How to Start an LLC
Starting an LLC generally involves choosing where to form, selecting an available business name, filing a formation document with the state, appointing a registered agent, organizing the company, and handling the tax, licensing, banking, and insurance steps that follow.
The exact process is state-specific. Use this guide as a roadmap, then verify each requirement with the official agency in your state.
1. Decide where to form the LLC
For many small businesses, the practical starting point is the state where the business is actually located and operates.
Forming in another state does not necessarily let you avoid registration in your home state. A business formed elsewhere may need to register as a foreign LLC where it actually conducts business, creating additional filings and costs.
If you are considering forming outside your operating state for legal or tax reasons, get qualified professional advice.
2. Choose an LLC name
Your state will have rules governing entity names. Typically, the name must be distinguishable from existing registered entities and include an LLC designation required by state law.
A state approving an entity name does not necessarily mean the name is available as a trademark, domain, social handle, or DBA everywhere you plan to operate.
Read How to Name Your LLC
3. Choose a registered agent
An LLC generally needs a person or company designated to receive official legal documents and state communications.
Requirements vary by state.
Read LLC Registered Agent
4. File the formation document
Most states create an LLC when an organizer files the required formation document and the state accepts it.
The document is often called Articles of Organization, although terminology differs.
Common information may include the LLC name, registered agent, principal or mailing address, management information, and organizer information. Do not assume every state asks for the same fields.
Read LLC Articles of Organization
5. Create an operating agreement
An operating agreement describes how the LLC will be governed internally.
It can address ownership, management, voting, distributions, member changes, decision-making, and dissolution. The importance of a carefully drafted agreement increases when multiple owners are involved.
State requirements vary, and a template may not fit every company.
6. Get an EIN if needed
An Employer Identification Number is a federal tax identification number issued by the IRS.
LLCs with employees and certain tax obligations need an EIN. Other LLCs may obtain one for banking or other business purposes even when federal rules would not otherwise require one.
Apply through the IRS, not through a website pretending to be the government.
7. Check licenses and permits
An LLC filing creates an entity. It does not automatically authorize every business activity.
Licenses and permits can depend on:
- • state
- • county
- • city
- • physical location
- • profession
- • products sold
- • services performed
- • regulated activities
Read Business License for an LLC
8. Register a DBA if you use another business name
If the LLC markets itself under a name other than its legal entity name, it may need a DBA, assumed-name, or fictitious-name registration.
9. Open a business bank account
A dedicated business account can simplify bookkeeping and help keep company finances separate from personal finances.
Banks set their own documentation requirements.
Read Business Bank Account for an LLC
10. Understand ongoing requirements
Formation is not a one-time "set it and forget it" event.
Depending on the state, an LLC may have annual or periodic reports, fees, tax registrations, license renewals, registered-agent requirements, or other obligations.
Read LLC Annual Report Requirements
11. Evaluate business insurance
The LLC structure and business insurance solve different problems.
An LLC can provide legal separation between company obligations and owners. Insurance can respond to covered losses and claims against the business.
Coverage needs depend on what your business actually does. Common categories include general liability, professional liability, commercial property, cyber insurance, workers' compensation, and commercial auto.
Start with Does an LLC Need Insurance?, then use What Insurance Does an LLC Need? to identify relevant coverage categories. If you're evaluating coverage as a newly formed LLC, see Insurance for a New LLC.
LLC startup checklist
Before you begin operating, verify:
- State formation accepted
- Registered agent in place
- Operating agreement addressed
- EIN obtained if needed
- DBA registered if applicable
- Licenses and permits checked
- Business banking established
- Accounting/tax setup addressed
- State recurring requirements calendared
- Insurance needs reviewed
Once these are checked off, see What to Do After Forming Your LLC for a closer look at the tasks that typically follow.
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