How To Start An LLC

L L C members happy after starting an L L C

Whether you're starting a new business or upgrading your current one, starting an LLC is the best way to protect your personal assets and add credibility to your small business. 

This guide will help make forming an LLC simple and easy.

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You can form an LLC yourself and save a little money or use a professional service and save a lot of time. 

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Starting an LLC is Easy

Whether you choose to learn how to form an LLC yourself or hire an online LLC service to do the footwork for you, it's really easy to start an LLC.

It’s easy to form a limited liability company (LLC) online yourself. Just follow these steps:

  1. Select Your State
  2. Name Your LLC
  3. Choose a Registered Agent
  4. File LLC Formation Documents
  5. Create an LLC Operating Agreement
  6. Get an EIN

Step 1: Select Your State

Step 2: Name Your LLC

You need the right business name in order to register your LLC with the state. Naming your new business goes beyond creative branding—you could have the catchiest name in Connecticut but if it isn’t unique and legal, you can’t use it.

In order to form an LLC successfully, you have to be sure no one else in your state is using your name and that it meets state guidelines.

Learn how to search if an LLC name is available and if it meets naming guidelines in our LLC name search guide.

If you need help coming up with a catchy name, try our business name generator. You can use this tool to generate both business names and domain names.

You can also search Godaddy for available domain names:

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Once you register a domain name for your LLC, consider setting up a business phone system to establish credibility and enhance your customer service. Nextiva provides a plethora of useful features and a quick, easy setup. Try Nextiva.

Step 3: Choose A Registered Agent

When you fill out your LLC registration forms, you'll need to list your registered agent in most states.

A registered agent is responsible for receiving important legal documents on behalf of an LLC. A registered agent’s most important job is to accept service of process (legal summons).

Many entrepreneurs choose to hire a registered agent service to help with this part of their business. You can also appoint a friend, colleague, or yourself. In most states, your registered agent must meet these requirements:

  • is 18 years or older
  • has a physical address in the state where business is conducted
  • is available (in person) during normal business hours

Recommended: Northwest Registered Agent offers a free year of registered agent service when you form your LLC ($39 plus state fees).

Step 4: File Your Articles of Organization

To form an LLC, you'll have to file your LLC formation documents with the state. These formation documents are called the Articles of Organization; in some states, they are known as the Certificate of Formation or Certificate of Organization.

Most states offer online filing. Each state charges a fee to process LLC applications.

To learn exactly how to complete this step for your LLC, just select your state.

Now is also the time to decide whether your LLC will be member-managed or manager-managed. Read our full guide on Member-Managed vs. Manager-Managed LLCs.

Step 5: Create an LLC Operating Agreement

Creating an LLC operating agreement is the only way for you and your members to legally define your roles and lock down your LLC’s management and ownership structure. Having this document in place will also give you something to return to if there’s a dispute.

An LLC operating agreement isn’t filed with the state — it’s stored in your company records. The operating agreement should outline:

To learn more, read our What is an LLC Operating Agreement guide. You can also download a template or create a custom Free LLC Operating Agreement using our online tool.

Step 6: Get an EIN

The Employer Identification Number (EIN) is basically a Social Security number (SSN) for your company. Your EIN allows the IRS to keep track of your business’s tax reporting.

You can easily get an EIN for free online through the IRS website. To learn more, read our What is an EIN guide.

Steps After Forming an LLC

Open a Business Bank Account

A business bank account helps separate personal expenses and company expenses, which is required to maintain your LLC's corporate veil.

Learn more by reading our guide to small business banking. For a multi-member LLC, you'll also want to set up capital accounts for members. We also recommend checking out our review of the best business bank accounts.

Get Insured

Depending on the type of business you’re operating, your insurance requirements and needs may vary. So, what is business insurance exactly? Business Insurance protects your business’s assets from losses that can happen naturally while doing business, such as property damage or lawsuits.

To learn more about the exact type of business insurance your startup will need, visit this guide on small business insurance or chat with our friends at Commercial Insurance.

Find out the real cost of getting insurance for your business. Get a free quote or call 855-602-1925.

Research Business Licenses and Permits

You'll need to research whether or not your LLC requires licenses and permits. Business licenses and permit requirements vary by state, so be sure to conduct the proper research and plan accordingly. 

Not sure where to start? Use our business license guide.

There are professional services that can take care of the paperwork and process for you. Check out our review of the Best Business License Services.

File Your LLC Annual Report

Many states require LLCs to file an annual report, which includes updating your registered agent address and paying your annual fee or franchise tax.

Visit our LLC annual report guide to learn more.

LLC Frequently Asked Questions

Is forming an LLC worth it?

Most small businesses will benefit from forming an LLC. LLC's offer: 

  • Limited liability protection
  • Simplicity
  • Credibility
  • Tax options

Learn more in our LLC Benefits guide.

Should I get an LLC for my small business?

An LLC is easy to set up, flexible, and straightforward. Additionally, an LLC gives you liability protection and pass-through taxation.

Read our full guide on how to choose a business structure to learn about other options.

Can I file for an LLC on my own?

Yes, you can start an LLC on your own by following our Form an LLC guide. You can also hire one of these Best LLC Services to form your LLC.

How much does it cost to start an LLC?

The cost of forming an LLC varies by state and depends on if you complete the process yourself or hire a professional service. LLCs can cost anywhere from $50 to $500. Hiring a formation company could add another fee between $40 and $350.

What are the advantages and disadvantages of an LLC?

LLCs protect their owners’ personal financial assets. They are also fairly simple to form and maintain.

If you are planning to raise capital, investors typically prefer the stock structure of a corporation.

Learn more in our LLC benefits guide.

Is an LLC easy to form?

Yes, LLCs are very easy to form. Every state, except for Maine, allows you to form your LLC online by completing a series of questions.

Our form an LLC guides will lead you through the process or you can hire an LLC service (for a very small fee) to form an LLC for you.

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