Forming an LLC takes more paperwork than skill. Most people get through all seven steps in a week, without paying anyone to do it for them.
1. Pick your state and name
Form in your home state in most cases. Check name availability on the Secretary of State website and confirm the name follows state rules, including the required "LLC" designation.
2. Choose a registered agent
A registered agent is a person or service with a physical in-state address who accepts legal and government mail for the LLC during business hours. You can serve as your own at no cost, but your address becomes public record if you do. If you are not sure that trade is worth it, this rundown of what a registered agent actually does walks through the tradeoffs before you decide.
3. File the Articles of Organization
This is the formation document you file with the state, along with the one-time fee. The cost calculator shows what each state charges, which ranges from $35 in Montana to $500 in Massachusetts, or you can see your state's exact filing fee before you file.
4. Write an operating agreement
Not required in every state, but worth doing regardless. It sets out ownership percentages, member roles, and how decisions get made. Single-member LLCs benefit from having one too.
5. Get an EIN
Your Employer Identification Number comes from the IRS at no cost. You need it to open a business bank account, hire employees, and file taxes.
6. Open a business bank account
Keep business and personal money in separate accounts. Mixing them is one of the fastest ways to lose the liability protection the LLC provides.
7. Stay compliant
File annual reports, pay any franchise tax, and keep your registered agent information current. Once profit grows, check whether an S-corp election would reduce your tax bill.
Worth noting: you can handle all of this yourself. Formation services sell convenience, not access to something you cannot do directly with your state.
Common Mistakes to Avoid
- Forming in the wrong state. Chasing a Delaware or Nevada listing when you actually live and work elsewhere usually means paying for a second registration as a foreign LLC back in your home state, doubling the fees for no real benefit.
- Skipping the operating agreement. Even a single-member LLC benefits from one. Without it, a bank, investor, or court has nothing to point to for how the business is actually run.
- Mixing personal and business funds. Paying business expenses from a personal account, or the reverse, is one of the fastest ways to lose the liability shield the LLC is supposed to provide.
- Missing the annual report deadline. States that require one will eventually mark the LLC delinquent and can administratively dissolve it. A missed report is fixable, but easier to avoid than to unwind.
- Not checking name availability first. Picking a name, ordering a logo, and then finding out it is taken wastes time. A five-minute search on your Secretary of State's site up front avoids the redo.
