How to Form an LLC: Steps, Cost & Requirements (2026)
You form an LLC in eight steps: pick the state where you will form, choose and check a name, appoint a registered agent, file the Articles of Organization (called a Certificate of Formation in some states) with the Secretary of State, create an operating agreement, get a free EIN from the IRS, open a business bank account, and handle licenses, taxes, and annual reports. State filing fees vary - roughly $35 to $500 - so this national guide links each state's exact fee.
Quick Answer
- Creating document
- Articles of Organization (Certificate of Formation in some states)
- Where you file
- The state Secretary of State or equivalent business agency
- State filing fee
- Varies by state, roughly $35–$500 (2026) - see your state guide
- Registered agent
- Required in every state; physical address in the formation state
- EIN
- Free from the IRS via Form SS-4, issued online in minutes
- Default federal tax
- Single-member: disregarded entity · Multi-member: partnership
- Ongoing
- Most states require an annual or biennial report; licenses vary by activity
What an LLC Is and When to Form One
A limited liability company (LLC) is a business structure allowed by state statute that combines the limited liability of a corporation with the tax flexibility of a partnership. The Legal Information Institute describes it as "a non-incorporated business organization that retains elements of both partnerships and corporations," giving members "limited personal liability in the business." Because an LLC is a creature of state law, you create one by registering with a state - there is no federal LLC. This page is the national, state-neutral overview; for exact fees and forms, follow the state guides linked throughout, such as how to form an LLC in Texas.
Form an LLC when you want to separate your personal assets from business debts and lawsuits. The U.S. Small Business Administration notes that LLCs "protect you from personal liability in most instances," so personal assets like your home, vehicle, and savings generally are not at risk if the business faces bankruptcy or a lawsuit. LLC profits and losses pass through to the members' personal returns, avoiding corporate-level tax, though members are self-employed and pay self-employment tax toward Social Security and Medicare. If you are weighing structures, compare an S-corp vs LLC before you file.
What You'll Need Before You File
Before filing your Articles of Organization, gather the core information every state's form asks for. Having these ready lets most owners complete the filing in one online session.
- Business name - an available name with an LLC designator (see Step 2).
- Registered agent - a person or company with a physical in-state address who consents to receive legal documents.
- Principal office address - the LLC's main business address.
- Management structure - whether the LLC is member-managed or manager-managed.
- Members/organizer - the names of the initial members or the organizer signing the filing.
- Filing fee - payment for the state's fee, which varies by state.
The table below maps each core document to what it does and where it goes. It is the fastest reference for what an LLC filing actually involves.
| Document | What it does | Where it goes |
|---|---|---|
| Articles of Organization (Certificate of Formation) | Legally creates the LLC | State Secretary of State |
| Registered agent designation | Names who accepts service of process | Filed with the Articles |
| Operating agreement | Sets ownership, management, profit sharing | Kept internally (not filed in most states) |
| Form SS-4 / EIN application | Obtains the federal tax ID | IRS (free) |
| Business licenses/permits | Authorizes regulated activity | Federal, state, or local agency |
How to Form an LLC, Step by Step
Forming an LLC follows the same eight steps in every state; only the agency name, form title, and fee change. Each step below reflects a requirement of state business-organization law or federal tax rules.
- Choose the state where you will form. In most cases, form in the state where you live and run the business. The SBA explains that "your business location determines the taxes, zoning laws, and regulations your business will be subject to," and that income, sales, property, and corporate taxes "can vary significantly from place to place." If you operate in more than one state, you typically form in one state and file for foreign qualification in the others.
- Pick and check your LLC name. Choose a name that includes an LLC designator (such as "LLC" or "Limited Liability Company") and is distinguishable from names already registered in that state. Entity names are protected only at the state level, so a federal trademark search is a separate step to avoid infringing an existing mark.
- Appoint a registered agent. Every state requires an LLC to designate a registered agent - an "agent for service of process" - with a physical address in the formation state. The agent receives lawsuits and official notices so the company has notice of any suit. You can act as your own agent, name a manager, or hire a commercial service.
- File the Articles of Organization with the Secretary of State. File the Articles of Organization (called a Certificate of Formation in states like Texas and Washington) with the Secretary of State and pay the state filing fee. The SBA notes the total cost to register is usually under $300, "but fees vary depending on your state and business structure." The LLC legally exists once the state accepts the filing.
- Create an operating agreement. Adopt an operating agreement - the governing contract members adopt to set ownership percentages, management, voting, and profit distribution. Most states do not require you to file one, but it becomes binding once signed and overrides default state rules.
- Get an EIN from the IRS. Apply for a free Employer Identification Number using Form SS-4. The IRS issues it online "in minutes," and you "never have to pay a fee for an EIN." An EIN is required if the LLC has more than one member or any employees, and banks require one to open an account.
- Open a business bank account. Open a dedicated business account using the stamped Articles of Organization and the EIN. Keeping business and personal finances separate is essential to preserving limited liability - courts may "pierce the veil" when an LLC is run as an extension of the owner rather than a separate entity.
- Handle licenses, taxes, and annual reports. Obtain any licenses and permits your activity requires (federal for regulated industries; state and local for most others), register for applicable state taxes, and calendar your state's annual or biennial report to stay in good standing.
