A limited liability company (LLC) is the most popular business structure in the United States for a reason: it protects your personal assets, keeps your taxes simple, and doesn't demand the formal governance of a corporation. If you're a solo consultant, an online seller, or a small partnership, an LLC is usually the right first move.
This guide walks through the real steps — including the ones that actually cost money and the ones you should never pay for.
Step 1 — Pick a name that passes your state's rules
Your LLC name must be distinguishable from every other registered business in your state. Three practical rules:
- End with a required designator — most states require "LLC", "L.L.C.", or "Limited Liability Company" in the official name.
- Avoid restricted words — "Bank", "Trust", "Insurance", and "University" typically require licensing or extra filings.
- Check availability before you fall in love — your state's Secretary of State has a free business search. Use it early.
Step 2 — Choose your formation state
Most owners should form in their home state. Three situations push you elsewhere:
- Delaware — if you plan to raise venture capital or go public, investors expect Delaware.
- Wyoming or Nevada — lower fees and strong privacy, popular with asset holders.
- Your home state is expensive — compare the combined state fee + franchise tax before deciding.
For 90% of small businesses, forming in your home state is the right call — it avoids the extra cost and paperwork of foreign qualification. See our guide on choosing a state.
Step 3 — Choose a registered agent
Every LLC needs a registered agent: a person or service that accepts legal mail (service of process, state notices) during business hours at a physical address in the formation state.
Your options:
- Yourself — free, but your address becomes public record and you must be reachable during business hours.
- A friend or family member — free-ish, but a real obligation that most people don't want to hand to a friend.
- A registered agent service — a small annual fee (ours is $149/year, well under LegalZoom's $249) for privacy and a reliable mailbox.
Step 4 — File your Articles of Organization
The Articles of Organization (sometimes called a Certificate of Formation) is the single official document that creates your LLC. It's short — name, address, registered agent, organizer — and it's what the state fee actually pays for.
Two ways to file:
- Directly with your state — usually $40–$300 depending on the state and filing speed. You handle the forms and any mistakes yourself.
- With a formation service — we prepare, review, and file the paperwork for you. Our Basic plan costs $0 (state fees only) because we don't believe you should pay for what should be cheap.
Step 5 — Get your EIN (Employer Identification Number)
An EIN is your business's federal tax ID — you need it to open a bank account, hire employees, file taxes, and sometimes to get a business credit card.
- The IRS issues EINs for free. You can file Form SS-4 yourself in about 10 minutes.
- Never pay a middleman. LegalZoom charges $79 for the exact same form. We obtain your EIN for free with every formation.
Step 6 — Write your Operating Agreement
An Operating Agreement is the internal rulebook for your LLC: who owns what, how profits are split, who makes decisions, and what happens if someone leaves.
Why it matters:
- Required in CA, NY, MO, and ME — even for single-member LLCs.
- Protects your liability shield — without it, courts can "pierce the veil" and treat you as a sole proprietor.
- Banks require it — most won't open a business account without a signed one.
- Prevents disputes — it settles arguments before they happen.
We include a state-specific Operating Agreement in our Pro plan and sell it standalone for $50 (LegalZoom charges $99).
Step 7 — Open a business bank account
Keep your LLC's money separate from your personal money. A separate account is the single best way to preserve your liability protection — co-mingling funds is how people lose lawsuits.
You'll need your EIN, your Articles of Organization, and your Operating Agreement. We offer a free warm introduction to our partner banks (Comerica in Texas, Chase, and Mercury for tech founders) that removes most of the paperwork friction.
Step 8 — Check business licenses
Federal, state, and local licenses vary by industry and city. A barbershop, a food truck, and a software consultancy need completely different paperwork.
If you're not sure what applies, our Business License Research service digs through federal + state + local requirements for your specific industry and city for a flat $49.
What it actually costs
| Item | DIY cost | Typical service cost |
|---|---|---|
| State filing fee | $40–$300 | Same (passed through) |
| EIN | $0 (IRS) | $0 with us (LegalZoom: $79) |
| Registered agent | $0 self / $149 service | $149/year with us (LegalZoom: $249) |
| Operating Agreement | $0 if you draft it | $50 with us (LegalZoom: $99) |
| Name search + forms | $0 | $0 with us |
Common questions
Do I need an attorney to form an LLC? No. Formation is form-filling — most people do it themselves or use a service. An attorney is worth hiring later for contracts, disputes, or unusual ownership structures.
Single-member or multi-member? It's the same filing in most states. The difference is tax treatment (default: disregarded vs. partnership) and that multi-member LLCs need all members to sign the Operating Agreement.
When should I form the LLC vs. do business first? Form before you sign anything, collect money, or take on liability. The shield protects from that point forward.
Can I form an LLC on a visa? In most cases yes — LLCs are open to US citizens, green card holders, and most visa/ITIN holders. There are some restrictions on S-Corp status specifically, which we cover in our visa guides.
Ready to start?
Answer a few questions and we'll file everything — Articles, EIN, Operating Agreement — with a CPA reviewing your setup. Start with a free name check.