How to form an LLC

To form an LLC, choose the appropriate state, select an acceptable name, appoint an eligible registered agent and submit that state's formation filing with its fee. Then put the company's ownership rules, tax identifiers and operating requirements in place. The state filing creates the entity; it does not finish every task needed to run the business.

The sequence below is a working checklist. The name of the formation document, required information and follow-up duties vary by state. Use the official state directory to reach the responsible office before submitting a filing.

1. Choose the state for the actual business

Start with where the company will work, employ people or maintain a location. If it forms elsewhere, it may still need authority to operate in that state. The SBA's registration guidance explains this foreign-qualification distinction.

For example, a hypothetical shop operating from a fixed location should check that location's requirements before choosing another state for a lower advertised fee. An overseas founder without a U.S. operating location has a different decision to make. Our state-selection guide explains how to compare the choices and recurring costs.

2. Check the company name before ordering extras

Use the state's official business search and naming instructions. Check required entity wording and whether the proposed name can be accepted. Finding an available domain or a similar business in a search engine is not the same as clearing a name with the filing office.

Name availability, a trade name and trademark rights are different questions. Do not assume one search grants exclusive rights across the country. Check whether a reservation is useful and what it costs before buying it; do not add it to every budget as though it were always compulsory.

3. Appoint an eligible registered agent

The agent is the contact for legal documents and official notices. The appointee must meet the applicable state's address, consent and availability rules. A commercial service is one option; a qualified person or organization may be another, depending on those rules.

An agent appointment does not automatically include a general mailbox or prove that the business occupies the agent's office. Read registered-agent address vs. virtual mailbox before copying the same address into every field. Ask a service which documents it accepts and what renews separately.

4. Prepare and submit the formation document

States commonly call the LLC formation document Articles of Organization, but terminology differs. Follow the actual state form rather than a national template. The SBA outline identifies common information such as name, location, ownership or management details and registered-agent information; the state determines exactly what its filing requires.

Before paying, check:

• Exact legal name and entity designation.
• The correct filing for a newly formed LLC rather than an out-of-state registration.
• Registered-agent details and any required consent.
• Mailing, principal-office and other addresses in the fields where requested.
• Management information, organizer details and signatures required by that state.
• The government fee and any optional expedited or service charges.

Keep the submitted copy, receipt and state approval. A provider's order confirmation is not necessarily the state's acceptance of the filing. Avoid treating a processing estimate as a guaranteed approval date.

5. Document ownership and decision-making

An operating agreement describes the company's internal financial and management rules. The SBA explains its role; whether it is mandatory and how it is handled depend on the applicable rules. It is distinct from the filing submitted to create the entity.

For multiple owners, establish how contributions, decision authority, distributions and departures will work. A single owner also needs records consistent with how the company will operate. Downloading a generic document does not establish that it fits every ownership or financing arrangement. Keep the final agreement with the formation records.

6. Determine whether and how to obtain an EIN

An Employer Identification Number is a federal tax identifier. Determine the requirement for the LLC's circumstances and whether a bank or other recipient needs it. Apply after the entity is formed when forming an LLC; the IRS describes this sequence on its EIN page. The IRS application is free, while an optional preparation service may charge its own fee.

Online eligibility depends on the IRS location and identification requirements, not citizenship alone. If the responsible party has no SSN or ITIN, follow the applicable Form SS-4 instructions rather than inventing an identification number. Our EIN guide explains the routes and common mistakes.

7. Check what is needed before starting operations

Formation and an EIN do not grant every license, establish tax registration or guarantee a business bank account. Check industry and local permits, employer requirements if hiring, and relevant state tax registrations. Banks and payment processors apply their own documentation and eligibility checks.

Organize a record set containing formation approval, ownership documentation, EIN assignment if obtained, agent appointment and any licenses or registrations. Confirm who has authority to act for the business rather than assuming everyone with access to a filing account can sign on its behalf.

8. Build the ongoing compliance calendar

Track state reports or entity taxes where applicable, agent renewals, address changes and business-specific tax filings. A state with no ordinary LLC annual report can still have other maintenance and tax requirements.

Foreign-owned U.S. disregarded entities should assess Form 5472 separately; the IRS instructions describe reportable transactions and exceptions. Federal BOI reporting is another separate question. Neither the formation receipt nor one exemption settles every obligation.

What does forming an LLC cost?

Build a budget from the state fee, any required additional registration, paid agent service if selected, licenses and optional professional support. Add renewals separately. A formation package might cover only submission of the initial document. Compare the exact package through our formation-service comparison, after identifying which work you want help with.

Frequently asked questions

Can I form an LLC myself?

You can generally submit the state filing directly. Follow the official instructions and make sure the proposed agent meets the rules. A paid filing package is optional.

Is an LLC automatically tax-free?

No. LLC status under state law does not answer all federal, state or owner-level tax questions. Classification, activity and ownership affect the analysis.

Does state approval mean I can open a bank account immediately?

No. A bank can require identifiers, ownership information, address evidence and other documents. Formation does not guarantee approval or eliminate eligibility checks.

How long does the process take?

Check the current state queue and the IRS route you need. Provider preparation time, state processing and EIN processing are distinct stages; there is no reliable nationwide completion promise.

Optional filing assistance

We may earn a commission if you purchase through links in this article.

You can file directly with the state. If you prefer paid help, Bizee is one available provider. Check the selected package, state fees, optional services and renewal terms before ordering. Paying a provider does not guarantee state or banking approval.