How to Form an LLC: State-by-State Guide

What Is an LLC?

A Limited Liability Company (LLC) is a business structure that combines the liability protection of a corporation with the simplicity and tax flexibility of a sole proprietorship or partnership. As an LLC owner (called a "member"), your personal assets — like your home, car, and savings — are generally protected from business debts and lawsuits.

LLCs have become the most popular business structure in the United States, and for good reason: they're relatively simple to form, inexpensive to maintain, and offer significant legal and tax advantages.

Step 1: Choose Your State

You can form your LLC in any state, but most small business owners file in the state where they'll be conducting business. If you form in a different state (like Delaware or Wyoming for their business-friendly laws), you may still need to register as a "foreign LLC" in your home state, which means extra paperwork and fees.

Key considerations:

• Filing fees vary from around $40 (Kentucky) to $500 (Massachusetts)
• Some states charge annual fees or franchise taxes
• Delaware and Wyoming are popular for their strong privacy protections and flexible LLC laws
• If you only do business in one state, file there

Step 2: Name Your LLC

Every state requires your LLC name to include "LLC" or "Limited Liability Company." Beyond that, the name must be distinguishable from other business entities registered in your state.

Tips for choosing a name:

• Search your state's business name database to check availability
• Consider reserving the name if you're not ready to file immediately (most states allow 60–120 day reservations)
• Check if the matching domain name is available for your website
• Make sure the name doesn't infringe on existing trademarks (search at USPTO.gov)

Step 3: Choose a Registered Agent

Every LLC must designate a registered agent — a person or company authorized to receive legal documents, tax notices, and official correspondence on behalf of your business. Your registered agent must have a physical address (not a P.O. box) in the state where your LLC is formed and must be available during normal business hours.

You can serve as your own registered agent, but many business owners prefer to use a professional registered agent service for privacy and reliability.

Step 4: File Articles of Organization

The Articles of Organization (called a Certificate of Formation in some states) is the document that officially creates your LLC. You file it with your state's Secretary of State office. Most states allow online filing.

Information typically required:

• LLC name and address
• Registered agent name and address
• Names of organizers or members
• Whether the LLC is member-managed or manager-managed
• Effective date (you can choose a future date in most states)

Step 5: Create an Operating Agreement

While not always legally required, an operating agreement is a critical internal document that outlines how your LLC will be run. It covers ownership percentages, voting rights, profit distribution, and procedures for adding or removing members.

Even single-member LLCs should have an operating agreement — it strengthens your liability protection by showing that your LLC operates as a separate entity from you personally.

Step 6: Get an EIN

An Employer Identification Number (EIN) is a federal tax ID number assigned by the IRS. You need one if your LLC has more than one member, has employees, or is taxed as a corporation. Even single-member LLCs benefit from having an EIN — it keeps your Social Security number private and is required to open a business bank account.

Step 7: Open a Business Bank Account

Keeping personal and business finances separate is essential for maintaining your LLC's liability protection. Open a dedicated business checking account and use it for all business transactions.

What Comes Next?

After forming your LLC, stay compliant by filing annual reports (required in most states), maintaining your registered agent, and keeping your operating agreement up to date. Some states also require you to publish a notice of formation in a local newspaper.

FormationHub can help you with every step — from filing your Articles of Organization to ongoing compliance services.