How to Start an LLC: Step-by-Step Guide (2026)

There are various types of business entities, including a limited liability company (LLC). But what exactly is an LLC? How does it operate? How is it registered with the state? This guide covers everything you need to know.
Avoid headaches, fines and more by using a service to start your LLC
Starting an LLC protects your personal assets, gives your business credibility, and takes less than an hour in most states. This guide walks you through every step — from naming your LLC to getting your EIN — with state-specific costs and timelines.
An LLC (limited liability company) is the most popular business structure in the United States, and for good reason. Here’s what you get:
The cost is low (under $300 in most states), the process is simple, and the protection is significant. If you’re running any business with real income or liability risk, an LLC is almost always worth it. For a deeper comparison, see LLC vs sole proprietorship.
Most people should form their LLC in the state where they live and do business. Forming in another state (like Wyoming or Delaware) sounds appealing, but it usually means registering as a “foreign LLC” in your home state anyway — doubling your fees and paperwork.
The exception: if you have no physical presence in any state (such as an online-only business run by a non-US resident), forming in a business-friendly state like Wyoming or Delaware can make sense. See our Wyoming vs Delaware comparison for details.
Select your state for specific instructions:
Your LLC name must meet three requirements in every state:
Use our business name search tool to check availability in your state. If your desired name is taken, most states let you reserve a name for 60–120 days for a small fee ($10–$50) while you prepare your filing.
Tip: Check domain name availability at the same time. Having a matching .com helps with credibility and marketing.
Every LLC needs a registered agent — a person or service with a physical address in your state of formation who can accept legal documents (like lawsuits or state notices) on behalf of your LLC.
You have three options:
Most business owners choose a registered agent service for the privacy and convenience. It’s one of the few ongoing costs of an LLC, and it’s well worth it.
This is the official step that creates your LLC. You’ll file a document called Articles of Organization (or “Certificate of Formation” in some states) with your state’s Secretary of State office.
The form is usually one or two pages and asks for:
Most states let you file online, and processing takes anywhere from same-day to 2–4 weeks depending on the state.
Member-managed vs manager-managed: In a member-managed LLC (the default and most common), all owners participate in running the business. In a manager-managed LLC, one or more designated managers handle operations while other members are passive investors. Choose member-managed unless you have silent partners.
For a complete breakdown of all 50 states, see our LLC cost guide.
An LLC operating agreement is an internal document that defines how your LLC is run. It covers:
Some states legally require an operating agreement (New York, California, Missouri, Maine, and Delaware). But even where it’s not required, you should have one. Without it, your LLC defaults to your state’s generic LLC rules — which may not reflect what you actually want.
For single-member LLCs, the operating agreement is simple — usually a 2-3 page document. Multi-member LLCs need more detail, especially around profit sharing, voting, and buyout provisions.
An EIN (Employer Identification Number) is a federal tax ID for your business — think of it as a Social Security number for your LLC. You need one to:
Getting an EIN is free and takes about 5 minutes on the IRS website. You’ll receive your EIN immediately after completing the online application.
Once your LLC is approved, take these steps to set it up properly:
This is critical. Using a separate business account keeps your personal and business finances separate, which protects your limited liability status. You’ll need your Articles of Organization, EIN, and operating agreement to open the account.
Depending on your industry and location, you may need federal, state, or local business licenses. Common examples include sales tax permits, professional licenses, and home occupation permits.
By default, a single-member LLC is taxed as a sole proprietorship (Schedule C) and a multi-member LLC is taxed as a partnership (Form 1065). Both are pass-through — the LLC doesn’t pay federal income tax. Instead, profits pass through to each member’s personal return.
You will pay self-employment tax (15.3%) on net earnings. If your profits exceed $50,000–$60,000 per year, consider electing S-Corp taxation to reduce this. See our LLC vs sole proprietorship comparison for tax details.
Most states require LLCs to file an annual (or biennial) report and pay a fee to stay in good standing. Miss this deadline and your state may dissolve your LLC. Fees range from $0 (in some states) to $800 (California’s franchise tax). Mark the due date on your calendar.
In most states, you can form an LLC in one day to two weeks. The actual filing takes 15–30 minutes — the wait is for state processing.
Many states offer expedited processing for an additional fee ($50–$200).
Total first-year cost: $50–$1,500 depending on your state and choices. Most LLCs cost under $300 to set up. See the full breakdown in our LLC cost guide.
For most small business owners, the pros far outweigh the cons. The liability protection alone is worth the modest cost.
You don’t need one — filing on your own is simple and costs only the state fee. But an LLC formation service can save you time and ensure nothing is missed, especially if paperwork isn’t your thing.
Most formation services charge $0–$150 on top of the state filing fee and handle:
We’ve reviewed the top services. Here’s a quick comparison:
See our full best LLC services comparison for detailed