Forming an LLC requires filing a document called Articles of Organization with your state’s Secretary of State office, paying a filing fee (typically between $50 and $300), and completing a few additional registration steps. The entire process can take as little as a few days in some states, though most people should plan for one to two weeks from start to finish.
Choose a Name for Your LLC
Your LLC name needs to be distinguishable from any other business entity already registered in your state. Most states let you search existing business names through the Secretary of State’s website for free. Your name will also need to include a designator like “LLC” or “Limited Liability Company” at the end.
If you’ve found the perfect name but aren’t ready to file yet, many states let you reserve a name for 60 to 120 days for a small fee. This prevents anyone else from registering it while you get your paperwork together.
Appoint a Registered Agent
Every state requires your LLC to have a registered agent before you file. A registered agent is a person or company that accepts legal documents and official government notices on your LLC’s behalf. The agent must have a physical address in the state where you’re forming the LLC; a P.O. box won’t work.
You can serve as your own registered agent in most states, which costs nothing. The trade-off is that your personal address becomes part of the public record, and you need to be available at that address during business hours. Commercial registered agent services charge roughly $50 to $300 per year and handle everything for you, which many business owners prefer for privacy and convenience.
File Your Articles of Organization
The Articles of Organization is the official document that creates your LLC. Despite the formal name, it’s a straightforward form that most states let you file online. You’ll typically need to provide your business name, your business address, the names of the LLC’s members (owners), and your registered agent’s name and address.
Filing fees vary widely by state. On the lower end, you’ll pay between $50 and $100. Many states fall in a mid-range of $125 to $175. Some states charge $250 or more, and a few exceed $400 when publication requirements or additional fees are factored in. In most cases, your total cost to register will be under $300. Many Secretary of State offices offer expedited processing for an additional fee if you need your LLC formed quickly.
Create an Operating Agreement
An operating agreement is an internal document that spells out how your LLC will be run. It covers ownership percentages, how profits and losses are divided, voting rights, each member’s duties and powers, how meetings are held, and what happens if a member wants to sell their interest or passes away.
Many states don’t legally require an operating agreement, but you should create one regardless. Without it, your LLC defaults to your state’s generic LLC rules, which may not reflect what you and your co-owners actually agreed to. Even single-member LLCs benefit from an operating agreement because it reinforces the legal separation between you and your business. If that separation ever gets challenged in court, a written operating agreement is one of the strongest pieces of evidence that your LLC operates as a legitimate, independent entity.
Get an EIN From the IRS
An Employer Identification Number (EIN) is a nine-digit number the IRS assigns to your business for tax purposes. Think of it as a Social Security number for your LLC. You’ll need one to open a business bank account, hire employees, and file business tax returns.
Apply directly through the IRS website at no cost. The online application takes about 10 to 15 minutes, and you’ll receive your EIN immediately when you finish. One important note: the IRS recommends forming your LLC with your state before applying for an EIN. If you apply before your state filing is complete, your application may be delayed.
The online tool is available Monday through Friday from 6:00 a.m. to 1:00 a.m. Eastern, Saturdays until 9:00 p.m., and Sundays from 6:00 p.m. to midnight. You can’t save a partially completed application, so have your information ready before you start. You’ll need the Social Security number or individual taxpayer ID number of the person who controls the LLC. Be wary of third-party websites that charge a fee for EIN applications. The IRS never charges for an EIN.
Open a Business Bank Account
Once you have your Articles of Organization and your EIN, open a dedicated business bank account. Keeping your personal and business finances separate is one of the main reasons people form an LLC in the first place. If you mix personal and business funds in the same account, a court could decide your LLC doesn’t truly exist as a separate entity, which would expose your personal assets to business debts and lawsuits.
Most banks will ask for a copy of your Articles of Organization, your EIN confirmation letter, and a government-issued ID. Some also request a copy of your operating agreement.
Handle State Tax and License Requirements
Registering your LLC with the Secretary of State doesn’t automatically register you for state taxes. Most states require you to file additional paperwork with your state tax board or franchise tax board within 30 to 90 days after formation. Depending on your business type and location, you may also need a general business license, a sales tax permit, or industry-specific permits.
If your LLC will operate in states beyond the one where you formed it, you’ll likely need to file for foreign qualification in each additional state. This involves submitting a Certificate of Authority and paying a separate filing fee. “Foreign” in this context just means out-of-state, not international.
Keep Your LLC in Good Standing
Forming your LLC is just the first step. Most states require LLCs to file an annual or biennial report to stay in good standing. These reports update the state on basic information like your principal address, registered agent, and members or managers. Filing fees for annual reports range from $10 to $300 depending on your state.
Missing your annual report deadline can result in late fees, and some states will administratively dissolve your LLC if the report goes unfiled long enough. That means your liability protection disappears until you reinstate, and reinstatement typically costs more than the original report would have. Set a calendar reminder for your state’s filing deadline so you don’t let it slip.
You’ll also need to maintain a registered agent at all times. If your agent resigns or their address changes and you don’t update the state, your LLC can fall out of compliance. Keep your registered agent information current, file your reports on time, pay any applicable state franchise taxes, and your LLC will remain in good standing year after year.