How to Start an LLC: Step-by-Step Guide

Forming an LLC takes 7 steps: choose your state, name your business, appoint a registered agent, file your Articles of Organization, create an operating agreement, get an Employer Identification Number (EIN), and register for any required state licenses. Most people can complete the process in a few days to a few weeks, depending on their state's processing time.

To form an LLC, you need a business name that meets your state's requirements, a registered agent with a physical address in your state, and a completed Articles of Organization form filed with the secretary of state. You'll also need to pay the state filing fee, which ranges from roughly $40 to $500 depending on the state.

Beyond the formation documents, most LLCs also need an EIN from the IRS and an operating agreement — even if your state doesn't require the latter. These two items are what make your LLC functional, not just registered.

The good news: none of this requires a lawyer. The process is administrative, and the steps are the same whether you're forming a single-member LLC or one with multiple owners.

For most business owners, the right formation state is the state where you live and run your business. Forming in your home state keeps things simple — you avoid the foreign qualification fees and extra paperwork that come with registering in one state and doing business in another.

LLCs are formed under the laws of a specific state, and that state governs your LLC's internal structure and requirements. If you form in Delaware or Wyoming but operate in California, you'll likely need to register as a foreign LLC in California anyway — which means paying fees in both states.

The exception is if you have a specific legal or tax reason to form in another state. A tax professional or legal professional can help you figure out whether that applies to your situation.

Your LLC name must be unique within your state and include a designator like "LLC," "L.L.C.," or "Limited Liability Company." Most states also prohibit names that imply a government affiliation or use restricted words like "bank" or "insurance" without special approval.

Before you file, check your state's business name database to confirm the name is available. Many secretary of state websites offer a free name search tool. If you want to reserve the name before you're ready to file, most states allow a name reservation for a small fee.

Your LLC name doesn't have to be your public-facing brand name. If you plan to do business under a different name, you can file a DBA (doing business as) after formation.

Every LLC is required to have a registered agent — a person or business designated to receive legal documents, tax notices, and official state correspondence on behalf of your LLC. The registered agent must have a physical street address in the state where your LLC is formed and must be available during normal business hours.

You can serve as your own registered agent if you have a physical address in the state and can reliably be there during business hours. Many business owners use a registered agent service instead, which keeps their personal address off public records and ensures nothing gets missed.

Missing a legal notice because your registered agent wasn't available is the kind of problem that's hard to fix after the fact. It's worth getting this right from the start.

The Articles of Organization is the primary formation document for an LLC. You file it with your state's secretary of state (or equivalent agency), pay the state filing fee, and once approved, your LLC legally exists. The document typically includes your LLC's name, principal address, registered agent, and management structure.

Filing fees range from roughly $40 to $500 depending on the state. Most states let you file online, and processing times vary — some states approve filings in a few days, others take several weeks. Many states offer expedited processing for an additional fee.

Once your Articles of Organization are approved, save the stamped copy. You'll need it to open a business bank account and for other official purposes.

An operating agreement is an internal document that defines how your LLC is owned and run. It covers member ownership percentages, voting rights, how profits and losses are divided, and what happens if a member leaves. You don't file it with the state — you keep it with your business records.

Not every state requires an operating agreement, but having one matters regardless. Without it, your LLC falls back on your state's default rules, which may not reflect what you and your co-owners actually agreed to. For single-member LLCs, an operating agreement also reinforces that your business is a separate legal entity.

Multi-member LLCs especially benefit from a clear operating agreement. Disputes between members are much easier to resolve when the rules are written down before a disagreement happens.

An Employer Identification Number (EIN) is a 9-digit number the IRS uses to identify your business for tax purposes. You need one to open a business bank account, hire employees, and file certain tax returns. Applying is free and takes about 10 minutes at irs.gov/ein — the IRS issues your EIN immediately upon online approval.

Single-member LLCs without employees can technically use the owner's Social Security Number instead. But an EIN keeps your personal number off business documents and is required the moment you bring on any employees or open most business bank accounts.

The IRS online EIN application is available Monday through Friday, 7 AM – 10 PM ET. If you apply by fax, expect about 4 business days for processing.

After your LLC is formed, check whether your state requires you to register for state taxes — things like sales tax, employer withholding, or a state business tax account. Requirements vary by state and by the type of business you run. Your state's department of revenue website is the right place to start.

Beyond taxes, many businesses need one or more licenses or permits to operate. These can come from the state, county, or city level depending on your industry and location. The SBA's business license and permit tool at sba.gov is a useful starting point for figuring out what applies to you.

Formation gets your LLC on the books. Staying in good standing means keeping up with annual reports, state fees, and any ongoing license renewals — so build those into your calendar from day one.

The steps above get your LLC formed. These tips help you avoid the mistakes that come up most often after formation.

Open a dedicated business bank account as soon as your LLC is approved. Mixing personal and business finances is one of the fastest ways to undermine the liability protection an LLC provides — if a court decides your business and personal finances aren't really separate, your personal assets are fair game.

Keep your registered agent information current. If your registered agent changes address or you switch providers, update the information with your state right away. A missed legal notice because of a stale address can put your LLC in a difficult position.

Track your annual report deadlines. Most states require LLCs to file an annual report and pay a renewal fee to stay in good standing. Missing the deadline can result in late fees or, in some states, administrative dissolution of your LLC. Set a calendar reminder well before the due date.

Talk to a tax professional before your first tax filing. LLCs have flexible tax treatment — single-member LLCs are taxed as sole proprietorships by default, multi-member LLCs as partnerships, and you can elect S corporation or C corporation status if it makes sense for your situation. A tax professional can help you figure out which structure saves you the most.