TL;DR: To start an LLC in the US, pick a state (usually the one you operate in), choose an available name, appoint a registered agent, file Articles of Organization with the state and pay the filing fee, write an operating agreement, and get a free EIN from the IRS. State filing fees range from about $50 to $500; for example, California charges $70, Delaware $110, Florida $125, Texas $300 and Massachusetts $500. Budget for ongoing costs too, such as annual reports and, in California, a minimum $800 yearly tax. This is general information, not legal or tax advice.
Learning how to start an LLC is one of the first practical steps many freelancers, side hustlers and small business owners take once their income becomes real. A limited liability company can help separate your personal assets from business debts and gives you a more professional setup with clients and banks. The process is mostly paperwork, and you can often do it yourself in an afternoon. Here’s the step-by-step version.
What is an LLC?
An LLC (limited liability company) is a business structure created under state law. The US Small Business Administration describes it as combining features of a corporation and a partnership or sole proprietorship: owners (called members) generally aren’t personally liable for the company’s debts, while profits can pass through to their personal tax returns.
Limited liability isn’t absolute. Courts can hold owners personally liable in some situations, for example if business and personal funds are mixed together, so keeping them separate matters.
How to start an LLC in 7 steps
Step 1: Choose your state
Most small businesses should form in the state where they actually operate. Forming in another state (Delaware and Wyoming are popular for their business laws) usually means you also have to register as a “foreign LLC” in your home state, paying two sets of fees and filings. For a one-person online business, your home state is usually simplest.
Step 2: Pick an available name
Your name typically must include “LLC,” “L.L.C.” or “Limited Liability Company” and must be distinguishable from businesses already registered in your state. Search your secretary of state’s business database, and check that a matching domain and social handles are free. A trademark search is also wise if you plan to build a brand.
Step 3: Appoint a registered agent
Every LLC needs a registered agent with a physical address in the state to receive legal papers and official mail during business hours. You can usually act as your own agent, but many owners pay a registered agent service to keep their home address off public records.
Step 4: File Articles of Organization
This is the filing that creates your LLC. Depending on the state it may be called Articles of Organization, a Certificate of Formation or a Certificate of Organization. You’ll typically list the LLC’s name, address, registered agent and sometimes members or managers, then pay the state fee. Most states accept online filings.
Step 5: Create an operating agreement
An operating agreement sets out ownership percentages, how decisions are made, how profits are split and what happens if a member leaves. A few states require one, and even where it’s optional, banks often ask for it. It’s especially important for multi-member LLCs.
Step 6: Get an EIN
An Employer Identification Number is your business’s federal tax ID. The IRS issues EINs for free, and you can apply online. You’ll usually need one to open a business bank account, hire employees or file certain tax returns. Avoid sites that charge to “get” an EIN for you.
Step 7: Handle licenses, banking and compliance
- Check city, county and state requirements for business licenses, permits and sales tax registration.
- Open a business bank account and keep personal and business money separate.
- Note recurring deadlines: many states require annual or biennial reports with a fee.
- Some states have extra rules; New York, for example, requires new LLCs to publish a notice of formation in newspapers.
How much does it cost to start an LLC?
The main upfront cost is the state filing fee. Here are examples for common states, based on 2026 fee compilations from state secretaries of state. Always confirm on your state’s official site before filing, because fees change.
| State | Formation filing fee | Notes |
|---|---|---|
| Colorado | $50 | Online filing |
| California | $70 | Plus a minimum $800 annual franchise tax |
| Georgia | $100 online / $110 by mail | Expedite options cost extra |
| Delaware | $110 | Faster service available for added fees |
| Florida | $125 | $100 filing plus $25 registered agent designation |
| Texas | $300 | Certificate of Formation |
| Massachusetts | $500 | Among the highest in the country |
Other possible costs include a registered agent service (often around $50 to $300 a year), name reservation, business licenses, publication fees where required and optional legal or accounting help. California’s Franchise Tax Board explains its annual LLC tax and fee rules.
How LLCs are taxed
The IRS explains that an LLC’s default tax treatment depends on its number of members:
| LLC type | Default federal tax treatment | Option |
|---|---|---|
| Single-member | Treated like a sole proprietorship (“disregarded entity”); income reported on the owner’s return | Can elect to be taxed as a corporation |
| Multi-member | Treated as a partnership | Can elect to be taxed as a corporation |
Some profitable LLCs elect S corporation status to manage self-employment taxes, but that adds payroll and filing requirements. Talk to a tax professional before choosing.
Do you still need to file a BOI report?
Probably not if your LLC was formed in the US. In 2025, FinCEN issued a rule that exempts companies created in the United States and their owners from beneficial ownership information (BOI) reporting under the Corporate Transparency Act. According to FinCEN’s BOI page, the requirement now applies only to certain foreign companies registered to do business in the US.
Common mistakes to avoid
- Mixing money: paying personal bills from the business account can weaken liability protection.
- Forgetting annual reports: missed filings can lead to penalties or the state dissolving your LLC.
- Forming out of state for no reason: it often adds cost without real benefit for small businesses.
- Skipping the operating agreement: disputes between co-owners are harder to resolve without one.
- Paying for a free EIN: the IRS doesn’t charge for it.
Is an LLC right for you?
An LLC often makes sense once your business has real revenue, clients, contracts or risk, like a freelance agency, an online store or a growing YouTube channel or podcast with sponsors. If you’re still testing ideas from our list of online side business ideas, a sole proprietorship may be fine at first. Once money is flowing, free tools in our roundup of AI tools for small business can help with invoicing and admin.
Bottom line
Starting an LLC comes down to choosing a state and name, naming a registered agent, filing with the state, writing an operating agreement and getting a free EIN. The filing fee is often $50 to $300, but check annual costs in your state before you commit. For complex situations, such as multiple owners, investors or heavy liability, a short consultation with a lawyer or accountant is money well spent.
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