How to Form an LLC
Six steps, most of which you can do yourself in an afternoon.
Verdict: forming an LLC takes six steps and, for a straightforward single-owner business, you do not need a lawyer or a formation service. The state filing is the only step that is truly required, and it usually takes under an hour.
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.
The double cost is the thing to hold on to. Two filings means two formation fees, anywhere from $35 to $500 each, and two annual reports, which range from $0 to $800 a year. Wyoming's low fee does not offset your home state's, because you owe both.
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 one of 3 markers: LLC, L.L.C., or Limited Liability Company. Search your secretary of state's business database before you get attached to a name, and check whether the matching domain is free while you are there.
Distinguishable is a lower bar than most people assume. It usually means not identical, so a similar name may well be accepted even when it is a bad idea commercially. State approval is not a trademark check and offers no protection against someone with a prior claim to the name.
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 $35 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 1 step worth paying a lawyer for. Handshake agreements between friends are how businesses end badly, and the cost of drafting an agreement is trivial next to the cost of dissolving a disagreement without one.
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 the state report, your registered agent if you use one, and your taxes. The report cadence varies more than people expect: 40 states want one every year, 5 every other year, and 5 do not require one at all. Fees run from $0 to $800.
Missing the report is the most common way a new LLC quietly loses good standing, so find your state's month and diarise it now rather than waiting for a notice. Once profit grows, run the numbers on the S corp election, which is where the actual tax savings live.
Common questions
How long does it take to form an LLC?
The paperwork takes under an hour. State approval ranges from immediate to a few weeks depending on the state and whether you file online.
Do I need a lawyer to form an LLC?
For a straightforward single-owner business, no. If you have partners, outside investors, or a regulated business, a lawyer is worth it, especially for the operating agreement.
Should I form my LLC in Wyoming or Delaware?
Almost certainly not. If you operate from your home state, you will have to register there anyway as a foreign LLC and pay both sets of fees. Form where you work.
Do I need to file a BOI report with FinCEN?
Not if your LLC was formed in the United States. A March 2025 FinCEN rule limited reporting to entities formed under foreign law that register to do business here. Domestic LLCs file nothing.
Can I be my own registered agent?
In most states yes, and it is free. The trade-off is that your address goes on the public record and you need to be available at it during business hours.