How to Form an LLC — The Complete 2026 Guide

To form an LLC in 2026, you complete six steps: pick a state, choose an available business name, appoint a registered agent, file Articles of Organization with the state, get an EIN from the IRS, and draft an operating agreement plus open a business bank account. The whole process takes 30 minutes of paperwork and 1 to 15 business days of state processing, and costs between $50 and $500 in state fees depending on where you file. This guide walks through every step end-to-end with the real numbers, the mistakes to avoid, and the post-formation checklist most guides skip.

Updated September 2026

TL;DR — the 6 steps in 60 seconds

1. Pick your state. Home state unless you are a foreign founder or a real-estate holder in a different state.
2. Choose a name. Search the Secretary of State database, confirm the .com is available, run a federal trademark check.
3. Appoint a registered agent. Yourself if you work from home and don't mind your address on the public record; a paid service ($99-$199/yr) otherwise.
4. File Articles of Organization. Online with the SoS; approval in 1-15 business days.
5. Get an EIN. Free at irs.gov, takes 8 minutes online with an SSN.
6. Draft an operating agreement and open a business bank account. Never commingle personal and business funds.

Then file your BOI report within 30 days and put annual report reminders on your calendar. That's it — every "LLC formation service" is doing the same six steps for you.

Step 1: Pick a state

The single most oversold decision in LLC formation is the state. The internet is full of "form in Wyoming for the anonymity" and "Delaware is the gold standard" content. For 90% of solo founders, both are wrong. If you live and operate in California, forming your LLC in Wyoming means you still register as a foreign LLC in California, pay California's $800 franchise tax, file California returns, and now pay Wyoming's $60 annual report on top. You have doubled your compliance for zero benefit.

The correct default is your home state — the state where you live, work, and take clients. Deep-dive on when to break that rule (foreign founders, real-estate holders, VC-track startups) at the best state to form an LLC guide. Special cases:

• Non-US founder: Wyoming or Delaware. See the Wyoming vs Delaware comparison.
• Real estate investor holding properties in multiple states: A parent holdco in Wyoming or Delaware with in-state subsidiaries for each property.
• Planning to raise venture capital: Delaware C-Corp (not LLC) is the ecosystem default.
• Everyone else: Home state, no exceptions.

Step 2: Choose a business name

Names are governed by three overlapping systems: state name availability, federal trademark, and domain/social handles. Any one can block you.

State name availability

Every state maintains a Secretary of State business entity database. Your proposed name must be "distinguishable on the record" — meaning no other entity in that state can be operating under the same or a confusingly similar name. Most states allow a name reservation for $10-$50 that holds it for 60-120 days while you file. Search the database directly rather than trusting a formation service's search — the databases update in real time and the services often show stale data.

Naming rules — the ones that trip owners up

Your LLC name must contain an identifier: "LLC", "L.L.C.", "Limited Liability Company", or state-specific variants. Restricted words include "Bank", "Insurance", "Trust", "University", and profession-specific words like "Attorney" or "Doctor" — those require regulatory approval or a PLLC filing (see PLLC vs LLC). Prohibited words vary by state but usually include "FBI", "Treasury", and anything implying government affiliation.

DBA (doing business as)

An LLC can operate under a name different from its legal name by filing a DBA (also called a fictitious name or trade name) with the state or county. Cost: $10-$100 depending on jurisdiction. Useful if you want "Anderson Consulting LLC" on legal documents but market as "Coastal Growth Advisors."

Federal trademark check

State name availability protects you inside that state's business registry. Trademark protects the actual commercial use of the name nationally. Run your name through the USPTO's TESS database (free) before you commit — a state-approved name can still get you a cease-and-desist from a federal trademark holder in the same industry. If you're building a brand you plan to scale, budget $250-$350 to file a federal trademark application (Class 035 for services, others for goods).

