A friend of mine texted me at 11 p.m. last spring: “I think I need an LLC but I have no idea where to even begin. Do I need a lawyer? Is this going to cost a fortune?” She’d just landed her first big freelance design client and suddenly needed to look like a “real business” on paper.
I get some version of that message a few times a year. And every time, I tell people the same thing: forming an LLC is one of those tasks that sounds intimidating until you actually sit down and do it. It’s mostly paperwork, a handful of decisions, and knowing which order to do things in. That’s really it.
So let’s walk through it together, the way I’d explain it over coffee — not like a legal textbook.
A quick note before we start: I’m not a lawyer or an accountant, and rules vary by state, so treat this as a solid roadmap rather than formal legal or tax advice. For anything with real money or liability on the line, a quick call with a business attorney or CPA in your state is worth it.
Step 1: Make Sure an LLC Is Actually the Right Fit
Before you file anything, it’s worth pausing on why you want an LLC in the first place. Most people want two things: some legal separation between their personal assets and the business, and simpler taxes than a corporation.
An LLC gives you both. Your personal house, car, and savings are generally protected if the business gets sued or racks up debt (assuming you don’t mix personal and business finances — more on that later). And by default, the IRS treats an LLC as a “pass-through” entity, meaning the business itself doesn’t pay federal income tax; profits pass through to your personal return.
If you’re a solo freelancer just testing an idea, you might not need one yet — plenty of people operate as a sole proprietor for a while first. But once you have real clients, real contracts, or anything that could go sideways legally, the liability protection alone tends to make the LLC worth it.
Step 2: Pick Your State
This trips people up more than it should. You do not have to form your LLC in some “business-friendly” state you saw mentioned online. In almost every case, you should form your LLC in the state where you actually live and do business.
Here’s why: if you form in, say, Delaware or Wyoming but you’re operating out of Ohio, you’ll usually have to register as a “foreign LLC” in Ohio anyway — which means paying fees and filing paperwork in two states instead of one. Unless you’re raising venture capital or have a specific legal reason to form elsewhere, forming in your home state keeps things simpler and cheaper.
Step 3: Choose a Name (and Actually Check It’s Available)
Your LLC name needs to be unique in your state and usually has to include some form of “LLC” or “Limited Liability Company” in it. Most Secretary of State websites have a free business name search tool — use it before you fall in love with a name.
I’d also recommend a quick search on the US Patent and Trademark Office’s trademark database, and checking that the matching domain name and social handles are available. It’s a small thing, but nothing feels worse than settling on a name only to find out someone already owns it as a trademark in your industry.
Step 4: Appoint a Registered Agent
A registered agent is the person or company designated to receive official legal and state documents on your LLC’s behalf — think lawsuits, tax notices, annual report reminders. Every state requires one.
You can act as your own registered agent if you have a physical address in the state (not a PO box) and you’re comfortable having that address become part of the public record. A lot of people, especially those working from home, prefer to hire a registered agent service instead, which typically runs somewhere between $50 and $150 a year. It keeps your home address private and means you won’t miss an important notice because you were traveling.
Step 5: File Your Articles of Organization
This is the actual “birth certificate” of your LLC. You’ll file this document — sometimes called a Certificate of Formation or Certificate of Organization depending on the state — with your state’s Secretary of State (or equivalent office).
Typical information required includes:
- Your LLC’s name and address
- The registered agent’s name and address
- Whether the LLC is member-managed or manager-managed
- The names of the members/organizers (requirements vary)
Filing fees vary widely by state — anywhere from around $35 in a handful of states up to $500 in Massachusetts. Most states land somewhere between $50 and $200. Processing usually takes anywhere from same-day (if you pay for expedited service) to a few weeks.
Step 6: Write an Operating Agreement
Most states don’t legally require an operating agreement, but skipping this step is one of the more common regrets I hear about later. This document spells out how the LLC is owned and run: who owns what percentage, how profits and losses are split, what happens if a member wants to leave, and how major decisions get made.
If you’re a single-member LLC, it might feel unnecessary — it’s just you, right? But banks sometimes ask for it to open a business account, and it reinforces that your LLC is a separate legal entity from you personally, which matters if your liability protection is ever challenged in court. If you have business partners, this document isn’t optional in any practical sense — it’s the thing that prevents a friendship or partnership from turning into a legal mess later.
