How to Form an LLC in 6 Simple Steps [2025 Guide]

Starting your own business brings excitement, but figuring out how to protect yourself and keep things simple can feel overwhelming. That’s where an LLC — or Limited Liability Company — comes in. An LLC is a legal business structure that shields your personal assets, offers tax flexibility, and allows for easy management without much of the hassle of other setups.

It’s a smart choice if you’re a freelancer, small business owner, or anyone looking to legitimize your side gig and reduce risk. Forming an LLC helps separate your personal finances from your business. You’ll get liability protection, possible tax breaks, and the freedom to run your business your way.

This post breaks down the whole process into six clear steps. No legal background or special skills needed — just follow along to set up your LLC quickly and confidently.

Step 1: Choose a Compliant Business Name for Your LLC

Picking your LLC name is more than getting creative with words—it’s the first piece of your brand puzzle. Your business name should reflect what you do, follow the rules set by your state, and be unique enough so no one confuses your LLC with someone else’s business. Let’s break down how to choose a name that meets the legal checklist and gives your company a solid start.

Understand State Requirements for LLC Names

Every state sets its own requirements for how you name your LLC. While most states ban names that are too similar to any existing registered business, there are also rules about which words you can use—and those you can’t.

• Your LLC name must include “LLC,” “L.L.C.,” or “Limited Liability Company.”
• Words like “bank,” “insurance,” or “university” could require extra paperwork or won’t be allowed.
• You can’t mislead customers by using words like “government” or “federal” unless you have approval.

To streamline your search and avoid surprises, review the specific rules for your state. For a detailed, state-by-state breakdown, see this guide on LLC Name Requirements by State.

Include “LLC” in Your Name

Your name has to make it clear that you’re structured as a limited liability company. Almost every state will require you to add “LLC” or the words “Limited Liability Company” to your business name.

This isn’t just a formality. Including “LLC” in your name signals to customers and partners that your personal assets are protected and that you operate under specific rules. If you’re wondering whether this is only for legal filings or your day-to-day brand too, check out the details at Do You Need to Include “LLC” in Your Business Name?.

Check That Your Name Is Available

Once you’ve picked a catchy (but legal) name, make sure no one else owns it. Most states let you search their business name database online for free. Here’s how you can check:

• Visit your Secretary of State’s website and search for your desired name.
• Try different versions or spellings to cover all your bases.
• Keep in mind: Two LLCs in different states can often have the same name, but confusion can hurt your business. Learn more about this situation in Can two businesses have the same name in different states?.

If your name is unique in your state, you’re set for the next step.

Make Sure a Matching Domain is Available

Before locking in your LLC name, make sure the matching website domain (your .com address) is also available. Having a business name without a matching domain can create confusion or drive customers to a competitor’s site. Try these quick checks:

• Search for your business name on domain registration sites like GoDaddy, Namecheap, or Google Domains.
• Consider slight variations if your dream domain isn’t available, but keep it simple and close to your official name.

Reserve Your Name (If Needed)

Some states let you (or require you to) reserve your name for a set period while you prepare your paperwork. If you’re not ready to file your full LLC application, look into the reservation process so no one snags your name in the meantime.

• You’ll usually pay a small fee.
• Reservations often last between 30 and 120 days.
• Check your state’s website for details on availability and fees.

Choosing the right LLC name helps set the tone for your business and keeps you compliant from day one. Following these steps gives your company the best shot at success—and avoids legal headaches down the road.

Step 2: Designate a Registered Agent

Picture your business as a house. Someone needs to be there to answer the door when important papers arrive. That’s exactly what a registered agent does. This step isn’t just red tape—choosing the right registered agent protects you from surprises and keeps your LLC in good standing with the state.

Photo by Pavel Danilyuk

A registered agent accepts legal papers, state notices, and tax documents on behalf of your company. This designated person or service makes sure you never miss a lawsuit notice or a crucial letter from tax authorities. Without a registered agent, you could risk fines or even losing your LLC status.

What Does a Registered Agent Do?

The registered agent is your LLC’s official point of contact with the government. They must be available during normal business hours at a physical address in your LLC’s state. Here’s what they handle:

• Accepting state and federal legal documents.
• Forwarding service of process (like lawsuit notices).
• Receiving state compliance information and reporting deadlines.
• Handling tax notices and annual filings.

Having this buffer keeps your personal info private—so process servers and tax notices don’t show up at your home or business front.

