How to form an LLC yourself — the eight steps, in order

Before you file: is an LLC the right wrapper?

An LLC does two things well. It separates business liabilities from your personal assets, and it gives you a clean entity to bank, contract, and invoice under. It is not a tax strategy in itself — by default a single-member LLC is taxed as a sole proprietorship and a multi-member one as a partnership, and your income taxes will look much the same on day one.

If you have no revenue, no contracts and no customers yet, the filing can usually wait. If you are signing anything, holding customer money, or working with anyone else, it usually should not.

The eight steps

1. Pick the state. For most small operators this is the state you actually live and work in. Forming in Delaware or Wyoming while operating elsewhere usually means registering as a foreign LLC in your home state anyway — two filings, two fees, two annual reports.
2. Check the name. Search your Secretary of State's business database, then check for a matching domain and a federal trademark conflict. Most states require an identifier such as "LLC" in the name.
3. Appoint a registered agent. A person or service with a physical street address in the state, available during business hours, to receive legal notices. You can be your own — the trade-off is that your address becomes public record and you have to be reliably reachable.
4. File the articles of organization. The actual formation document, filed with the Secretary of State, usually online. State fees commonly range from around $50 to several hundred dollars. Approval takes anywhere from minutes to a few weeks.
5. Get an EIN. Free, directly from the IRS, usually issued immediately online. Never pay a third party for this. You need it to open a bank account and to hire anyone.
6. Write an operating agreement. Not required by every state, and still the most important document you will produce. See below.
7. Open a business bank account. Bring the filed articles, the EIN letter and your ID. Do this before the first dollar moves.
8. Handle licences, permits and registrations. City or county business licence, sales tax registration if you sell taxable goods, professional licensing where it applies, and any beneficial ownership reporting currently required at federal level. Then diarise the annual or biennial report deadline.

The two mistakes that actually matter

1. Mixing personal and business money

The liability separation an LLC gives you depends on it being treated as a genuinely separate entity. Paying a personal bill from the business account, or vice versa, is the single most common way that separation gets challenged. One account, one card, and a transfer when you pay yourself. Nothing else.

2. Skipping the operating agreement

It is the document that says who owns what, who can sign, what happens if a member leaves, dies, or wants out, and how profits are split. Single-member LLCs skip it most often and need it more than they expect — banks ask for it, and it is the written evidence that the entity is real and separate.

What it costs, roughly

• State filing fee: commonly $50 to $500 once, depending entirely on the state.
• Registered agent: $0 if you serve yourself, or roughly $100 to $300 a year for a service.
• EIN: free from the IRS.
• Annual or biennial report: from nothing to a few hundred dollars a year, and a few states levy a separate franchise tax.
• Operating agreement: free if you write it, more if a lawyer does — and worth the lawyer once there is more than one owner.

The paid formation services largely resell steps 3, 4 and 5. They are convenient; they are not doing anything you cannot do from the same website they use.

After it is formed

Three habits keep it healthy: file the annual report on time, keep the registered agent address current, and keep the money separate. Almost every LLC that lapses does so because a report deadline slid past unnoticed — put it in a calendar the day you file, not later.

Common questions

Do I need a lawyer to form an LLC?

Not for a straightforward single-member filing — the steps are administrative and the state provides the forms. A lawyer earns their fee once there are multiple owners, outside investment, real estate, or a professional-licensing overlay, and an accountant is worth a conversation about tax election in year one.

Should I form my LLC in Delaware or Wyoming?

For most small operators, no. If you live and work in another state you will generally have to register there as a foreign LLC as well, which means two sets of fees, filings and annual reports for no practical benefit. Those states matter mainly for companies raising outside investment.

How much does it cost to start an LLC?

Typically the state filing fee, commonly between $50 and $500 depending on the state, plus an optional registered agent service at roughly $100 to $300 a year. The EIN is free from the IRS, and paying a third party for one is unnecessary.

Does a single-member LLC need an operating agreement?

Not in every state as a legal requirement, but practically yes. Banks often ask for it, and it is the written evidence that the business is a separate entity from you — which is exactly what the liability protection rests on.