How to Start an LLC: The 6 Real Steps
Forming an LLC is a state filing plus some housekeeping, and every step below is doable yourself in an afternoon in most states. Formation services repackage these same steps with convenience and upsells; knowing the real process is how you decide which parts, if any, are worth paying for.
-
Check the name Free
Every state runs a free business name search on its Secretary of State site. The name must be distinguishable from existing entities and include an LLC designator ("LLC" or "Limited Liability Company"). Check the trademark database and domain availability while you are at it; the state only checks its own registry.
-
Choose a registered agent Free to $249/yr
Every LLC must continuously maintain an agent with a street address in the state to receive legal papers. You can be your own in most states for free; the paid services earn their fee mainly on privacy, since the agent's name and address become public record. The rules, tradeoffs, and provider prices are in our registered agent guide.
-
File the articles of organization $35 to $500, by state
This is the filing that creates the company: a short form naming the LLC, its address, its agent, and usually its organizer. Most states accept it online with approval in minutes to days. This fee is mandatory no matter who files; our state cost table has every state's figure from the official schedules, including the recurring fees that follow.
-
Get the EIN, free, from the IRS Free
The federal tax ID takes minutes on irs.gov and costs nothing. Services charge up to $99 to fill in the same form. Banks generally want an EIN to open a business account, and it keeps your SSN off vendor paperwork.
-
Adopt an operating agreement Free to write
The internal contract covering ownership, management, and what happens when someone leaves. It is not filed with the state, and most states do not require one, but banks ask for it and single-member LLCs benefit too: it is evidence the company is a real, separate thing. Multi-member LLCs should treat this as the step worth real attention, possibly with a lawyer.
-
Open the bank account and calendar the deadlines Free and priceless
A dedicated account is not optional in practice: commingling business and personal money is the classic way courts justify ignoring an LLC when it matters most. Then put two dates on the calendar: the state's annual or biennial report deadline, and any franchise tax date. Missing them stacks late fees and eventually gets the company administratively dissolved.
Where services fit, honestly
A $0 formation tier does step 3's paperwork; the state fee still applies, and steps 4 through 6 are typically upsells or left to you. Northwest bundles the operating agreement and first-year agent at $39; ZenBusiness and LegalZoom sell most extras separately. If you value one throat to choke and automated compliance reminders, that is a legitimate purchase; just buy it knowing the EIN is free and the state fee is identical either way. Our comparison scores exactly this.
The two decisions people get wrong
- Forming in the wrong state. Home state, almost always. Wyoming or Delaware while operating elsewhere means foreign registration in your real state, two sets of fees, and two agents. The math is on the cost table.
- Confusing the LLC with a tax strategy. By default nothing changes on your taxes; profit still lands on your personal return with self-employment tax. The election that can change that at higher profits has its own tradeoffs, covered in LLC vs S corp. And if you are still deciding whether you need an entity at all, start with LLC vs sole proprietorship.
State-by-state guides
The steps above are universal; the fees, quirks, and deadlines are not. We keep dedicated guides for the ten biggest formation states, each with the official figures and the local traps (New York's publication requirement, California's $800 tax, Arizona's county rule, Pennsylvania's professional fees):
Texas · California · Florida · New York · Georgia · North Carolina · Ohio · Pennsylvania · Illinois · Arizona
Comparing formation services?
Every service pays the same state fees. We compare what they charge on top, and what the $0 tiers actually include.
See the comparisonFrequently asked questions
How long does the whole process take?
The filing is the only variable: minutes to a few days online in many states, weeks by paper in slow ones, with paid expedite options set by the state itself. The rest (EIN, agreement, bank account) is a day of your own effort.
Do I need a business license too?
Separately from the LLC, maybe. Licensing depends on the activity and locality, not the entity: some states have general business licenses (Nevada's is bundled into LLC fees), and cities and counties license specific trades. The LLC filing does not grant permission to operate a regulated business.
Can I convert my existing sole proprietorship?
You form the LLC, then move the business into it: new EIN when required, retitle contracts and accounts, and update licenses. There is no single conversion filing for a sole proprietorship because it was never a registered entity to begin with.
What ongoing paperwork does an LLC have?
Usually just the state's annual or biennial report and any franchise tax, plus normal tax filings. A few states are heavier (California's $800 franchise tax; New York's one-time publication requirement). It is all on the state table, with due dates.
Sources
- IRS: Employer Identification Number (free application)
- IRS: Limited Liability Company (LLC) tax classification
- Texas SOS: Registered agent FAQs
- SBA: Choose a business structure
This page is general educational information, not legal or tax advice. State fees and requirements change; verify with your state's filing office. Consult an attorney or tax professional about your situation.