For a closer look at the registered agent’s responsibilities, check out this detailed guide on the registered agent role.

Who Can Be a Registered Agent?

You can appoint yourself, a friend, a family member, or a professional service. Here are the basic requirements in most states:

• Must be 18 or older.
• Must have a legal street address (not a P.O. box) in the state where your LLC is registered.
• Must be available during normal business hours.

While choosing yourself can feel simple, it also means giving up privacy and committing to being present at all times. If you’re busy, travel often, or run the business from home, you might miss important documents.

Learn more about who can serve as an agent by reading Who Can Be a Registered Agent?.

Should You Use a Registered Agent Service or an Individual?

Both options have upsides and drawbacks. Deciding between using a professional service or naming an individual comes down to your business needs and personal preferences.

Using Yourself or Someone You Know:

• Saves money (no extra fees).
• May offer more direct control.

But:

• Less privacy—your address becomes public record.
• You risk missing legal papers if you’re away or unavailable.

Hiring a Registered Agent Service:

• Keeps your address private.
• Never miss a document—professional agents always have someone on site.
• Helps you meet state rules, which can vary and sometimes change.

Most small business owners choose a professional service for peace of mind and privacy, especially if they don’t have a physical office.

For more details on what a registered agent service does and when you need one, visit What is a registered agent for an LLC?

Why This Step Matters

If your registered agent fails to receive an official notice, your LLC could lose its standing, face penalties, or default in a lawsuit. States use the registered agent as the official channel for communicating with your business—missing an important document can put everything at risk.

Choosing the right registered agent keeps your business safe, your filings up to date, and gives you confidence that nothing will slip through the cracks.

Step 3: File the Articles of Organization with the State

Once you’ve got your name and registered agent ready, it’s time to make your LLC official. You do this by filing Articles of Organization with your state government. Think of this step as setting your business in stone—the state won’t recognize your LLC until these forms are approved. The process isn’t hard, but each state has its own way of doing things.

You’ll need to fill out some basic paperwork (or online forms), provide some details about your business, and pay a filing fee. Some states also require steps like publishing a notice in the newspaper. Let’s make it clear so you can keep moving forward with no surprises.

Understanding State Variations in Filing: Compare costs and requirements across a few major states to show variability in the process

Every state asks for similar basics in the Articles of Organization—your LLC’s name, main address, registered agent, and details about how your company is managed. But the rest isn’t so uniform. Here are the key ways states differ:

• Filing fees: Costs can range from as low as $40 up to $500 or more. For example:
  • California: $70 filing fee (as of 2025), plus a $20 Statement of Information due within 90 days.
  • New York: $200 to file, and you must also publish a notice of your formation in two newspapers (cost varies by county).
  • Texas: $300 filing fee and no publication requirement.
• Processing times: Some states process LLC filings right away online. Others may take several weeks if done by mail.
• Publication requirements: Certain states such as New York and Arizona require you to publish a notice of your LLC formation in local newspapers—an extra step that can add cost and time.
• Required details: While some states keep it simple, others ask for initial member names, a business purpose, or a management structure. States like Michigan ask for slightly more, such as a business description right in the filing, as you can see on the Michigan government site.

Here’s a snapshot to help you compare:

For a complete list of all states’ fees and detailed steps, Nolo provides a helpful 50-State Guide to Forming an LLC. You can also explore this LLC State Information Map for detailed, state-specific guidance.

No matter where you register, expect to provide:

• Your LLC’s name and main address.
• The registered agent’s name and address.
• Manager/member information (if required in your state).
• The LLC’s main business purpose (sometimes optional).

Some states make you file by mail, but many now let you upload your paperwork and pay fees online. The U.S. Small Business Administration offers a straightforward guide to registering your business that walks you through these options and links you to your state portals.

The rules, fees, and steps can shift, so always double-check your state’s latest instructions. That way, your LLC filing goes through without a hitch and you can focus on actually running your business.

Step 4: Create an LLC Operating Agreement

An LLC operating agreement is the rulebook for your company. While some states don’t make it required, this document helps keep everyone clear on how the business works. It covers who owns what, how you’ll split the money, and how you’ll solve problems if they come up. Even if you’re a single-owner business, having these details in writing keeps hard feelings and confusion to a minimum.

Why an Operating Agreement Matters

Think of the operating agreement as a handshake in writing. The law might not force you to have one—but not having it means you risk misunderstandings down the road. This step is all about protecting your LLC and making your business run smoothly.

