How to Start an LLC in 2026: Six Steps and What It Really Costs

Most guides that explain how to start an LLC never tell you what it costs. They say fees vary by state and move on. Here is the number: it costs between $35 and $500 to start an LLC, and the median state charges $100.

An LLC, or limited liability company, is a business structure registered with a state that separates your personal savings, home and car from your business debts. Forming one takes six steps: pick your state, choose a name, name a registered agent, file your articles of organization, write an operating agreement, and get an EIN.

This guide walks through all six steps to start an LLC in order. Then it shows what you pay to file in real states, and what you pay every year afterward. That second number is the one that catches people out.

Key Takeaways

• Filing an LLC costs $35 to $500 depending on the state, and the median is $100.
• The six steps are the same everywhere: state, name, registered agent, articles of organization, operating agreement, EIN.
• Most owners file in the state where they actually work, not in Delaware or Wyoming.
• The yearly cost matters more than the filing fee. California charges $800 a year while Ohio, Missouri, Arizona and New Mexico charge nothing to stay registered.
• An EIN is free and is issued in minutes on the IRS website.
• Every state lets you file the paperwork yourself.

How to Start an LLC: The Short Answer

You start an LLC by filing one document with one state agency and paying one fee. Everything else is either preparation for that filing or cleanup after it.

The document is usually called the articles of organization. The agency is usually the Secretary of State. LLC registration happens at state level, so there is no federal LLC and no national registry to join.

Here are the six steps, in the order they actually depend on each other:

1. Pick the state where you will file.
2. Choose a name that state will accept.
3. Name a registered agent with a street address in that state.
4. File your articles of organization and pay the fee.
5. Write an operating agreement.
6. Get an EIN and open a business bank account.

Steps one through four create the company. Steps five and six are what make it usable.

Step 1: Pick the State Where You Will File

The first decision behind how to get an LLC is which state receives your filing, and for most owners it is barely a decision. Most people start an LLC in the state where they live and work.

Forming somewhere else does not move your tax bill and does not hide you from your home state. If you form in one state and operate in another, the second state generally requires you to register as a foreign LLC anyway. You then pay two filing fees, keep two registered agents, and file two annual reports for one business.

The states people ask about are Delaware, Wyoming and Nevada. Delaware genuinely suits companies raising venture capital and issuing stock. It also carries a mandatory $300 franchise tax every year, even though Delaware asks LLCs for no annual report at all. For a one-owner business operating in Ohio, that is $300 a year buying nothing.

Form where you operate. Every state in the fee table below links to a filing guide for that state. If your situation genuinely spans several states, best state to form an LLC covers the real exceptions.

Step 2: Choose a Name Your State Will Accept

Your LLC business name has to clear three tests before a state will register it.

First, it has to be distinguishable from every other entity already registered in that state. Close is not enough. If Summit Landscaping LLC exists, Summit Landscaping Co. LLC will usually be refused.

Second, it needs a designator. Most states require the name to end in LLC, L.L.C. or Limited Liability Company.

Third, it cannot imply something you are not. Words such as bank, insurance, university and trust are restricted in most states and need approval or a license.

Check availability before you get attached to a name. Every state lets you search its business entity register at no charge on the Secretary of State site, and it takes about two minutes. How to check if a business name is available walks through it.

Two things that search will not tell you. It will not tell you whether the matching domain is available, and it will not tell you whether someone holds a federal trademark on the name. Trademarks are searched separately in the federal trademark database, and a federal trademark can beat a state registration. LLC names covers naming strategy in more depth.

Step 3: Name a Registered Agent

Every state requires an LLC to name a registered agent: the business's official contact person for legal documents and state mail.

Anyone working out how to set up an LLC meets the same three rules here. The agent needs a physical street address in the state of formation. The agent needs to be available during normal business hours. A PO Box is not accepted anywhere.

That last rule causes more rejected filings than any other detail on the form. Mailbox services and virtual addresses are often refused for the same reason.

You can act as your own registered agent in every state, at no cost. The trade-offs are real, though. Your address becomes part of the public record, which means home-based owners put their home address into a searchable database. You have to be there during business hours. If you move, you file a change with the state.

Owners who travel, work from job sites, or run the business from home often use a commercial agent instead. Registered agent service covers what the role involves.

Step 4: File Your Articles of Organization

This is the filing that creates the company. Everything before it is preparation.

The form itself is short. Most states ask for the LLC name, the principal address, the registered agent's name and address, whether the LLC is member-managed or manager-managed, and a signature. Member-managed means the owners run it, which is the normal setup for a small business.

You file LLC paperwork with the state agency that handles business registrations, which is the Secretary of State in most places. Nearly every state now accepts the filing online, and online is usually faster.

Online is not automatically cheaper, and the gap runs both ways:

• Missouri charges $50 online and $105 on paper, so filing online saves $55.
• Massachusetts charges $500 by mail and $520 online, so paper is the cheaper route.
• Minnesota charges $135 by mail and $155 for expedited online filing.

Approval time depends on the state and on whether you paid to expedite. How long it takes to get an LLC has the current picture.

Keep the stamped copy the state sends back. Banks ask for it. Articles of organization covers the form field by field.

Step 5: Write an Operating Agreement

An operating agreement is the internal document that records who owns what, who decides what, and what happens when someone leaves.

Most states do not require you to file one. That is exactly why it gets skipped, and it is the most expensive omission in the whole process of how to form an LLC.

Without one, your state's default LLC statute fills the gaps. Those defaults were not written with your business in mind. They govern profit splits, voting rights and what happens to a departing member's stake, and they can divide profits equally between members who did not contribute equally.

