How to Form an LLC, Step by Step
Eight steps take you from an idea to a working LLC. Most people finish the filing itself in one sitting. This guide explains each step, what it costs, and where people lose time or money.
The eight steps
Choose your state
For most small businesses, the right state is the state where you actually operate. Forming somewhere else does not remove your home state's reach: if you form in one state and work in another, you usually must register as a foreign LLC in the state where you work, which means two sets of fees and reports. Form at home unless you have a specific, advised reason not to. Our state guides cover the filing details for each state we track.
Choose a name
Your LLC name must be distinguishable from other businesses registered in the state, and it must include a designator such as "LLC" or "Limited Liability Company." Every state runs a free name search on its filing site, and that search is the one that counts. Check the name there first. A domain name and a trademark are separate questions; a name can be free at the state and still conflict with someone else's trademark, so a quick search of the federal trademark database is worth five minutes before you print anything.
Pick a registered agent
Every LLC must name a registered agent: a person or company with a physical street address in the state, available during business hours to receive legal papers and official mail. You can be your own agent if you meet those conditions, or you can hire a commercial service, which typically costs about $100 to $200 a year and keeps your home address off the public record. The trade-offs are covered in our registered agent guide.
File the formation document
This is the step that creates the LLC. You file the Articles of Organization (some states say Certificate of Formation) with the state filing office and pay the state fee. Most states take the filing online, and approval ranges from instant to a few weeks depending on the state and the season. The fee is the state's, and it is the same whether you file yourself or a service files for you. Our state guides link the official filing page and show the current fee for Indiana, Illinois, Texas, Florida, and California.
Get an EIN from the IRS
An Employer Identification Number is the LLC's federal tax ID. You will need one to open a business bank account at most banks, to hire employees, and for a multi-member LLC's tax filings. It is free from the IRS, it takes minutes online, and no one should ever charge you for it. Full details are in EIN for an LLC.
Write an operating agreement
The operating agreement is the LLC's internal rulebook: who owns what percentage, who makes decisions, what happens if a member leaves, dies, or wants to sell. A few states require one by law, but every LLC should have one anyway. For a single-member LLC it documents that the company is real and separate. Keep it signed and with your records; you do not file it with the state.
Open a business bank account
Bring your approved formation document, your EIN letter, and your operating agreement. A dedicated account is what makes your bookkeeping, your taxes, and your liability shield hold together. Run every business dollar through it, in and out, from day one.
Get licenses and set your calendar
Depending on the business, you may need a general business license, a professional license, a sales tax permit, or local permits. These come from different levels of government, so check your state and city requirements for your industry. Then put the recurring obligations on a calendar today: the annual report or state tax your state requires, and your registered agent renewal if you hired one. Missed state filings are the number one way healthy LLCs fall out of good standing.
What the whole thing costs
Do-it-yourself, the unavoidable cost is the state filing fee, which runs from under $50 to several hundred dollars by state, plus your state's recurring report fee in later years. Optional costs are a registered agent service (about $100 to $200 a year), a formation service if you hire one, and any license fees for your industry. An EIN is free, an operating agreement costs nothing if you write it yourself, and most banks offer no-fee business checking. Run your own numbers in the cost calculator.
Doing it yourself vs. hiring a formation service
Filing yourself is genuinely simple in most states, and the state charges you the same fee either way. A formation service earns its money on convenience and bundling: it prepares and submits the filing, supplies a registered agent, and sends compliance reminders. That is worth paying for if you value the reminders or want your address kept private through their agent service. It is not worth paying for EIN filing, which is free, or for rush promises the state does not honor. Our formation services comparison shows what each major provider actually charges, including the renewal prices most people miss.
After the state says yes
Approval is the start, not the finish. Keep your formation document, EIN letter, and operating agreement together. Watch for your state's first recurring deadline, which can arrive sooner than you expect; California, for example, wants a Statement of Information within 90 days. And if anyone contacts you offering to file a beneficial ownership report for a fee, check our BOI status tracker first. As of November 2026, US-formed LLCs have no federal BOI filing to make.
General Information Only
LLCForming publishes general information about forming and running an LLC. It is not legal, tax, or accounting advice, and it does not create an attorney or advisor relationship. Rules vary by state and by your situation. For a decision that matters, talk to a licensed attorney or tax professional in your state.