Finance and insurance · LLC guide · updated
How to start an LLC for a bookkeeping business
Bookkeepers reconcile accounts, run payroll and sometimes pay bills from client accounts. Errors can lead to penalties for clients, and access to bank accounts creates risk. An LLC with clear engagement letters keeps those claims with the company.
Our registered agent is optional: $74.25 a year, the same at renewal. Questions first? Ray or Vinny picks up at (954) 470-8356.
- EIN
- Engagement letters
- E&O insurance
- Data security plan
Bookkeeping Business businesses in the U.S.
Source: U.S. Census Bureau, County Business Patterns 2022 (NAICS 541219) and U.S. Census Bureau, Nonemployer Statistics 2022 (NAICS 541219), the latest U.S. totals.
Why bookkeeping business owners form an LLC
Errors and missed deadlines
Late payroll deposits or misposted entries cost clients penalties.
Access to client funds
Bill pay and payroll access bring fraud and error risk.
Client data
You hold bank logins and financial records.
An LLC keeps the company's debts and claims away from your personal assets when you run it as its own business: its own bank account, contracts signed in its name, and no mixing of money. It does not cover your own negligence, and lenders often ask for a personal guarantee. Insurance comes first.
Licenses and registrations for a bookkeeping business
Federal items link to the agency's own page. State and local rules vary, so pick your state at the top for your state's business portal. Tick items off as you go; the list remembers your progress on this device.
- We do thisForm the LLC and get its EINAlmost every registration above asks for the company's legal name and EIN, so this comes first. We file the LLC with your state for $123.75 plus the state fee, and can get the EIN for $41.25; the IRS also issues it free online.
Insurance and taxes to plan for
Insurance
- Professional liability
Covers errors that cost clients money.
- Cyber liability
Covers breaches of client data.
- Fidelity bond
Covers employee theft from clients.
Taxes
- Recurring revenue
Monthly retainers are booked as service is delivered.
- Software subscriptions
Accounting software costs are deductible.
State what you do, what you do not do (such as tax advice), and a cap on liability, signed by the LLC and each client.
Forming the LLC itself: 7 steps in every state
- 1. Check the name
- 2. Name a registered agent
- 3. File with the state
- 4. Sign an operating agreement
- 5. Get an EIN
- 6. Open a bank account
- 7. Keep it in good standing
The filing office, fee and yearly report change by state. Open your state's step-by-step guide.
What it costs to form a bookkeeping business LLC
| Cost | File it yourself | With Vermilion Vitez |
|---|---|---|
| State filing fee (paid to the state) | $35 to $520 | $35 to $520 |
| Filing service, operating agreement included | $0 | $123.75 |
| EIN from the IRS | $0 | $0 yourself, or $41.25 if we get it |
| Registered agent, per year (optional) | $0 if you serve yourself | $74.25 |
State fees as charged at our checkout. Industry licenses, permits, bonds and insurance above are separate and set by each agency. Checkout shows the card processing fee before you pay.
Frequently asked questions
Do bookkeepers need a license?
No federal or general state license, but you cannot call yourself a CPA or do audits without one.
Should a bookkeeper form an LLC?
Many do, to sign engagement letters and keep error claims with the company.
Can I do payroll for clients?
Yes; you may need IRS reporting agent authorization to file payroll returns.
What insurance should a bookkeeper have?
Professional liability, cyber liability and a fidelity bond if you handle funds.
How much does it cost to form an LLC for a bookkeeping business?
Your state's filing fee ($35 to $520 depending on the state) plus $123.75 if we file it, with the operating agreement included. Industry licenses, bonds and insurance are extra and set by each agency.
Is this page legal or tax advice for my bookkeeping business?
No. It summarizes public rules in general terms, with links to the agencies that set them. For your situation, talk to a licensed attorney or CPA, or book a free call with us.
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Ready when you are
Have us file your Bookkeeping Business LLC
$123.75 plus your state's filing fee, with the operating agreement included. Checkout shows the full total, card processing fee and all, before you pay.
Rather talk first? Call Ray or Vinny at (954) 470-8356.