Step 7: Get an EIN From the IRS
An Employer Identification Number is basically a Social Security number for your business. You’ll need it to open a business bank account, hire employees, and file certain taxes. The good news: getting one is free and takes about ten minutes on the IRS website, as long as you apply directly through irs.gov rather than a third-party site that charges a fee for the same thing.
Step 8: Open a Business Bank Account
This step matters more than people expect. Mixing personal and business money in the same account — what lawyers call “commingling funds” — is one of the fastest ways to lose your liability protection if you’re ever sued. A court can decide that if you didn’t treat the LLC as separate from yourself, it shouldn’t protect you as separate either.
Bring your Articles of Organization, EIN confirmation letter, and operating agreement to the bank, and open a dedicated business checking account. Even if it feels like overkill for a small side business, future-you will be glad every transaction has a clean paper trail.
Step 9: Look Into Licenses and Permits
Depending on your industry and location, you may need additional licenses beyond the LLC filing itself — a general business license from your city or county, a seller’s permit if you sell taxable goods, or industry-specific licenses (think contractors, cosmetologists, or food businesses). Your city or county clerk’s website is usually the fastest way to check what applies to you.
Step 10: Understand Where BOI Reporting Stands in 2026
If you’ve read anything about starting an LLC over the past couple of years, you’ve probably seen scary warnings about a federal “Beneficial Ownership Information” (BOI) report and steep daily penalties for skipping it. Here’s the current picture, because it’s changed significantly.
In March 2025, FinCEN issued a rule that redefined which companies actually have to file. As things stand in 2026, LLCs and corporations formed in the United States — including single-member LLCs — are generally exempt from federal BOI reporting, regardless of who owns them. The requirement now mainly applies to companies formed under foreign law that are registered to do business in the US.
There are two wrinkles worth knowing about. First, this is an interim rule, not a permanent one, so it’s worth double-checking FinCEN’s official BOI page before you assume it still applies by the time you’re reading this. Second, some states are adding their own layer on top of the federal picture — New York, for example, now has a state-level transparency law taking effect for LLCs formed outside the US. So the honest answer is: most everyday US-formed LLCs don’t need to worry about BOI filing right now, but it’s a rule in motion, and a quick check closer to your formation date is smart.
Step 11: Stay on Top of Ongoing Compliance
Forming the LLC is the beginning, not the finish line. Most states require some combination of:
- Annual or biennial reports, usually with a small filing fee, to keep your LLC in good standing
- Franchise taxes or annual fees in some states (California’s flat $800 annual franchise tax is the one that surprises people most)
- Registered agent renewals, if you’re using a service
- Business license renewals, depending on your city or industry
Missing an annual report is how a lot of small LLCs accidentally get administratively dissolved by the state without the owner even realizing it happened.
What Does It Actually Cost in 2026?
For a rough sense of budget, here’s what most people can expect:
- State filing fee: $35–$500 (most states $50–$200)
- Registered agent service (optional): $50–$150/year
- Operating agreement: free if you draft it yourself using a template, or a few hundred dollars if you have a lawyer review it
- EIN: free
- Ongoing annual/biennial fees: varies widely, from $0 in a few states to several hundred dollars in others
If you use an online formation service instead of filing yourself, expect to pay their service fee on top of the state fee — often somewhere between $0 (bare-bones plans) and $300, plus the state’s cost.
A Few Mistakes Worth Avoiding
After watching enough friends go through this, here’s what tends to bite people:
- Forming in the “wrong” state for tax perks that don’t apply to a small local business, then paying to register in two states anyway.
- Skipping the operating agreement and having a fuzzy handshake understanding with a business partner instead.
- Mixing personal and business bank accounts, which can undo the liability protection you formed the LLC for in the first place.
- Forgetting the annual report, which can quietly dissolve your LLC without you realizing until much later.
The Bottom Line
Starting an LLC really does come down to a handful of concrete steps: pick your state, pick a name, appoint a registered agent, file your Articles of Organization, write an operating agreement, get your EIN, open a business account, and check on any licenses you need. The federal BOI filing that used to worry so many small business owners is, for most US-formed LLCs right now, one less thing to think about — though it’s worth a quick recheck since the rule is still evolving.
None of it requires a law degree. It just requires doing the steps in order and not skipping the boring-sounding ones, because those are usually the ones that protect you later.
This article is for general informational purposes and isn’t a substitute for advice from a licensed attorney or accountant familiar with your state and situation.
