Complete guide to forming a Limited Liability Company in the United States. Protect your personal assets while enjoying business flexibility and tax benefits.
A Limited Liability Company (LLC) is a business structure that combines the simplicity of a sole proprietorship with the liability protection of a corporation.
Protect your personal assets from business debts and liabilities. Your personal property remains separate from business obligations.
Choose how you want to be taxed - as a sole proprietor, partnership, S-corp, or C-corp. Pass-through taxation is the default.
Fewer formalities than corporations. No required board meetings or complex record-keeping requirements.
Follow these 7 essential steps to form your LLC successfully
A registered agent is a person or business that accepts legal documents on behalf of your LLC.
The Articles of Organization is the legal document that officially creates your LLC.
While not required in all states, an Operating Agreement is crucial for defining how your LLC operates.
An EIN is required for tax purposes and to open a business bank account.
Separate your personal and business finances to maintain liability protection.
License requirements vary by business type, location, and industry.
Each state has different requirements and costs for forming an LLC
Understand all the costs involved in starting and maintaining your LLC
Serve as your own registered agent and draft your own operating agreement using templates.
Form in your home state unless you have specific reasons to form elsewhere to avoid foreign qualification fees.
Compare filing services, registered agent providers, and professional services to find the best deals.
Understand how your LLC will be taxed and your options
Taxed as a "disregarded entity" - profits and losses pass through to your personal tax return (Schedule C).
Taxed as a partnership - LLC files Form 1065, members receive K-1s for their personal returns.
Potentially reduce self-employment taxes. File Form 2553 within 75 days of formation.
Subject to corporate tax rates and double taxation. Less common for LLCs.
Avoid double taxation - business income is only taxed once at the personal level.
Deduct business expenses, including home office, business meals, and travel.
Distribute profits and losses among members based on your operating agreement.
Common questions about starting an LLC
Processing times vary by state, typically ranging from 1-4 weeks for standard processing. Many states offer expedited processing for an additional fee, which can reduce the time to 1-3 business days.
Yes, all 50 states allow single-member LLCs. You don't need partners or co-owners to form an LLC. Single-member LLCs provide the same liability protection as multi-member LLCs.
No, you can form an LLC yourself by filing the Articles of Organization with your state. However, consulting with a lawyer or accountant can be helpful for complex business structures or specific legal questions.
LLCs offer more operational flexibility, pass-through taxation, and simpler record-keeping requirements. Corporations offer better options for raising investment capital and going public but have more formalities and potential double taxation.
Yes, but it requires filing an amendment to your Articles of Organization with your state and paying a filing fee. You'll also need to update your business licenses, bank accounts, and other business documents.
While not legally required to form an LLC, business insurance is highly recommended. General liability insurance protects against claims, and professional liability insurance may be required for certain professions.
Yes, you can typically convert a sole proprietorship, partnership, or corporation to an LLC. The process varies by state and current business structure, and may have tax implications.
Failure to file required annual reports can result in late fees, penalties, and eventually administrative dissolution of your LLC. Requirements and deadlines vary by state.
Follow our step-by-step guide and start building your business with confidence. Protect your personal assets while enjoying the flexibility and tax benefits of an LLC.
Get your LLC approved in as little as 1-3 business days with expedited processing
Start your LLC for as little as $40-100 in state filing fees
Get professional help when you need it for complex situations