Starting an LLC: Documents You Need
Quick Answer
To start an LLC, you need Articles of Organization filed with your state, an Operating Agreement defining member roles and ownership, an EIN from the IRS, and depending on your business, additional documents like business licenses, registered agent designations, and compliance filings.
Step-by-Step Guide
- 1Choose your state of formation and business name
Select the state where you will form your LLC. Most small businesses should form in their home state to avoid paying fees in multiple states. Search your state's business name database to ensure your desired name is available. Most states require the name to include "LLC" or "Limited Liability Company" and prohibit names that are deceptively similar to existing registered businesses. Consider reserving the name (typically $10 to $50) if you are not ready to file immediately.
- 2File Articles of Organization
The Articles of Organization (called a Certificate of Formation in some states) is the foundational document that legally creates your LLC. File it with your state's Secretary of State office. The filing typically requires: the LLC name, the registered agent's name and address, the principal office address, whether the LLC is member-managed or manager-managed, and the names of organizers or initial members. Filing fees range from $40 (Kentucky) to $500 (Massachusetts).
- 3Designate a registered agent
Every LLC must designate a registered agent who can receive legal documents and official correspondence on behalf of the company. The registered agent must have a physical address (not a P.O. box) in the state of formation and be available during normal business hours. You can serve as your own registered agent, use a member or employee, or hire a commercial registered agent service ($50 to $300 per year).
- 4Draft an Operating Agreement
While not filed with the state, the Operating Agreement is the most important internal document for your LLC. It defines: ownership percentages and capital contributions, profit and loss distribution, management structure and voting rights, member roles and responsibilities, procedures for adding or removing members, buyout provisions and transfer restrictions, and dissolution procedures. Without an Operating Agreement, state default rules apply, which may not align with your intentions.
- 5Obtain an Employer Identification Number (EIN)
Apply for an EIN from the IRS (free, available online at IRS.gov). An EIN is your LLC's federal tax ID number, similar to a Social Security number for a business. You need an EIN to open a business bank account, hire employees, file taxes, and establish business credit. Single-member LLCs without employees can use the owner's SSN but obtaining an EIN is still recommended for privacy and professionalism.
- 6Obtain required business licenses and permits
Research and obtain all required business licenses and permits for your industry and location. These may include: a general business license from your city or county, professional licenses (for attorneys, accountants, contractors, healthcare providers), sales tax permits if you sell taxable goods or services, industry-specific permits (food service, alcohol, firearms), and home occupation permits if operating from a residence.
- 7Open a business bank account and establish financial separation
Open a separate bank account in the LLC's name using your EIN. This financial separation is essential for maintaining the liability protection of the LLC. If you commingle personal and business funds, a court can "pierce the corporate veil" and hold you personally liable for the LLC's debts. Keep separate records for all business income and expenses.
- 8File any required initial reports and ongoing compliance documents
Many states require newly formed LLCs to file an initial report or statement of information shortly after formation (within 90 days in California, for example). Most states also require annual or biennial reports with filing fees ranging from $0 to $800. Mark deadlines on your calendar, as failure to file can result in penalties, administrative dissolution, or loss of good standing.
State-by-State Differences
| State | Key Difference |
|---|---|
| California | Filing fee is $70 for Articles of Organization. California imposes an $800 annual minimum franchise tax (Cal. Rev. & Tax. Code 17941) on all LLCs, even if they have no income. An initial Statement of Information must be filed within 90 days of formation ($20 fee), with biennial statements thereafter. California is one of the most expensive states for LLC maintenance. |
| Texas | Filing fee is $300 for the Certificate of Formation. Texas imposes a franchise tax on LLCs with revenue exceeding $2.47 million (as of 2024), with rates of 0.375% to 0.75% depending on the business type. An annual public information report must be filed. No state income tax applies to LLC members. |
| Florida | Filing fee is $125 for Articles of Organization. Florida requires an annual report filed by May 1 each year ($138.75 fee). Late filings incur a $400 penalty. Florida does not have a state income tax on individuals, making it attractive for single-member LLCs and partnerships. An Operating Agreement is not legally required but is strongly recommended. |
| New York | Filing fee is $200 for Articles of Organization. New York uniquely requires new LLCs to publish a notice of formation in two newspapers (one daily, one weekly) in the county of formation for six consecutive weeks (N.Y. LLC Law 206). Publication costs range from $300 to over $1,500 depending on the county (Manhattan is the most expensive). Failure to publish limits the LLC's ability to sue in New York courts. |
| Illinois | Filing fee is $150 for Articles of Organization. Illinois requires an annual report filed by the first day of the LLC's anniversary month ($75 fee). An Operating Agreement is required by statute (805 ILCS 180/15-5) for all LLCs, though it is not filed with the state. Illinois also requires a registered agent with a physical Illinois address. |
Common Mistakes to Avoid
Operating without an Operating Agreement
Consequence: Without an Operating Agreement, your LLC is governed by your state's default rules, which may not reflect your intentions for profit sharing, management authority, or dissolution. In disputes between members, a court will apply these default rules regardless of any verbal agreements. This is the single most common mistake new LLC owners make.
Commingling personal and business finances
Consequence: If you fail to maintain separate finances, a creditor or plaintiff can ask a court to "pierce the corporate veil," eliminating the LLC's liability protection and exposing your personal assets (home, savings, investments) to business debts and lawsuits.
Failing to file required annual reports and maintain good standing
Consequence: Most states will administratively dissolve your LLC for failure to file required reports. A dissolved LLC loses its liability protection, its legal authority to conduct business, and potentially its business name. Reinstatement involves additional fees and potential back-payment of all missed filing fees and penalties.
Forming in a "favorable" state (like Delaware or Wyoming) when you only operate in one state
Consequence: If your LLC only does business in one state, forming in a different state means you must register as a foreign LLC in your home state anyway, pay filing fees and annual reports in both states, and maintain a registered agent in both states. This doubles your compliance costs with no practical benefit for most small businesses.
Documents You'll Need
LLC Operating Agreement
Partnership Agreement
Non-Disclosure Agreement
Frequently Asked Questions
Related Guides
This website provides legal information, not legal advice. The information on this page is for general informational purposes only. No attorney-client relationship is formed by using this site. Laws vary by jurisdiction and change frequently. For advice specific to your situation, consult a licensed attorney in your state.