How to Start an LLC in the US: Step-by-Step Guide (2026)
A friend of mine texted me at 11 p.m. last spring: “I think I need an LLC but I have no idea where to even begin. Do I need a lawyer? Is this going to cost a fortune?” She’d just landed her first big freelance design client and suddenly needed to look like a “real business” on paper.
I get some version of that message a few times a year. And every time, I tell people the same thing: forming an LLC is one of those tasks that sounds intimidating until you actually sit down and do it. It’s mostly paperwork, a handful of decisions, and knowing which order to do things in. That’s really it.
So let’s walk through it together, the way I’d explain it over coffee — not like a legal textbook.
A quick note before we start: I’m not a lawyer or an accountant, and rules vary by state, so treat this as a solid roadmap rather than formal legal or tax advice. For anything with real money or liability on the line, a quick call with a business attorney or CPA in your state is worth it.
Step 1: Make Sure an LLC Is Actually the Right Fit
Before you file anything, it’s worth pausing on why you want an LLC in the first place. Most people want two things: some legal separation between their personal assets and the business, and simpler taxes than a corporation.
An LLC gives you both. Your personal house, car, and savings are generally protected if the business gets sued or racks up debt (assuming you don’t mix personal and business finances — more on that later). And by default, the IRS treats an LLC as a “pass-through” entity, meaning the business itself doesn’t pay federal income tax; profits pass through to your personal return.
If you’re a solo freelancer just testing an idea, you might not need one yet — plenty of people operate as a sole proprietor for a while first. But once you have real clients, real contracts, or anything that could go sideways legally, the liability protection alone tends to make the LLC worth it.
Step 2: Pick Your State
This trips people up more than it should. You do not have to form your LLC in some “business-friendly” state you saw mentioned online. In almost every case, you should form your LLC in the state where you actually live and do business.
Here’s why: if you form in, say, Delaware or Wyoming but you’re operating out of Ohio, you’ll usually have to register as a “foreign LLC” in Ohio anyway — which means paying fees and filing paperwork in two states instead of one. Unless you’re raising venture capital or have a specific legal reason to form elsewhere, forming in your home state keeps things simpler and cheaper.
Step 3: Choose a Name (and Actually Check It’s Available)
Your LLC name needs to be unique in your state and usually has to include some form of “LLC” or “Limited Liability Company” in it. Most Secretary of State websites have a free business name search tool — use it before you fall in love with a name.
I’d also recommend a quick search on the US Patent and Trademark Office’s trademark database, and checking that the matching domain name and social handles are available. It’s a small thing, but nothing feels worse than settling on a name only to find out someone already owns it as a trademark in your industry.
Step 4: Appoint a Registered Agent
A registered agent is the person or company designated to receive official legal and state documents on your LLC’s behalf — think lawsuits, tax notices, annual report reminders. Every state requires one.
You can act as your own registered agent if you have a physical address in the state (not a PO box) and you’re comfortable having that address become part of the public record. A lot of people, especially those working from home, prefer to hire a registered agent service instead, which typically runs somewhere between $50 and $150 a year. It keeps your home address private and means you won’t miss an important notice because you were traveling.
Step 5: File Your Articles of Organization
This is the actual “birth certificate” of your LLC. You’ll file this document — sometimes called a Certificate of Formation or Certificate of Organization depending on the state — with your state’s Secretary of State (or equivalent office).
Typical information required includes:
- Your LLC’s name and address
- The registered agent’s name and address
- Whether the LLC is member-managed or manager-managed
- The names of the members/organizers (requirements vary)
Filing fees vary widely by state — anywhere from around $35 in a handful of states up to $500 in Massachusetts. Most states land somewhere between $50 and $200. Processing usually takes anywhere from same-day (if you pay for expedited service) to a few weeks.
Step 6: Write an Operating Agreement
Most states don’t legally require an operating agreement, but skipping this step is one of the more common regrets I hear about later. This document spells out how the LLC is owned and run: who owns what percentage, how profits and losses are split, what happens if a member wants to leave, and how major decisions get made.
If you’re a single-member LLC, it might feel unnecessary — it’s just you, right? But banks sometimes ask for it to open a business account, and it reinforces that your LLC is a separate legal entity from you personally, which matters if your liability protection is ever challenged in court. If you have business partners, this document isn’t optional in any practical sense — it’s the thing that prevents a friendship or partnership from turning into a legal mess later.