LLC Formation Cost: Why Fees Vary by State
There is no single national LLC filing fee. Because an LLC is created under state law, the fee for the Articles of Organization is set by each state and ranges from roughly $35 to $500 as of 2026. The SBA states that "in most cases, the total cost to register your business will be less than $300, but fees vary depending on your state and business structure." For the exact amount, see your state guide or how much an LLC costs.
| Cost item | Typical amount (2026) | Set by |
|---|---|---|
| Articles of Organization filing fee | Varies by state (~$35–$500) | State Secretary of State |
| Name reservation (optional) | Varies by state | State Secretary of State |
| Registered agent (if you hire one) | Market-priced service; $0 if self | Commercial provider |
| Federal EIN | $0 (free) | IRS |
| Operating agreement | $0 if self-drafted | Internal |
| Annual/biennial report | Varies by state | State Secretary of State |
Some states also levy an annual franchise tax or report fee that dwarfs the setup cost - see, for example, California's and Delaware's guides for those state-specific charges.
Processing Time and What to Expect
Processing time for the Articles of Organization is set by each state and typically ranges from the same day (for online filings in many states) to a few weeks by mail; many states offer paid expedited service. Once the Secretary of State accepts your filing, it returns a stamped copy or certificate confirming the LLC exists. Your EIN is separate and faster: the IRS issues it immediately through the online application, which you must complete in one session because it "expires after 15 minutes of inactivity." You can request only one EIN per responsible party per day. After you have both the stamped Articles and the EIN, you can open a bank account and begin operating.
After You Form: Ongoing Compliance
Forming the LLC is the start of an ongoing compliance calendar, not a one-time event. Most states require LLCs to file a periodic annual or biennial report - sometimes called a Statement of Information or Public Information Report - to keep registration and agent details current, and some assess a franchise tax. Missing these can forfeit the LLC's good standing.
On the federal side, the IRS classifies your LLC by default: "an LLC with only one member is treated as an entity disregarded as separate from its owner," and "a domestic LLC with at least two members is classified as a partnership," unless it files Form 8832 to elect corporate treatment. An LLC that wants pass-through corporate tax treatment can instead elect S-corporation status by filing Form 2553. You will also need to keep your registered agent current and track any license renewals, since the SBA warns that license "requirements and fees vary based on your business activities, location, and government rules." When you eventually wind down, follow the steps to dissolve the LLC so obligations stop running.
Common Mistakes and Penalties
The costliest LLC mistakes are ongoing, not procedural. Failing to file the required annual or biennial report or pay a state franchise tax can lead the state to administratively dissolve or revoke the LLC, ending its liability shield until you reinstate it and pay penalties. Not maintaining a registered agent can trigger the same involuntary termination, and it means you may never learn of a lawsuit filed against the company.
Two other errors recur. First, commingling funds - running personal and business money through one account - invites a court to "pierce the corporate veil" and hold owners personally liable. Second, forming in a state where you do not operate (chasing a "tax-friendly" state) usually forces you to register as a foreign LLC back home anyway, paying two sets of fees. Forming in your home state and keeping clean books avoids both. For a state walkthrough with exact penalty rules, see Florida or New York.
Frequently Asked Questions
How much does it cost to form an LLC?
State filing fees for the Articles of Organization vary by state, roughly $35 to $500. The SBA notes the total cost to register a business is usually under $300, but fees depend on your state and structure. An EIN from the IRS is always free.
What document creates an LLC?
You create an LLC by filing Articles of Organization - called a Certificate of Formation in some states - with the state Secretary of State. The LLC legally exists once the state accepts the filing.
In which state should I form my LLC?
Most owners form in the state where they live and do business, because location determines the taxes and regulations that apply. Forming elsewhere usually means also registering as a foreign LLC in your home state, adding fees.
Does an LLC need a registered agent?
Yes. Every state requires an LLC to designate a registered agent (agent for service of process) with a physical address in the formation state to receive lawsuits and official notices.
How is an LLC taxed by the IRS?
By default the IRS treats a single-member LLC as a disregarded entity and a multi-member LLC as a partnership. An LLC can elect corporate treatment with Form 8832, or S-corporation treatment with Form 2553.
Do I need an operating agreement?
Most states do not require one, but it is strongly recommended. An operating agreement is the governing contract members adopt to control management, ownership, and profit sharing, overriding default state rules.
Related
- What is an LLC?
- How much does an LLC cost?
- What is a registered agent?
- LLC operating agreements
- How to get an EIN
- S-corp vs LLC
- What is a DBA?
- How to dissolve an LLC
- State guides: Texas · California · Florida · New York · Delaware
State-by-state LLC formation guides
Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
Sources
- U.S. Small Business Administration - Register your business (Articles of Organization; registered agent; "fees vary depending on your state," total usually under $300).
- U.S. Small Business Administration - Choose a business structure (LLC liability protection, pass-through taxation, self-employment tax).
- U.S. Small Business Administration - Pick your business location (location determines taxes and regulations; foreign qualification).
- U.S. Small Business Administration - Apply for licenses and permits (federal vs. state/local; "requirements and fees vary").
- IRS - Limited Liability Company (LLC) (single-member disregarded entity; multi-member partnership; Form 8832).
- IRS - Business structures ("A limited liability company (LLC) is a business structure allowed by state statute").
- IRS - Get an Employer Identification Number (free EIN; online issuance; one per responsible party per day; 15-minute session).
- IRS - About Form SS-4, Application for Employer Identification Number (purpose; who applies).
- IRS - S corporations (Form 2553 election; pass-through; Form 1120-S).
- Cornell Legal Information Institute - Limited Liability Company (LLC) (definition; register with the state; operating agreement; pass-through taxation; piercing the veil).
- Cornell Legal Information Institute - Agent for service of process (each state requires a designated agent to receive legal documents).
- Cornell Legal Information Institute - Operating agreement (governing contract adopted by members; most states do not require it; supersedes default rules).
LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Because an LLC is governed by state law, filing fees, forms, and deadlines vary by state and change over time; verify current requirements with your state's Secretary of State and the IRS before acting.