An operating agreement:

• Sets the ground rules so everyone knows what to expect.
• Protects your limited liability status by proving your business is separate from your personal affairs.
• Avoids state default rules that might not fit your needs.
• Makes closing or selling your business much easier.

For a deeper look, check out this reliable explanation of the importance of an LLC operating agreement.

Must-Have Elements in Your Operating Agreement

There’s no single right way to write an operating agreement, but most cover the same basic topics. Covering the essentials keeps your business safer and your team on the same page. Here’s what you should include:

Ownership Stakes

• List out all LLC members and the percentage each owns.
• Spell out what each person contributed (money, property, or work).

Management Roles

• Make clear who’s running day-to-day operations.
• Decide if one person manages everything (manager-managed) or if all owners have equal say (member-managed).
• Set rules for decision-making and voting.

Profit and Loss Sharing

• Decide how to split profits and losses—does it match ownership, or something different?
• State when and how you’ll make distributions.

Dispute Resolution

• Create a process for handling disagreements.
• Try to solve issues inside the company first, before turning to outside help.

Amending the Agreement

• Set out how the group can change the agreement in the future.
• Usually, a certain percent of members must agree.

For a checklist and sample language, the Small Business Administration shares basic operating agreement guidelines.

Real-Life Examples

Everyday business brings up questions—who gets paid first, what happens if someone leaves, or how to bring in new members. If these rules aren’t in your operating agreement, you’re stuck with your state’s default answers, which might not fit your plans. A strong agreement keeps your LLC out of court and your friendships intact.

To get sample agreements and a step-by-step walkthrough, visit this LLC Operating Agreement Guide.

Setting up a solid operating agreement helps your LLC feel real and keeps your business relationships stress-free as you grow.

Step 5: Obtain an EIN and Satisfy Federal & State Tax Registration

You’ve formed your LLC, but now it’s time to make it official in the eyes of the IRS and your state. This step sets you up for payroll, tax filings, and everyday business transactions. Getting your Employer Identification Number (EIN) and registering for any needed state taxes or licenses will keep your business running smoothly and legally.

Photo by Nataliya Vaitkevich

How to Get a Free EIN From the IRS

Your EIN is like a Social Security Number for your business. Most LLCs need one, even if you don’t plan to hire employees right away. Banks require it to open a business account, and vendors might ask for it on tax paperwork.

Getting your EIN is simple:

1. Go to the IRS EIN Application page.
2. Apply online—it’s fast and free. You can get your EIN immediately if you do this during IRS operating hours.
3. If you’d rather use paper, download Form SS-4 and fax or mail it in. It takes longer, but it’s straightforward.

You only need one EIN for your LLC. Double-check your info before submitting—typos can slow you down. The IRS has a full guide for steps to apply for an EIN.

Register for State Tax Accounts

Most states require you to register for state-level taxes. The type of registration depends on where you operate and what your business does. For example, if you sell goods or hire workers, you’ll handle different state tax accounts.

Here’s what to know:

• Sales tax accounts: If your business sells physical products or taxable services, you’ll need a sales tax permit. This allows you to collect tax from customers and send it to the state. State-by-state rules vary, so check local requirements. Read a helpful guide on sales tax permits.
• Employer tax accounts: If you plan to pay employees, you’ll register for state withholding and unemployment taxes.
• Other tax types: Some states charge franchise tax or annual business tax for LLCs.

States usually let you register online. Visit your Secretary of State’s website or use resources like the Small Business Administration’s registration guide.

Collecting Sales Tax and Your Permit

If you sell on the web or run a brick-and-mortar shop, you probably need a sales tax permit (sometimes called a seller’s permit). Without it, collecting sales tax is illegal—and you don’t want to get caught off guard by tax bills or fines.

Here’s how to get started:

• Apply through your state tax department. This process is often free or low-cost.
• Know your products or services. Some things are taxable, some aren’t. Your state’s tax office will list what’s included.
• File and pay collected sales tax on a set schedule (usually monthly or quarterly).

California and Texas explain their seller’s permit requirements online and Texas sales tax permit process, but every state is a little different.

Industry-Specific Licenses and Permits

Beyond your EIN and tax registrations, you may need extra licenses—especially if your LLC does business in food, construction, health, or another regulated field. Skipping these could mean costly penalties.

