Forming an LLC takes 15–60 minutes of paperwork and $50–$500 in state fees. It’s one of the most straightforward legal processes in business.
Quick answer: To form an LLC, you (1) choose a business name, (2) file articles of organization with your state, (3) designate a registered agent, (4) create an operating agreement, (5) get an EIN from the IRS, and (6) open a business bank account. Most states process online filings in 1–5 business days.
LLC Formation Overview
| Step | Time | Cost |
|---|---|---|
| 1. Choose a business name | 30 minutes | Free (name search) |
| 2. Choose a registered agent | 15 minutes | $0–$300/year |
| 3. File articles of organization | 15 minutes | $35–$500 (state filing fee) |
| 4. Create an operating agreement | 30–60 minutes | Free (DIY) or $50–$500 (lawyer) |
| 5. Get an EIN | 5 minutes | Free |
| 6. Open a business bank account | 30 minutes | Free (most banks) |
| 7. File state-specific requirements | Varies | Varies |
Step 1: Choose Your Business Name
Your LLC name must meet state requirements:
| Requirement | Details |
|---|---|
| LLC designator | Must include “LLC,” “L.L.C.,” or “Limited Liability Company” |
| Unique name | Cannot match an existing business in your state |
| Restricted words | “Bank,” “Insurance,” “University” may require extra approvals |
| Name search | Check your state’s business entity database (free) |
| Name reservation | Optional — $10–$50, holds name for 30–120 days |
Name search resources by state:
| State | Website |
|---|---|
| California | bizfileonline.sos.ca.gov |
| Texas | mycpa.cpa.state.tx.us/coa |
| Florida | dos.myflorida.com/sunbiz |
| New York | appext20.dos.ny.gov/corp_public |
| All states | Your state’s Secretary of State website |
Tips for choosing a name:
- Check domain availability (yourname.com)
- Search the USPTO trademark database (tess2.uspto.gov)
- Avoid names too similar to existing businesses
- Consider whether you’ll do business in other states
Step 2: Choose a Registered Agent
A registered agent receives legal documents and official mail on behalf of your LLC. Every state requires one.
| Option | Cost | Pros | Cons |
|---|---|---|---|
| Be your own agent | Free | No extra cost | Must have a physical address (not PO box), be available during business hours |
| Use a registered agent service | $100–$300/year | Professional, private address, always available | Annual cost |
| Use a friend/family member | Free | No cost | They must be always available, know what to do with documents |
Popular registered agent services:
| Service | Annual Cost | Includes |
|---|---|---|
| Northwest Registered Agent | $125/year | Mail scanning, compliance alerts |
| ZenBusiness | $199/year | Included with premium LLC packages |
| LegalZoom | $249/year | Compliance calendar, alerts |
| Incfile | $119/year | Free first year with LLC formation |
Step 3: File Articles of Organization
This is the main formation document — sometimes called a “Certificate of Formation” or “Certificate of Organization” depending on your state.
| Information Required | Details |
|---|---|
| LLC name | Must include LLC designator |
| Principal office address | Where you operate (can be home address) |
| Registered agent | Name and address |
| Member/manager names | Some states require, some don’t |
| LLC duration | Most choose “perpetual” |
| Management structure | Member-managed or manager-managed |
| Organizer signature | Person filing the document |
Filing fees by state (most common states):
| State | Filing Fee | Annual/Biennial Fee | Online Filing |
|---|---|---|---|
| California | $70 | $800/year (franchise tax) | Yes |
| Texas | $300 | $0 (no franchise tax for <$2.47M revenue) | Yes |
| Florida | $125 | $138.75/year | Yes |
| New York | $200 | $9/year + publication ($300–$1,500) | Yes |
| Delaware | $90 | $300/year | Yes |
| Wyoming | $100 | $60/year (or based on assets) | Yes |
| Nevada | $75 | $350/year (business license + annual list) | Yes |
| Illinois | $150 | $75/year | Yes |
| Ohio | $99 | $0 | Yes |
| Georgia | $100 | $50/year | Yes |
| North Carolina | $125 | $200/year | Yes |
| Pennsylvania | $125 | $0 (decennial report only) | Yes |
| New Jersey | $125 | $75/year | Yes |
| Virginia | $100 | $50/year | Yes |
| Washington | $200 | $60/year | Yes |
| Michigan | $50 | $25/year | Yes |
| Colorado | $50 | $10/year | Yes |
| Arizona | $50 | $0 | Yes |
| Massachusetts | $500 | $500/year | Yes |
| Kentucky | $40 | $15/year | Yes |
Step 4: Create an Operating Agreement
An operating agreement is your LLC’s internal rulebook. Not all states require one, but every LLC should have one.
