LLC Formation Process: Step-by-Step Guide

Forming an LLC is straightforward. This guide walks you through each step, from choosing your state to receiving your formation documents.

Formation Overview

Here's what the LLC formation process looks like at a high level:

1. Choose your state of formation
2. Name your LLC and check availability
3. Appoint a registered agent in your state
4. File Articles of Organization with the state
5. Create an Operating Agreement
6. Get an EIN from the IRS

The entire process can be completed in a few days to a few weeks, depending on state processing times.

Step 1: Choose Your State

First, decide where to form your LLC. The general rule: form in the state where you do business.

Exceptions:

• Online businesses with no physical presence can choose any state (Wyoming is popular for its low costs and privacy)
• International founders often choose Wyoming or Delaware
• VC-backed startups typically choose Delaware

For more details, see our guide on choosing a state.

Step 2: Name Your LLC

Your LLC name must be:

• Unique in your state (distinguishable from existing registered businesses)
• Include a designation like "LLC," "L.L.C.," or "Limited Liability Company"
• Not misleading (can't imply you're a government entity or use restricted words like "Bank" without approval)

To check name availability:

1. Search your state's business database for existing names
2. Check if the domain name is available (optional but recommended)
3. Consider a trademark search for broader protection

Step 3: Appoint a Registered Agent

Every LLC needs a registered agent: a person or company that receives legal documents on your behalf. Requirements:

• Must have a physical street address in the formation state (no PO boxes)
• Must be available during business hours to receive documents
• Can be you, another person, or a professional service

Most business owners use a registered agent service because:

• Your home address stays off public records
• You don't have to be available during business hours
• You won't miss important legal documents
• It's required if you don't have a physical address in the state

StartGlobal includes registered agent service with our formation packages.

Step 4: File Articles of Organization

The Articles of Organization (called Certificate of Formation in some states) is the document that officially creates your LLC. You file this with your state's business filing office.

Required information typically includes:

• LLC name
• Principal business address
• Registered agent name and address
• Purpose of the LLC (usually "any lawful purpose")
• Management type (member-managed or manager-managed)
• Name of the organizer (person filing)

Filing methods:

• Online: Most states accept online filings. This is the fastest option.
• Mail: Send paper forms to the state. Takes longer.
• In person: Some states allow walk-in filings for same-day processing.

Step 5: Create an Operating Agreement

An Operating Agreement is an internal document that outlines how your LLC operates. While not filed with the state, it's essential for:

• Defining ownership percentages
• Establishing management structure
• Setting profit distribution rules
• Protecting your liability protection
• Opening bank accounts (many banks require it)

Even single-member LLCs should have an Operating Agreement. It demonstrates your LLC is a legitimate separate entity, which helps protect your personal liability.

For details on what to include, see our Operating Agreement guide.

Step 6: Get Your EIN

An EIN (Employer Identification Number) is your business's tax ID. You'll need it to:

• Open a business bank account
• File business taxes
• Hire employees
• Work with vendors and clients

Getting an EIN is free. If you have an SSN, apply online at IRS.gov and receive your EIN immediately.

International founders without an SSN can apply by fax or mail. See our EIN without SSN guide.

After Formation

Once your LLC is formed, complete these tasks:

• Open a business bank account: Keep business and personal finances separate
• Get necessary licenses: Check local and industry-specific requirements
• Set up accounting: Track income, expenses, and prepare for taxes
• Understand compliance: Know your annual report deadlines and other requirements

Frequently Asked Questions