To start an LLC, you choose the state you'll form it in, check your name is free there, appoint a registered agent, file articles of organization with the state (usually the Secretary of State) and then get an EIN from the IRS. The SBA says registration costs are usually under $300, though the exact fee depends on your state.
An LLC is a state creation, not a federal one. The IRS says it's a business structure allowed by state statute and each state may use different regulations, so there's no single national form. What I can give you is the sequence every state follows, the federal pieces that sit on top, and one rule that changed this year that a lot of guides haven't caught up with.
The 7 steps to form an LLC
- Choose your state. SBA says you'll probably need to register in any state where you do business, for example where you have a physical presence, staff or a big share of your revenue.
- Pick a name and check it. Most states won't register a name someone else already holds, and many have rules on suffixes such as LLC.
- Appoint a registered agent. SBA says an LLC needs one in its state before filing; the agent receives official and legal papers and must be located in that state.
- File articles of organization with your state. SBA describes this as a simple document with the company name, address, member names and registered agent.
- Write an operating agreement. It sets out how decisions are made and each member's duties. SBA says it's widely recommended even where your state doesn't require one.
- Get an EIN from the IRS. SBA says most businesses need a federal tax ID, and you'll want one for a business bank account.
- Register for state taxes and get any licenses and permits your activity and location need.
If your LLC will do business in more than one state, there's an extra step. SBA calls it foreign qualification: you form in one state, then file a Certificate of Authority in each other state where you're active. It warns that foreign qualified businesses typically pay taxes and annual report fees in both places, so forming in a state you don't operate in can mean paying twice.
What filing costs, as of October 2026
SBA's guide says that in most cases the total cost to register your business will be less than $300, with fees varying by state and business structure. Foreign qualification adds a separate filing fee in each extra state. On top of state fees, some owners pay a registered agent service rather than act as their own agent; SBA notes many owners prefer that, but it isn't required.
How the IRS taxes your LLC
This is where people get surprised. Forming an LLC doesn't create a new tax category. The IRS gives LLCs a default classification based on the number of members:
| Your LLC | Default federal tax treatment | Can you change it? |
|---|---|---|
| One member | Disregarded entity: taxed as part of the owner's return | Yes, by filing Form 8832 to be treated as a corporation |
| Two or more members | Partnership | Yes, by filing Form 8832 to be treated as a corporation |
| Wants S corporation status | Not a default | File Form 2553 with the IRS, as SBA notes |
SBA also points out that LLC members are considered self-employed and pay self-employment tax towards Medicare and Social Security. If you're weighing that up, my comparison of S corp versus LLC for a small business goes through when the election makes sense. And the IRS says a classification election generally can't take effect more than 75 days before the date you file it, so don't leave it to the last week of the year.
The rule that changed: beneficial ownership reports
Here's the insight most LLC guides miss. SBA's registration page still describes beneficial ownership information (BOI) reporting to FinCEN with a March 21, 2025 deadline. FinCEN's own page now says that on August 11, 2026 it issued a final rule, effective August 14, 2026, under which U.S. companies are exempt from BOI reporting and no longer have to file BOI reports. Only certain foreign companies registered to do business in the U.S. still report. So a new LLC formed in a US state doesn't file a BOI report, and if a website or filing service tells you otherwise, it's working from old information.
Things that can't be LLCs, and who can own one
The IRS says most states don't restrict ownership, so members can be individuals, corporations, other LLCs and foreign entities, with no maximum number of members, and most states allow single-member LLCs. A few types of businesses generally can't be LLCs, such as banks and insurance companies.
If you're not a US resident, the same state steps apply, but banking and tax ID are harder: my guide to setting up a US LLC as a non-US resident covers that route. And if you're deciding whether you need an LLC at all, LLC versus sole proprietorship sets out what you gain and what you take on.
Your name isn't protected nationally by an LLC filing
SBA separates four kinds of name registration: entity name (state level), trademark (federal), DBA, and domain name. Registering your LLC protects the name in your state, not across the US. If the brand matters, check the USPTO trademark database before you file, not after you've printed the business cards.
Forming the LLC is only half of it, and our business license guide explains which licenses may apply on top.
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My verdict
Starting an LLC is mostly form-filling: name check, registered agent, articles of organization, operating agreement, EIN. Form in the state where you work unless you have a strong reason not to, budget for your state's filing fee, and don't pay anyone to file a BOI report for a US LLC. The decision that deserves your time is the tax one, so talk to an accountant before you file Form 8832 or 2553.
If you want to trade under a different name, our DBA guide explains how a DBA works alongside an LLC.
Frequently asked questions
How much does it cost to start an LLC?
As of October 2026, the SBA says the total cost to register a business is in most cases less than $300, but fees vary by state and business structure.
Do I need a registered agent for an LLC?
Yes. The SBA says an LLC needs a registered agent in its state before filing, and the agent must be located in that state.
What document forms an LLC?
Articles of organization, filed with your state. The SBA describes it as a simple document listing the company name, address, member names and registered agent.
Does a new LLC need to file a BOI report?
No, if it's a US company. FinCEN's final rule of August 11, 2026, effective August 14, 2026, exempts U.S. companies from beneficial ownership information reporting.
How is a single-member LLC taxed?
The IRS treats an LLC with only one member as a disregarded entity, part of the owner's return, unless it files Form 8832 to be treated as a corporation.
Do I need an operating agreement?
Not every state requires one, but the SBA says it's widely recommended to create one to protect yourself and your business.
Can I form an LLC in a different state from where I work?
You can, but the SBA says that if your LLC does business in other states you might need foreign qualification there, and you'd typically pay taxes and annual report fees in both.
