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

Step 1: Choose a Name That Meets Your State's Rules

Every state requires an LLC's name to include a designator, such as "LLC" or "Limited Liability Company," and to be distinguishable from other registered businesses in that state. Search your state's business entity database before you commit to a name, since a name that's too similar to an existing one is the most common reason a filing gets rejected. If you plan to build a brand around the name, it's also worth a quick search of the USPTO's trademark database to check whether it's already trademarked by another company, separate from your state's own name-availability check.

Step 2: Appoint a Registered Agent

Every state requires an LLC to maintain a registered agent, an individual or company with a physical street address in that state, who accepts legal notices and official state mail on the LLC's behalf. You can serve as your own registered agent if you have a qualifying address in the state, at no extra cost, or you can pay an individual or a registered agent service to do it, commonly bundled into an annual fee. This requirement continues for as long as the LLC exists, not just at formation.

Step 3: File the Articles of Organization

File the Articles of Organization, sometimes called a Certificate of Organization, with your state's filing agency, usually the Secretary of State. This document typically asks for your LLC's name, registered agent, principal address, and sometimes its management structure. The filing fee varies significantly by state, from $35 in Montana to $500 in Massachusetts, according to each state's filing agency. Some states offer online filing with same-day or next-day confirmation; others take longer or offer an expedited option for an extra fee.

Step 4: Get an EIN From the IRS

Once your state approves your LLC, apply for an Employer Identification Number from the IRS using Form SS-4, most easily through the IRS's free online application, which typically issues the number immediately. An EIN identifies your LLC for federal tax filings, and most banks require one to open a business account even if your LLC isn't otherwise required to have one. There's no cost at any step; the IRS states plainly that an EIN is free.

Step 5: Write an Operating Agreement

An operating agreement sets out how the LLC is owned, managed, and how profits and losses are allocated among members. Not every state requires one by law, but having a written agreement, even for a single-member LLC, helps establish the LLC as a genuine, separate entity, which matters if your liability protection is ever challenged, and it settles questions in advance that are much harder to resolve after a disagreement arises between multiple members.

Step 6: Open a Business Bank Account

Open a dedicated bank account in your LLC's name once you have your EIN and formation documents. Keeping business funds separate from personal funds isn't just good bookkeeping, it's one of the practical things courts look at when deciding whether an LLC's liability protection should actually apply, since commingled finances are a common reason a court disregards the LLC structure.

Step 7: Register for State Taxes and Local Licenses

Depending on what your business does, you may need to register with your state's Department of Revenue for sales tax, register as an employer if you'll hire staff, and obtain any local business license or industry-specific permit your city or county requires. The SBA notes that tax obligations differ at the state and local level, so check your specific state and locality rather than assuming a single national rule applies.

Step 8: Plan for Ongoing Compliance

Most states require a recurring annual report, biennial statement, or franchise tax filing to keep your LLC in good standing, with fees from $0 to $500 a year. Mark this deadline on your calendar as soon as your LLC is formed, since missing it is one of the most common ways a new LLC runs into state compliance problems. As of a 2026 federal rule change, U.S.-formed companies, including LLCs, are exempt from the federal beneficial ownership information reporting that previously applied to many small businesses, though this exemption doesn't affect any of your state-level filing obligations.

Order Matters More Than It Seems

Applying for an EIN before your state approves your LLC, or trying to open a bank account before you have an EIN, are common sequencing mistakes that cost time rather than money. Follow the steps in order, since several of them depend on the one before being finished first.

A Registered Agent Decision Outlasts the Filing Itself

Choosing to act as your own registered agent keeps your home address on the public record in many states and requires you to be reliably available at that address during business hours. Weigh that against a registered agent service's cost before deciding, since this is an ongoing commitment, not a one-time choice.

Don't Skip the Operating Agreement Because You're the Only Owner

A single-member LLC is the easiest to assume doesn't need one, but a written operating agreement still helps document that the LLC is a real, separate entity, and it's often requested by banks or needed if you ever bring on a second member or seek financing.

Budget for Recurring Costs, Not Just the Filing Fee

The one-time state filing fee is often the smallest cost over the life of the LLC. A registered agent, annual report fees, and any state franchise tax recur every year, so factor those into your decision rather than focusing only on the upfront cost.

This Is General Information, Not Legal or Tax Advice

Exact requirements, forms, and fees differ by state and change periodically. Confirm current requirements with your state's filing agency, and talk to a tax professional about how your LLC should be taxed before you file.