Step 7: Get an EIN From the IRS
An Employer Identification Number is basically a Social Security number for your business. You’ll need it to open a business bank account, hire employees, and file certain taxes. The good news: getting one is free and takes about ten minutes on the IRS website, as long as you apply directly through irs.gov rather than a third-party site that charges a fee for the same thing.
Step 8: Open a Business Bank Account
This step matters more than people expect. Mixing personal and business money in the same account — what lawyers call “commingling funds” — is one of the fastest ways to lose your liability protection if you’re ever sued. A court can decide that if you didn’t treat the LLC as separate from yourself, it shouldn’t protect you as separate either.
Bring your Articles of Organization, EIN confirmation letter, and operating agreement to the bank, and open a dedicated business checking account. Even if it feels like overkill for a small side business, future-you will be glad every transaction has a clean paper trail.
Step 9: Look Into Licenses and Permits
Depending on your industry and location, you may need additional licenses beyond the LLC filing itself — a general business license from your city or county, a seller’s permit if you sell taxable goods, or industry-specific licenses (think contractors, cosmetologists, or food businesses). Your city or county clerk’s website is usually the fastest way to check what applies to you.
Step 10: Understand Where BOI Reporting Stands in 2026
If you’ve read anything about starting an LLC over the past couple of years, you’ve probably seen scary warnings about a federal “Beneficial Ownership Information” (BOI) report and steep daily penalties for skipping it. Here’s the current picture, because it’s changed significantly.
In March 2025, FinCEN issued a rule that redefined which companies actually have to file. As things stand in 2026, LLCs and corporations formed in the United States — including single-member LLCs — are generally exempt from federal BOI reporting, regardless of who owns them. The requirement now mainly applies to companies formed under foreign law that are registered to do business in the US.
There are two wrinkles worth knowing about. First, this is an interim rule, not a permanent one, so it’s worth double-checking FinCEN’s official BOI page before you assume it still applies by the time you’re reading this. Second, some states are adding their own layer on top of the federal picture — New York, for example, now has a state-level transparency law taking effect for LLCs formed outside the US. So the honest answer is: most everyday US-formed LLCs don’t need to worry about BOI filing right now, but it’s a rule in motion, and a quick check closer to your formation date is smart.
Step 11: Stay on Top of Ongoing Compliance
Forming the LLC is the beginning, not the finish line. Most states require some combination of:
- Annual or biennial reports, usually with a small filing fee, to keep your LLC in good standing
- Franchise taxes or annual fees in some states (California’s flat $800 annual franchise tax is the one that surprises people most)
- Registered agent renewals, if you’re using a service
- Business license renewals, depending on your city or industry
Missing an annual report is how a lot of small LLCs accidentally get administratively dissolved by the state without the owner even realizing it happened.
What Does It Actually Cost in 2026?
For a rough sense of budget, here’s what most people can expect:
- State filing fee: $35–$500 (most states $50–$200)
- Registered agent service (optional): $50–$150/year
- Operating agreement: free if you draft it yourself using a template, or a few hundred dollars if you have a lawyer review it
- EIN: free
- Ongoing annual/biennial fees: varies widely, from $0 in a few states to several hundred dollars in others
If you use an online formation service instead of filing yourself, expect to pay their service fee on top of the state fee — often somewhere between $0 (bare-bones plans) and $300, plus the state’s cost.
A Few Mistakes Worth Avoiding
After watching enough friends go through this, here’s what tends to bite people:
- Forming in the “wrong” state for tax perks that don’t apply to a small local business, then paying to register in two states anyway.
- Skipping the operating agreement and having a fuzzy handshake understanding with a business partner instead.
- Mixing personal and business bank accounts, which can undo the liability protection you formed the LLC for in the first place.
- Forgetting the annual report, which can quietly dissolve your LLC without you realizing until much later.
The Bottom Line
Starting an LLC really does come down to a handful of concrete steps: pick your state, pick a name, appoint a registered agent, file your Articles of Organization, write an operating agreement, get your EIN, open a business account, and check on any licenses you need. The federal BOI filing that used to worry so many small business owners is, for most US-formed LLCs right now, one less thing to think about — though it’s worth a quick recheck since the rule is still evolving.
None of it requires a law degree. It just requires doing the steps in order and not skipping the boring-sounding ones, because those are usually the ones that protect you later.
This article is for general informational purposes and isn’t a substitute for advice from a licensed attorney or accountant familiar with your state and situation.