Step 3: Appoint a registered agent

Every LLC must have a registered agent — a person or company with a physical address in the state of formation who accepts legal service of process and official state mail on behalf of the LLC. Two paths:

Be your own registered agent

Free. Legal in all 50 states. You must have a physical street address (no PO boxes) in the state, be available during business hours (9-5 M-F), and be willing to have that address on the public state record forever. Fine for a founder who works from a commercial office. Not fine if you work from home and don't want your home address searchable by every marketer and process server.

Use a registered agent service

$99-$199/yr. The service's address goes on the public record, mail is scanned and forwarded to you same-day, and you can operate from anywhere. Northwest Registered Agent at $125/yr is the industry benchmark for privacy and reliability; ZenBusiness and Bizee include a first-year free RA that renews at $139-$199. See the head-to-head at IndustryADV vs Northwest Registered Agent.

Change your RA at any time by filing a Change of Registered Agent form with the SoS ($0-$50). The state controls who your RA is, not the service.

Step 4: File Articles of Organization

Articles of Organization (sometimes called Certificate of Formation or Certificate of Organization depending on the state) is the actual formation document. Every state accepts online filing through the Secretary of State's website. The document is short — usually one page — and contains:

• LLC name
• Registered agent name and address
• Principal office address
• Member/manager information (states vary on what's required)
• Purpose statement (often "any lawful business")
• Duration (usually "perpetual")
• Organizer signature

Filing fees by state (Articles of Organization + first annual report)

Processing times: same-day to 3 business days in most states with online filing. Expedited filing ($25-$100 extra) drops it to 24 hours. Paper filings still exist in some states and take 2-4 weeks.

Step 5: Get your EIN

An EIN (Employer Identification Number) is the tax ID for your LLC — the business equivalent of a Social Security Number. You need one to open a bank account, hire employees, elect S-Corp status, or file most tax returns.

How to get one

Free from the IRS at irs.gov/ein. Takes 8 minutes online if you have an SSN or ITIN. The system is open 7am-10pm ET Monday-Friday. You receive the EIN immediately upon completion. If you don't have an SSN (foreign founders), you file Form SS-4 by fax or mail and get the EIN in 1-4 weeks. Full walkthrough at the EIN guide.

Do not pay a service for this. Any company charging $50-$70 for an EIN is doing the same 8-minute IRS form you can do yourself.

Step 6: Operating agreement and business bank account

Operating agreement

An operating agreement is the internal governance document of your LLC — who owns what percentage, how profits are distributed, what happens if a member dies or leaves, how big decisions are made. Only five states legally require one (California, Delaware, Maine, Missouri, New York), but every LLC should have one. Reason: without a signed OA, courts default to state statute for how your LLC is run, and in a lawsuit, the absence of an OA is one of the factors judges use to "pierce the corporate veil" and treat your LLC as a sole proprietorship.

Single-member LLCs need one too, even though there's no one to negotiate with. See the single-member operating agreement template guide. Multi-member LLCs should not skimp — a $150 template is fine for simple splits; anything beyond 60/40 with vesting should involve an attorney.

Business bank account

Open the account within 30 days of formation. Requirements: EIN letter (CP 575 from the IRS), Articles of Organization stamped by the state, operating agreement, and government ID. Most banks now offer remote opening; Mercury, Relay, and Novo are the leading online options for LLCs and each opens accounts in under a week. Brick-and-mortar options (Chase, BofA, local credit union) require a branch visit.

The single most important rule after opening: never pay a personal expense from the business account, never deposit a personal check into it, and never move money between them without a documented reason. Commingling funds is the #1 reason courts pierce the veil.

What happens after you click "file" with the state

Most guides skip the state-processing black box. Here is what happens in the 1-15 days between hitting submit and receiving your stamped Articles:

1. Automated pre-check. The SoS portal validates that your name is distinguishable, the RA has a state address, and the required fields are filled. This is the fastest failure — you find out in seconds if the name is taken.
2. Payment settles. Credit card processing runs while the filing sits in queue. A declined card silently pauses your filing without notifying you in many states.
3. Human examiner review (most states). A clerk verifies name, RA validity, purpose statement, and signature. Common rejections: name too similar to an existing entity, PO box listed as RA, and organizer signature missing.
4. Approval and stamping. The state stamps your Articles with a filing number, effective date, and their seal. You receive a PDF (email states) or a mailed original (paper states).
5. Automatic listing in the SoS public database. Within 24 hours of approval, your entity is searchable at the state's business database. This is when data brokers scrape you.

