.

Forming your handmade business LLC requires careful preparation and attention to detail. By gathering and completing these seven essential documents, you'll be well on your way to a successful and legally compliant business venture. Remember, it's always a good idea to consult with legal and financial professionals to ensure that your specific needs are addressed and to stay updated on any changes to the laws and regulations that govern your business.

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