Single-member LLCs benefit from one too, for a different reason. The agreement is part of the evidence that the company is genuinely separate from you. If that separation is ever tested, a business with no operating agreement, no separate bank account and no records looks a lot like a sole proprietorship in a costume.

Banks and investors ask to see it. Operating agreements covers what goes in one.

Step 6: Get an EIN and Open a Business Bank Account

There is no form called an LLC application. When people ask how to apply for an LLC, they mean the articles of organization from step four. The application that comes next is federal, and it is for an EIN.

An EIN, or Employer Identification Number, is the business equivalent of a Social Security number. You need one to open a business bank account, hire anyone, or file most business tax returns. A single-member LLC with no employees can technically use the owner's Social Security number, though most banks ask for an EIN regardless.

It is free. You apply directly on the IRS website and the number is issued immediately during the session, so there is no reason to pay anyone for one. EIN application walks through the form.

Then open the business bank account and run every dollar of business money through it. Mixing personal and business funds is the most common way owners quietly undermine the liability protection they just paid for. Business bank accounts for an LLC covers what banks ask for.

How Much Does It Cost to Start an LLC?

It costs between $35 and $500 to start an LLC, depending on the state. The median state charges $100. Montana is the cheapest at $35 and Massachusetts the most expensive at $500. That is the state filing fee only. Several states add a yearly cost larger than the fee you paid to file.

Read the second column, then read the third. They do not track each other at all. California has one of the lowest filing fees in the country attached to one of the highest yearly costs. Maryland costs $100 to file and $300 every year after that.

Your real LLC startup cost is the filing fee plus whatever the state charges to keep the company alive. In California that is $70 to file and $800 a year in franchise tax.

Some states also add requirements that never show up in a fee table. Budget for the items that are easy to miss:

• New York requires notice of formation to be published in two newspapers, with proof filed within 120 days. Publication rates are set locally, so the bill is far higher in the New York City counties than upstate.
• Arizona has a one-time newspaper publication requirement.
• Nevada charges a $150 initial list of managers and members within 30 days of forming, on top of a $75 filing fee.
• Tennessee charges $50 per member with a $300 minimum, so a four-person LLC pays more than a one-owner LLC.

LLC cost and LLC cost by state carry the full state-by-state numbers.

What Does It Cost to Run an LLC After You File?

Ongoing cost runs from nothing to $800 a year. Ohio, Missouri, Arizona and New Mexico charge no recurring fee to keep the LLC on the register. California charges an $800 franchise tax every year, Massachusetts $500, and Delaware and Maryland $300 each. Your first year is the filing fee plus the first of those yearly charges.

What you pay to start an LLC is a one-time bill. What you pay to keep it is not. The part of how to create an LLC that almost nobody covers is the maintenance, and there are three separate recurring costs that states mix differently.

The annual report. Most states want a short filing each year, or every two years, confirming your address and agent. It ranges from no fee at all in Mississippi to $500 in Massachusetts. Ohio, Missouri, Arizona and New Mexico do not require one.

Franchise tax. This is a charge for existing, owed whether or not the business made money. California's is $800 a year. Delaware charges $300 while asking for no annual report. Arkansas charges $150. Texas requires an annual franchise tax filing and a public information report despite having no annual report. Franchise tax explains who owes it.

Registered agent. No cost if you act as your own, an annual fee if you hire one.

Missing these is how business owners quietly fall out of good standing. States add late fees first, then administratively dissolve the company. LLC annual requirements has the calendar.

What an LLC Protects, and What It Does Not

A business does not become an LLC by calling itself one. People search for how to become an LLC, but a business becomes one only when a state approves the filing from step four.

What you get is limited liability, which caps your personal liability for what the business owes. If the business is sued or cannot pay a debt, the claim generally reaches business assets rather than your personal assets, meaning your savings, your home and your car.

What you do not get is a tax cut. This is the most common misunderstanding online. The IRS default is that a single-member LLC is a disregarded entity and a multi-member LLC is taxed as a partnership, so profits flow through to your personal return exactly as they did before. Same income, same self-employment tax.

Tax treatment can change, but that is a separate election rather than a consequence of forming. An LLC can elect S corporation treatment, which changes how owners take pay. Whether it saves anything depends on profit, and a CPA can confirm the numbers for your situation. S corp vs LLC covers where the threshold usually sits.

Protection has limits too. Personal guarantees on loans survive it, and so does your own negligence. Benefits of an LLC covers the full list.

Can You Start an LLC Yourself?

Yes. Every state lets you start an LLC yourself by filing your own articles of organization online, and most owners forming a single-member LLC do exactly that. You pay only the state fee. A formation service makes sense when you want the registered agent handled, the filing checked before it goes in, and the deadlines tracked for you.

You can set up an LLC online in an afternoon when the situation is simple: one owner, one state, a name that clears the search, and no objection to your own address on the public record.

Help is worth more when it is not simple. Several members with unequal contributions. A state with a publication requirement. A home address you would rather keep out of a public database. A contract that starts Monday.

Start your LLC with FormationHub and we file it, act as your registered agent, and track the state deadlines while you get on with the work.

Whichever route you take, the six steps to start an LLC do not change.

Disclaimer: FormationHub is not a law firm or an accounting firm, and this article is general information, not legal or tax advice. Filing fees, processing times, and state requirements change. Confirm the current requirements with your state's filing office or the IRS before you file, and talk to a licensed attorney or CPA about your specific situation.

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