How to Form an LLC

Step 1: Form in the state where you actually work

This trips people up more than anything else. You will read that Delaware, Wyoming, or Nevada are better. For a small business run from your kitchen table, they are not. If you form in Wyoming but operate from Ohio, Ohio still requires you to register as a foreign LLC and pay Ohio fees. You end up with two filings, two annual reports, and two registered agents.

Form in your home state unless you have a specific reason not to, such as outside investors who expect Delaware.

Step 2: Pick a name that is available

Your name has to be distinguishable from every other business registered in that state, and it has to include an LLC marker: LLC, L.L.C., or Limited Liability Company. Search your secretary of state's business database before you get attached to a name. While you are there, check whether the matching domain is free.

Step 3: Appoint a registered agent

A registered agent is the person or company that receives legal papers for your business. Every state requires one, and the agent needs a physical street address in the state, available during business hours.

You can be your own agent in most states, which costs nothing. The catch is that your address becomes public record, and you have to actually be there during the day. If you work from home and would rather not publish your address, a commercial agent runs roughly $100 to $300 a year.

Step 4: File the articles of organization

This is the step that creates the LLC. The form is short, usually one page: business name, address, registered agent, and sometimes the members' names. You file it with the secretary of state, online in most states.

Filing fees range from about $40 to $500 depending on the state. Approval takes anywhere from minutes to a few weeks. Some states offer expedited processing for an extra fee, which is rarely worth it.

Step 5: Write an operating agreement

An operating agreement says who owns what, who decides what, and what happens if someone leaves or the business closes. Most states do not require one. You should still have one.

For a single-owner LLC it can be short, and free templates are fine. It matters more than it looks, for two reasons. Banks often ask for it, and it is part of showing a court that your LLC is a real separate entity rather than you with extra steps.

If you have partners, this is the step worth paying a lawyer for. Handshake agreements between friends are how businesses end badly.

Step 6: Get an EIN and open a bank account

An EIN is your business's tax ID. It is free directly from the IRS and takes about fifteen minutes online. Never pay a service for one. Our sister site EIN Easy Guide walks the application.

Then open a business bank account and run every business dollar through it. This is not bureaucratic tidiness. Mixing business and personal money is the single most common reason courts set aside LLC protection, which means skipping this step can undo everything you just did.

What about BOI reporting?

You may read that new LLCs must file a beneficial ownership report with FinCEN. That requirement no longer applies to companies formed in the United States. A FinCEN rule issued in March 2025 narrowed the definition of a reporting company to entities formed under foreign law that register to do business here. A normal domestic LLC files nothing.

This came from a change in how the rule is enforced rather than a change in the underlying law, so it is worth a quick check at FinCEN.gov before you assume it still holds.

What comes next

After formation, the recurring obligations are usually an annual or biennial report to the state, your registered agent if you use one, and your taxes. Once your profit grows, run the numbers on the S corp election, which is where the actual tax savings live.

By the Easy Guides Editorial Team