Rejections are common (roughly 12-18% of first-time filings). The most frequent reason is a name conflict the filer's search missed because they used a formation-service search instead of the SoS directly. Fix: resubmit with a slightly modified name. Most states don't charge again for the resubmission but a few (Massachusetts, Alaska) do.

The BOI report — non-negotiable, easy to miss

The Beneficial Ownership Information report is a FinCEN filing required for every LLC formed after January 1, 2024. It lists the humans who own or control 25%+ of the entity, plus one "applicant" who filed it. Filing is free at boiefiling.fincen.gov and takes about 15 minutes.

Deadlines: 30 days from formation for entities formed on or after January 1, 2024. Entities formed before that had a January 1, 2025 deadline (now past — file immediately if you missed it). Any change to reported information (address, ownership change, new legal name) triggers a 30-day update deadline.

Penalty: $591/day, capped at $10,000, plus criminal penalties up to two years. FinCEN has been enforcing it since Q2 2024 and the volume of penalty notices is climbing quarter over quarter. There is no service required — do it yourself the day after your Articles are approved. Most formation services do not file this for you; a few (IndustryADV included) walk you through it as part of the post-formation call.

State-by-state processing speed

Processing time is one of the least-advertised variables. Fast states (Delaware, Colorado, Nevada) approve online filings same-day. Slow states (Arizona, Maryland, DC) take 2-4 weeks even for online submissions. Expedited service, where available, ranges from $25 (Illinois) to $1,000 (Delaware next-hour). Rough tiers:

• Same-day / 24-hour: Delaware, Colorado, Nevada, Wyoming, Kentucky, Ohio, South Dakota, Georgia.
• 2-5 business days: Texas, Florida, Illinois, Michigan, North Carolina, Pennsylvania, Washington, Tennessee.
• 1-2 weeks: California, New York, Massachusetts, New Jersey, Virginia.
• 2-4 weeks: Arizona, Maryland, DC, Oregon (paper filings), Alaska.

If you have a launch date or a bank meeting on the calendar, factor this in. Expedited is almost always worth it when the alternative is losing a week.

Common mistakes first-time founders make

1. Commingling funds. One Venmo transfer from the business account to your personal Venmo for "lunch" can undo the liability protection you paid for.
2. Forming in the wrong state. Wyoming or Delaware for a founder who lives and works in California doubles compliance for zero benefit.
3. Skipping the operating agreement. Especially for single-member LLCs — courts use its absence against you.
4. Missing the BOI Beneficial Ownership Information report. Required by FinCEN for LLCs formed after Jan 1, 2024. Penalty is $591/day.
5. Wrong tax election. Filing an S-Corp election too early (before you clear ~$60K in net profit) costs more in payroll compliance than it saves. See LLC vs S-Corp.
6. Using a home address as the registered agent when you don't want it public. That address goes on the state record and gets scraped by data brokers within weeks.
7. Not renewing the annual report. Miss the deadline and the state administratively dissolves your LLC — meaning you have no liability protection during the period of dissolution.

DIY vs done-for-you — a worked comparison

Worked example. Solo consultant in Colorado forming a single-member LLC. DIY route: Colorado SoS filing $50, EIN free from IRS, LLC Formation Kit for OA template $99 = $149 all-in. Time: 2-3 hours. Done-for-you route: IndustryADV Start Your Business flat $299 + Colorado $50 = $349 all-in. Time: 30 minutes on your end. Delta: $200 for someone else to run the paperwork, add a real operating agreement (not a template), guide EIN application, and give a post-formation call to explain BOI, taxes, and bank setup. For most owners, $200 is the correct trade for 2.5 hours plus certainty.

