How to Start an LLC: 6 Steps to Form Your Business
Learn the 6 steps to start an LLC — from choosing a name and filing your Articles of Organization to getting an EIN and staying compliant. A practical guide for entrepreneurs.
Bizee Editorial Staff
Editorial Team
Introduction
Forming an LLC takes 6 core steps: choose a name, pick your state, designate a registered agent, file your Articles of Organization, create an operating agreement, and get your Employer Identification Number (EIN). Each step is a specific legal action — and getting them in the right order matters.
Step 1: Choose your state
You can form an LLC in any U.S. state, regardless of where you live or run your business. For most entrepreneurs, the right answer is the state where you actually do business — it keeps things simple and avoids the cost of registering as a foreign LLC in a second state.
States like Delaware, Wyoming, and Nevada get a lot of attention for business-friendly laws and low fees. Those advantages are real — but they matter most for businesses raising outside investment or prioritizing privacy. If you're a solo entrepreneur or small business owner running operations in one state, forming there is usually the more practical choice.
The state you choose determines your filing fees, annual report requirements, and any state-level taxes like franchise taxes. Those details vary enough that it's worth checking your state's Secretary of State website before you file.
Step 2: Name your LLC
Your LLC name needs to be unique in your state and include a designator — most states require "LLC," "L.L.C.," or "Limited Liability Company" at the end. Beyond that, most states prohibit certain words like "Bank," "Insurance," or "Corporation" without special approval.
Check name availability through your state's Secretary of State business entity search tool before you get attached to a name. A name that's taken in your state can't be used, even if it's available as a domain or on social media.
It's also worth running a federal trademark search through the USPTO database. State availability doesn't protect you from infringing on a registered trademark — and that's a problem that's much easier to catch before you file than after.
Step 3: Designate a registered agent
Every LLC needs a registered agent — a person or company designated to receive legal documents, tax notices, and official state correspondence on behalf of the business. The registered agent must have a physical street address in the state where your LLC is formed and be available during normal business hours.
You have 3 options: serve as your own registered agent (if you have a physical address in the state), name another individual who meets the requirements, or hire a registered agent service. Most business owners who work from home or travel choose a registered agent service — it keeps a personal home address off public state records and ensures someone is always available to accept documents.
Step 4: File your Articles of Organization
The Articles of Organization is the document that officially creates your LLC. You file it with your state's Secretary of State — or the equivalent business filing office — along with the required state fee. This is the step that makes your LLC a legal entity.
The form typically asks for your LLC's name, principal address, registered agent information, member names and addresses, and the purpose of the business. Some states accept a general purpose statement; others require something more specific. Requirements vary by state, so check your state's filing office for the exact form and instructions.
State filing fees range widely — from under $50 in some states to several hundred dollars in others. Processing times also vary. Most states offer online filing, which is faster than filing by mail.
Step 5: Create an operating agreement
An operating agreement is an internal document that defines how your LLC is owned, managed, and operated. It's not filed with the state — you keep it with your business records. Some states require one; most don't. Either way, having one is worth it.
For a single-member LLC, an operating agreement reinforces that your business is a separate legal entity — which matters if your liability protection is ever challenged. For multi-member LLCs, it's the document that prevents disputes by spelling out each member's ownership percentage, voting rights, profit and loss allocation, and what happens if someone wants to leave.
Without an operating agreement, your LLC falls back on your state's default rules — which may not reflect how you actually want to run things. Writing one early is far easier than trying to sort out ownership disputes later.
Step 6: Get your EIN
An Employer Identification Number (EIN) is a 9-digit number the IRS uses to identify your business for tax purposes. Most LLCs need one — especially if you have employees, operate as a partnership, or plan to open a business bank account. You apply directly through the IRS at no cost.
The fastest way to get an EIN is through the IRS online application — you'll get your number immediately after completing the form. The online application is available Monday through Friday, 7 AM – 10 PM ET. If you apply by fax using Form SS-4, expect about 4 business days. Mail applications take several weeks.
A single-member LLC with no employees can use the owner's Social Security Number instead of an EIN. But an EIN keeps your personal number off business documents and is required to open most business bank accounts — so getting one is the better move for most entrepreneurs.
After formation: licenses, permits, and compliance
Filing your Articles of Organization makes your LLC official, but it doesn't mean you're done. Depending on your industry, location, and business activities, you may need federal, state, or local licenses and permits before you can legally operate. Requirements vary widely — a home-based consultant has different obligations than a food service business.
On the tax side, most LLCs are pass-through entities — business income flows through to members' personal tax returns rather than being taxed at the entity level. Single-member LLCs file Schedule C; multi-member LLCs file Form 1065. If you expect to owe $1,000 or more in federal taxes, you'll need to make estimated quarterly payments.
Most states also require LLCs to file annual reports and pay annual fees to stay in good standing. Missing these deadlines can put your LLC at risk of administrative dissolution — meaning the state can revoke your LLC status. Mark your state's annual report deadline as soon as your LLC is formed.
FAQ
An LLC — Limited Liability Company — is a business structure that separates your personal assets from your business debts and legal obligations. If your business is sued or can't pay its bills, your personal finances are generally protected. LLCs also offer tax flexibility: by default, income passes through to your personal tax return, but you can elect corporate tax treatment if it makes sense for your situation.
It depends on your state. The state filing fee for Articles of Organization ranges from under $50 in some states to several hundred dollars in others. That fee is required regardless of how you file. If you use a formation platform, there may be an additional service fee on top of the state fee. Ongoing costs — like annual report fees — also vary by state.
Yes. You don't need an attorney to form an LLC. The process involves filing paperwork with your state, paying the required fee, and completing a few additional steps like getting an EIN. Many entrepreneurs handle formation on their own or through a formation platform. That said, if your business has complex ownership arrangements or you're unsure about tax elections, talking to a legal or tax professional is worth it.
Start by choosing your state and checking name availability. Those 2 decisions shape everything else — your filing fees, your registered agent requirements, and whether your preferred business name is even available. Once you've confirmed a name is available in your state, you can move through the remaining steps in order: registered agent, Articles of Organization, operating agreement, and EIN.
Mistakes that come up often include mixing personal and business finances (which can put your liability protection at risk), skipping the operating agreement, missing annual report deadlines, and not getting an EIN before opening a business bank account. Another one: forming in a "business-friendly" state when you actually operate somewhere else — that can mean paying fees and filing requirements in 2 states instead of 1.
No. Forming an LLC and getting a business license are separate things. You don't need a business license to file your Articles of Organization. But after your LLC is formed, you may need federal, state, or local licenses and permits depending on your industry and location. The SBA's license and permit tool can help you figure out what applies to your specific business.