Common examples include:

• Local business licenses from your city or county.
• Zoning and home-based business permits.
• Professional or occupational licenses (for services like plumbing, childcare, law, etc.).
• Health or environmental permits if you handle food or hazardous materials.

The licenses you’ll need depend on your state, county, and industry. The Small Business Administration keeps a checklist with links to help you figure out what’s required for your line of work.

Taking care of this step helps you avoid common pitfalls, keeps your LLC running clean, and builds trust with customers and suppliers. Don’t let paperwork slow you down—get registered and move forward confidently.

Step 6: Maintain Compliance and File Required Reports

Staying compliant keeps your LLC active and protects your business from fines, penalties, or sudden dissolution. Once you’ve formed your company, the work isn’t over—you need to handle important filings, keep up with paperwork, and respond to any state or federal rule changes. Here’s how to stay on top of the most common ongoing requirements for your LLC, so you never miss a beat.

Most states require you to file an annual or biennial report for your LLC. This filing keeps your information current with the state and usually comes with a small fee. You’ll also need to pay franchise or business taxes if your state asks for them. Certain new federal rules, like reporting beneficial ownership to FinCEN, are now in effect and staying aware of local licensing rules is an ongoing task. Always keep your contact info up to date with the state, especially if you move or change registered agents.

Best Practices for Ongoing LLC Maintenance: Offer tips on recordkeeping, using a registered agent, and leveraging technology for reminders and document management.

Building good habits now can save you many headaches later. Here are proven tips for staying organized and compliant year after year:

• Stay on Top of Annual Reports: Mark your calendar with the due date for your state’s annual or biennial report. Most states let you file online, making it simple to update your info and pay fees. See this guide on filing an annual report for your LLC for a deeper look at the process.
• Pay Franchise and Business Taxes Promptly: Some states require extra business taxes known as franchise taxes. Missing a payment can lead to penalty fees or even an inactive status for your LLC.
• Keep Licenses Up-To-Date: Renew local, state, and federal business licenses as required for your industry. Set renewal reminders at least one month in advance. If your address or business activities change, notify all relevant departments.
• File Beneficial Ownership Reports: New federal rules require most LLCs to submit beneficial ownership information with FinCEN. Failing to report, or forgetting to update changes, can lead to big fines.
• Update State and Federal Records: If you add new members, change your business address, or switch registered agents, update the state immediately. Banks, vendors, and government agencies rely on this info to reach your business.
• Use a Reliable Registered Agent: A professional registered agent can help keep your business in good standing by alerting you to incoming legal documents and annual report deadlines. They serve as your official point of contact with the state, reducing the risk of missing important mail.
• Stay Organized With Proper Recordkeeping: Store your LLC’s paperwork—like your Articles of Organization, annual reports, tax filings, and business licenses—in a secure digital folder. Regularly back these up. Good records help you at tax time and if you ever face an audit or legal issue.
• Leverage Tech Tools and Reminders: Use calendar apps, cloud storage, and business filing services to track due dates and keep all documents in one place. Many filing services now offer automated reminders to help you file annual reports or pay taxes on time.

Here’s a quick routine to make ongoing compliance manageable:

1. Set monthly or quarterly check-ins to review paperwork and licenses.
2. Use software or apps to schedule key deadlines and document uploads.
3. Work with an accountant or legal pro as needed to stay current with any state or federal rule changes.

Reliable compliance routines protect your LLC and your peace of mind, letting you focus on running your business without distractions. For step-by-step help with filing specific annual reports, the Florida Division of Corporations gives good examples, and the Illinois Secretary of State offers another practical resource.

Staying organized and proactive can keep you out of legal trouble and your LLC moving forward with confidence.

Conclusion

Starting your LLC doesn’t have to feel overwhelming. Taking these six steps, one at a time, helps you build a strong business foundation and protects what you’ve worked so hard to create. An LLC shields your personal assets, keeps you flexible for growth, and gives your business a trusted status with vendors, banks, and clients.

Following the rules—like filing annual paperwork, updating information, and managing your records—goes a long way to keeping your company safe and on the right track. If your business needs get complicated or state rules change, don’t hesitate to ask for help from a legal or tax expert. Staying informed and prepared means you can focus less on paperwork and more on growing your business.

Thanks for reading—if you found these steps helpful, share your experience or tips below. Every business journey is unique, and your insights could help others take the next step with confidence.