| States Requiring Operating Agreement | Notes |
|---|---|
| California | Required by law |
| New York | Required by law |
| Maine | Required by law |
| Delaware | Required by law |
| Missouri | Required by law |
| All other states | Strongly recommended (protects liability shield) |
What to include:
| Section | What It Covers |
|---|---|
| Members & ownership | Who owns what percentage |
| Capital contributions | How much each member invested |
| Profit/loss distribution | How profits are split (doesn’t have to match ownership %) |
| Management structure | Member-managed vs. manager-managed |
| Voting rights | How decisions are made |
| Adding/removing members | Process for membership changes |
| Transfer of interests | Can members sell their share? |
| Dissolution | How and when the LLC can be closed |
| Dispute resolution | Mediation, arbitration, or litigation |
Single-member LLC: Still create an operating agreement — it strengthens your liability protection by proving the LLC is a separate entity.
Step 5: Get an EIN (Employer Identification Number)
An EIN is like a Social Security number for your business.
| Detail | Info |
|---|---|
| Cost | Free |
| Where to apply | irs.gov/ein |
| Processing time | Instant (online) |
| Who needs one | Multi-member LLCs (required), single-member LLCs (recommended) |
| Required for | Opening business bank account, hiring employees, filing taxes |
| Application hours | Online: Mon–Fri, 7AM–10PM ET |
How to apply online:
- Go to irs.gov and search “EIN”
- Click “Apply for an Employer Identification Number (EIN) Online”
- Select “Limited Liability Company” as entity type
- Enter member count and state
- Provide responsible party’s SSN/ITIN
- Receive EIN immediately
Step 6: Open a Business Bank Account
Never mix personal and business finances. Commingling funds can “pierce the corporate veil” and eliminate your liability protection.
| What You’ll Need | Details |
|---|---|
| Articles of organization | Approved filing from your state |
| EIN confirmation letter | IRS CP 575 (or SS-4 confirmation) |
| Operating agreement | Not all banks require this |
| Government-issued ID | Driver’s license or passport |
| Initial deposit | $0–$100 depending on bank |
Step 7: Additional State Requirements
| Requirement | States/Details |
|---|---|
| Publication requirement | New York (publish in 2 newspapers for 6 weeks), Arizona (some counties) |
| State business license | Varies — some states require, some delegate to counties/cities |
| DBA filing | Only if operating under a different name than your LLC name |
| Sales tax permit | Required if selling taxable goods/services |
| Professional license | Required for certain professions (law, medicine, accounting) |
| Annual report | Most states require annual or biennial filings |
LLC Formation Timeline
| Task | When |
|---|---|
| Name search + reservation | Day 1 |
| File articles of organization | Day 1–2 |
| State approval | 1–5 business days (online) |
| Get EIN | Same day as approval |
| Open bank account | Same day or next day |
| Create operating agreement | Within first week |
| Apply for licenses/permits | Within first 2 weeks |
| Set up accounting | Within first month |
Common Mistakes to Avoid
| Mistake | Why It Matters |
|---|---|
| Skipping operating agreement | Weakens liability protection |
| Mixing personal/business funds | Can pierce corporate veil |
| Forgetting annual filings | Can result in dissolution |
| Not getting proper insurance | LLC doesn’t protect against all liability |
| Using wrong LLC type | Professional LLCs (PLLC) required for some professions |
| Ignoring state-specific rules | Publication requirements (NY), franchise taxes (CA), etc. |
LLC Formation Services: DIY vs. Paid
| Option | Cost | Best For |
|---|---|---|
| DIY (file yourself) | $35–$500 (state fee only) | Anyone comfortable with basic paperwork |
| ZenBusiness | $0 + state fee (starter) | Budget-friendly, fast processing |
| LegalZoom | $0 + state fee (basic) | Brand recognition, add-on services |
| Incfile | $0 + state fee (basic) | Free registered agent first year |
| Northwest Registered Agent | $39 + state fee | Privacy-focused, good support |
| Attorney | $500–$2,000+ | Complex multi-member LLCs, unusual situations |
After You Form Your LLC
| Task | Timeline | Details |
|---|---|---|
| Get business insurance | First week | General liability at minimum |
| Set up accounting software | First week | QuickBooks, Wave, or FreshBooks |
| Open business credit card | First month | Build business credit history |
| Understand tax obligations | First month | Quarterly estimated taxes if applicable |
| Consider S-Corp election | When profitable | File Form 2553 to save on self-employment tax |
| File annual report | Annually | Check your state’s due date |
Bottom Line
Forming an LLC is a straightforward process that most people complete in under an hour of paperwork. The total cost ranges from $35 to $800+ depending on your state, with most states in the $50–$200 range. The biggest ongoing requirements are keeping business and personal finances separate, filing annual reports, and maintaining your registered agent.
Related: LLC vs. Sole Proprietorship | LLC vs. S-Corp | LLC Cost by State | Best State to Form an LLC | How to Start a Business