Starting an LLC in any State is Simple, just follow these six steps:
STEP 1: Select Your State
For most new business owners, the best option is to form your LLC in the state where you live and where you plan to conduct your business. If your business will have a physical presence (storefronts, offices, sales reps, etc.) in different states, then you will need to register a foreign LLC in every state where you will do business.
There are sometimes benefits to forming your LLC in a state that has business-friendly laws, such as Delaware or Nevada. However, this is rarely worth the extra fees and paperwork of having to register your LLC in multiple states.
Learn more about where to form your LLC.
Select Your State to Begin
STEP 2: Name Your LLC
Choosing your business name is the first step in forming an LLC. Every state has its own rules about what kinds of names are allowed for LLCs. In general, you will need to observe these guidelines:
- Your name must include the phrase "limited liability company," or one of its abbreviations (LLC or L.L.C.).
- Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
- Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
To learn more about naming your business, read our How To Name a Business guide.
STEP 3: Choose a Registered Agent
A registered agent is a person or business that sends and receives legal papers on your behalf.
These documents include official correspondence like legal summons and document filings, which your registered agent will receive and forward to you.
Most states require every LLC to nominate a registered agent. Your registered agent must be a resident of the state you're doing business in, or a corporation authorized to conduct business in that state. To learn more about choosing a registered agent, check out our article What is a Registered Agent?
STEP 4: File your LLC with the State
To officially create an LLC, you will need to file your formation document with the state.
The most common name for this document is the Articles of Organization. In some states, this document is known as the Certificate of Formation or the Certificate of Organization.
To learn more, visit our Articles of Organization guide.
STEP 5: Create an LLC Operating Agreement
An LLC operating agreement is a legal document that outlines the ownership structure and member roles of your new LLC.
Although most states do not officially require you to have an Operating Agreement in order to form an LLC, it's still a good idea to have one. There are six main sections of an operating agreement:
- Organization: Outlines when and where the company was created, who the members are, and how ownership is structured.
- Management and Voting: Addresses how the company is managed, as well as how the members vote.
- Capital Contributions: Covers which members financially support the LLC, and forms a structure on how more funds will be raised in the future.
- Distributions: Outlines how the company's profits and losses are shared among members.
- Membership Changes: Describes the process for adding or removing members, as well as if and when members can transfer their ownership shares.
- Dissolution: Explains the circumstances in which the LLC may be dissolved.
For more information read our article, What is an LLC Operating Agreement?
STEP 6: Get an EIN
An Employer Identification Number (EIN) is like a social security number for your LLC. You will need an EIN if you want to hire employees or open business bank accounts.
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?
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Important Steps After Starting an LLC
Separate Personal Assets From Your Business
Using dedicated business banking and credit accounts is essential to protect your business' corporate veil. When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued.
Register Your LLC for State Taxes
Depending on the nature and location of your business, you may be required to register for several forms of state tax:
- If you are selling a physical product, you'll typically need to register for sales & use tax.
- If you have employees, you will likely need to register for unemployment insurance tax and employee withholding tax.
Read our LLC Tax Guide to learn how taxes will impact your business.
Set Up Accounting
Even before you officially open for business, there are a lot of expenses to keep track of. An accounting system enables you to keep a close eye on your business finances, including bills, expenses, and income. It also simplifies your annual tax filing.
If you need help, a certified public accountant can work with you to set up an accounting system for your business.
Read our article on business accounting to learn more.
Obtain Licenses and Permits
When you are registering an LLC, you need to determine if your business needs any licenses or permits in order to remain compliant. On the federal level, there are a handful of business activities that require licenses and/or permits:
- Alcoholic beverages
- Fish and wildlife
- Maritime transportation
- Mining and drilling
- Nuclear energy
- Radio/TV broadcasting
- Transportation and logistics
On the state and local levels, business license requirements vary depending on your state of formation, as well as on county and city laws.
To get a head start on business licensing for your LLC, read our guide.
*Recommended: If you need help, you can always hire a professional business license service. They'll handle the research and application process for you, providing convenience as well as the peace of mind that you have everything you need.
Get Business Insurance
In the vast majority of states, all businesses and corporations with employees are required to obtain workers compensation insurance. This insurance covers work-related injuries and diseases, regardless of who is at fault. For an in-depth look at workers compensation insurance, read our article.