DIY makes sense when your state is low-fee, you are comfortable reading government websites, and you have time on your calendar. Done-for-you makes sense when your time is worth more than $75/hr, when you want the whole package (OA, EIN, RA, bank intro) in one flat price, or when this is your first entity and you want to avoid mistakes. Foreign founders should always go done-for-you — see foreign-owned US LLC.

Post-formation checklist

Once the state approves your filing, work through this list in order:

1. File BOI report with FinCEN within 30 days of formation. Free at boiefiling.fincen.gov. Skip = $591/day penalty.
2. Get EIN if you didn't already (Step 5).
3. Open business bank account (Step 6).
4. Sign operating agreement and store in the entity book alongside your Articles.
5. Register for state sales tax if you sell physical goods or taxable services in your state.
6. Register for state payroll tax if you plan to hire employees or elect S-Corp for yourself.
7. Buy general liability insurance — $30-$100/mo depending on industry. LLCs limit personal liability, not business liability.
8. Check for local licenses — city business license, county DBA, industry-specific permits.
9. Calendar the annual report for your state.
10. Set up bookkeeping from day one — QuickBooks, Wave, or a real bookkeeper. Do not wait until tax season.

Frequently Asked Questions

How long does it take to form an LLC?

Same-day to 3 business days in most states with online filing. Expedited service ($25-$100 extra) drops it to 24 hours. Paper filings in states that still require them take 2-4 weeks. Adding the EIN and bank account, plan on 5-14 days from start to fully operational.

How much does it cost to form an LLC?

State filing fees range from $35 (Montana) to $500 (Massachusetts), with a national average of $132. If you use a formation service, add $0-$399 on top. If you DIY, the state fee is your only cost. Annual costs are the annual report or franchise tax (from $0 in states like Ohio to $800 in California).

Can I form an LLC in a state I don't live in?

Yes, but you will still have to register as a "foreign LLC" in your home state and pay both states' fees. This makes sense for real estate holdings in that state or if you are a non-US founder without a home state, but not for a solo owner living and working in one state.

Do I need a lawyer to form an LLC?

No. Formation is a paperwork exercise. A lawyer is helpful for multi-member operating agreements with unusual splits, buy-sell provisions, or vesting; for reviewing complex client contracts; and for anything involving licensed professions. For a solo LLC with a straightforward setup, a lawyer is over-served.

What's the BOI report and do I need to file it?

The Beneficial Ownership Information report is a FinCEN filing required for all LLCs formed after Jan 1, 2024, due within 30 days of formation (older entities had a Jan 1, 2025 deadline). It lists the humans who own or control 25%+ of the LLC. Free to file at boiefiling.fincen.gov. Ignore it and the penalty is $591/day.

Should I elect S-Corp status right away?

No. The S-Corp election starts making sense at around $60K in net profit — below that, the payroll compliance costs outweigh the SE-tax savings. Form the LLC as a default (disregarded entity for single-member, partnership for multi), then file Form 2553 when you cross the threshold. See Form 2553 explained.

What's the difference between member-managed and manager-managed?

Member-managed: all owners participate in daily decisions. Standard for small operating businesses. Manager-managed: owners appoint one or more managers to run the business while the rest are passive. Standard for LLCs with silent investors, real-estate holdcos, or founder-plus-investor structures. Most single-member and small multi-member LLCs are member-managed.

Do I need a separate EIN for each LLC I own?

Yes. Each legal entity gets its own EIN. If you own three LLCs, you file Form SS-4 three times.

Can I be my own registered agent?

Yes, in all 50 states. You need a physical street address in the state (no PO boxes) and availability during business hours. The trade-off is your address goes on the public state record permanently.

What if my LLC name is taken?

Try a variation — add a geographic modifier, change the ordering, add a descriptor. If the exact brand you want is taken as an entity but not trademarked, you can file the LLC under a different legal name and register the brand as a DBA. Just make sure the brand you actually market with is trademark-clear.