How to Start a Business in the United States

There's No Single Federal Business Registration

Unlike some countries, the United States has no single national business registry. Businesses are formed at the state level: an LLC files Articles of Organization and a corporation files Articles of Incorporation with a specific state's Secretary of State or equivalent filing agency. This is why the first real decision isn't just what structure to use, but which state to form in, usually the state where the business actually operates, since forming in a different state and then operating in your home state typically means registering in both.

Choose a Business Structure

A sole proprietorship needs no state formation filing if operating under the owner's own legal name, but gives no liability protection. An LLC is a separate legal entity that shields personal assets in most circumstances, with state filing fees ranging from $35 in Montana to $500 in Massachusetts. A corporation suits a business planning to raise outside investment or issue stock, and it can elect S corporation tax status with the IRS if it meets eligibility rules, generally capping ownership at 100 U.S.-based shareholders.

Get a Federal EIN

Once your state approves your formation filing, apply for a free Employer Identification Number directly from the IRS. This is the one step that's genuinely federal and uniform regardless of which state you formed in: the EIN identifies your business for federal tax purposes nationwide, and most banks require one to open a business account even for a sole proprietorship that isn't otherwise required to have one.

Federal Licenses Apply to Only a Few Industries

Most businesses need no federal license at all. Federal licensing is limited to specific activities: alcohol sales, firearms and explosives, aviation, broadcasting, commercial fishing, and a handful of other regulated industries, each overseen by its own federal agency. Everything else, a general business license, industry permits, and sales tax registration, is handled at the state or local level instead.

Ownership by Non-U.S. Citizens

U.S. citizenship or residency isn't required to own an LLC or corporation in the United States; a non-U.S. resident can be a member, manager, or shareholder. That said, actively working in the business from within the U.S. generally requires separate immigration authorization, which is a different legal question from business ownership itself, so a non-citizen owner should confirm both the business formation requirements and their own work authorization status separately.

Federal Reporting That Can Apply Regardless of State

Beyond taxes, certain federally chartered banks and some regulated industries carry their own federal reporting obligations regardless of which state the business is formed in. As of a 2026 rule change, U.S.-formed companies, including LLCs and corporations, are exempt from the federal beneficial ownership information reporting that previously applied broadly to small businesses under the Corporate Transparency Act, though this exemption doesn't affect any state-level filing obligations.

Operating in More Than One State

If your business operates in a state other than the one where it was formed, most states require registering there too as a "foreign" LLC or corporation, which means an added filing fee and maintaining a registered agent in that state as well. This is a common oversight for a business that grows beyond its home state, so track where you actually do business, not just where you filed, as the business expands.

Funding Sources Available Nationwide

The U.S. Small Business Administration backs loan programs available to eligible small businesses in any state, including 7(a) loans up to $5 million and microloans up to $50,000 through nonprofit intermediary lenders, both applied for through a participating lender rather than the SBA directly. These programs supplement, rather than replace, whatever state-specific grants or resources might also be available.

Where to Start

Identify the state where your business will actually operate, confirm that state's specific formation fee and registered agent requirement, and apply for your EIN once the state approves the filing. From there, layer in any federal licenses your specific industry requires and any state or local licenses your location requires, since most of the remaining requirements are set locally rather than nationally.

State Rules Vary More Than Federal Rules Do

Because formation itself happens at the state level, the specific filing fee, annual report requirement, and registered agent rules differ meaningfully by state, while the EIN application and federal tax treatment stay the same no matter where you form. Research your specific state's rules directly rather than assuming a national standard applies to formation.

Forming in a Low-Fee State Doesn't Always Save Money

Forming an LLC in a state with a low filing fee, like Montana, when your business actually operates elsewhere usually still requires registering as a foreign LLC in your home state, adding a second fee. Compare the combined cost, not just the cheaper state's own fee, before deciding where to form.

Non-Citizen Ownership and Work Authorization Are Separate Issues

Owning a U.S. business as a non-citizen doesn't by itself authorize you to work in the United States; those are governed by different sets of rules. Confirm your specific immigration status question with an immigration attorney separately from the business formation process.

Federal Exemptions Can Change

The 2026 beneficial ownership reporting exemption for U.S.-formed companies reflects current federal rules, which can change. Check FinCEN's own guidance periodically rather than assuming a past exemption still applies indefinitely.

This Is Not Legal or Tax Advice

Federal and state requirements interact in ways that depend on your specific structure, industry, and citizenship status. Talk to an attorney or tax professional before finalizing where and how to form, especially if you're a non-U.S. resident or plan to operate in multiple states.