General liability insurance is not typically a legal requirement, but it is very strongly recommended. This policy protects your business assets from lawsuits-without it, a legal claim could force your company out of business entirely. A general liability insurance policy covers injuries, property damage, personal liabilities, advertising liabilities, and legal defense and judgment.
Follow Hiring Laws
When you decide to hire employees for your LLC, you must follow these legal requirements:
- Verify that new employees are able to work in the US.
- Report employees as "new hires" to the state.
- Provide workers compensation insurance for employees.
- Withhold employee taxes.
- Print compliance posters and place them in visible areas of your work space.
- Pay employees at least minimum wage and as often as your state requires (weekly, bi-weekly, etc.)
Learn the Basics
- What is an LLC?
- Cost To Form An LLC
- How Single-Member LLCs Work
- How Many Owners Can an LLC Have?
- What is a Disregarded Entity LLC?
- What is a 501(c)(3)?
- Sole Proprietorship
- What is a PLLC?
- What Is A DBA
- Members Vs Managers Managed LLC
- What is a C Corp?
- What is an S Corporation
- What is a Nonprofit Corporation?
- How to Open a Company in the USA
- The Benefits of Forming An LLC
- The Business Planning Guide
- What Is A Certificate of Good Standing?
- LLC vs Corporation: Which is Right for You?
- LLC Vs Sole Proprietorship
- Why Form an LLC Instead of a Sole Proprietorship?
- LLC vs Partnership: Which Should I Form?
- PLLC vs LLC: What's the Difference?
- LLC vs S Corp: What's the Difference?
- What is the Difference Between S Corps and C Corps?
- Is it Better to Form an LLC or a DBA?
- What's the Difference Between an LLC and an LLP?
Form your LLC
- Name Your LLC
- LLC Name Search
- Changing the Name of Your LLC: What You Should Know
- What is an LLC Registered Agent?
- What are Articles of Organization
- What are Articles of Incorporation?
- What is an Operating Agreement?
- Free Operating Agreement Template
- LLC Managers and Members: What's the Difference?
- What are LLC Member Resolutions?
- What to Include in a Corporate Resolution
- What Is An EIN
- Business License Search
- Can You Use A Business Name That's Taken In Another State?
- Getting a US Address for a Non-Resident Owned Business
- Important Steps After Forming Your LLC
- Should You Use a National or Local Bank?
- Understanding LLC Resolutions
Protect your LLC
- Maintain Your LLC
- Business Insurance
- General Liability Insurance
- Worker's Compensation
- Professional Liability Insurance
- Separate Personal and Business Finances
- Maintain LLC Corporate Veil
- What Does it Mean to Pierce the Corporate Veil?
- Do I Need to Trademark My Business Name?
- How To Get A Business Credit Card
- Why Get A Business Credit Card.
- What is an LLC Annual Report?
- File Your LLC Annual Report
- Hiring Compliance
- Contractors vs Employees: What You Need to Know
- Contractors vs. Employees: The Full Set of Factors
- How to Open a Business Checking Account
- Why You Need a Business Bank Account
- LLC Taxes
- How To File Your LLC Taxes
- Business Taxes
- Choose A Tax Status
- LLC Pass-Through Taxation: How Does it Work?
- Why Elect S Corp Tax Status for Your LLC?
- Multi-member Taxes
- Single Member Taxes
- Why Accounting Is Important
- Business Book-keeping
- LLC vs Corporation Taxes
- LLC vs Sole Proprietorship Taxes
- LLC Guaranteed Payments: Everything You Need to Know
- How Does Corporate Income Tax Work?
- LLC Late Tax Filing: What You Should Know
- Forms 1099 & W-9 For Small Businesses
Advanced LLC Topics
- Contributions & Distributions: The Basics of LLC Ownership
- Adding LLC Partners via Sweat Equity: A Guide
- Should My LLC Have a Holding Company?
- Sweat Equity: What You Should Know
- From DBA to LLC: A Step-by-Step Guide
- Form a Series LLC
- Can You Switch From an LLC to a Corporation?
- Foreign LLC
- How to Dissolve an LLC
- LLC Guaranteed Payments: Everything You Need to Know