How to start an LLC: a simple step-by-step guide for 2026

Setting up a limited liability company is one of the first real decisions a new business owner makes, and it is less complicated than it looks. An LLC keeps your personal assets separate from the business, which is the main reason founders pick it over running as a sole trader. This guide walks through how to start an LLC step by step, what each stage costs, and where a formation service saves time over doing it yourself.

Why choose an LLC

An LLC gives you limited liability, so your house, car, and personal savings are generally protected if the business is sued or cannot pay its debts. It runs with less paperwork than a corporation, and profits usually pass straight to your personal tax return instead of being taxed twice. The US Small Business Administration has a plain comparison of the main business structures if you are still weighing an LLC against a sole proprietorship or a corporation.

Step 1: Pick your state

Most people form the LLC in the state where they run the business, which keeps things simple. Filing in another state like Delaware or Wyoming gets pitched for tax or privacy reasons, but if you operate elsewhere you usually have to register in your home state too and pay twice. Unless you have a specific reason, file where you live and work.

Step 2: Choose a name and check it is free

Your LLC name must be unique in your state and usually has to include “LLC” or “Limited Liability Company.” Search it against the state’s business registry before you commit, and confirm the matching domain and social handles are available while you are there. Most states let you reserve a name for a small fee if you are not ready to file yet.

Step 3: Appoint a registered agent

Every LLC needs a registered agent: a person or company with a physical address in the state who receives legal and tax mail for the business. You can be your own agent, but that puts your address on the public record and ties you to being available during business hours. Many founders use a registered agent service to keep their home address private and avoid missing a legal notice.

Step 4: File the formation documents

This is the step that legally creates the LLC. You file articles of organization with the state and pay a filing fee, which runs from roughly 50 to 500 dollars depending on where you are. Most states accept online filings and approve them within a few days. This is also where a formation service like ZenBusiness earns its fee: it prepares and submits the paperwork, can act as your registered agent, and flags the state-specific steps people miss, usually for a small charge on top of the state fee. Doing it yourself is cheaper. Using a service is faster and harder to get wrong.

Step 5: Get an EIN and open a business account

An EIN, or Employer Identification Number, is a federal tax ID for your business, and you need one to open a business bank account, hire staff, or file taxes. Form the LLC with your state first, then get the EIN directly from the IRS for free in minutes. Ignore any site that charges for this, since the IRS never does. With the EIN in hand, open a separate business bank account and keep business and personal money apart from day one, because mixing them is the fastest way to weaken the liability protection you just set up.

Step 6: Stay compliant after you form it

Forming the LLC is the start, not the finish. Most states want an annual or biennial report and a fee to keep the company in good standing, and some charge a yearly franchise tax. Depending on your industry and city, you may also need a business license, and you should check any current federal reporting that applies to new companies. Put the renewal dates in a calendar, since letting an LLC lapse usually costs more to fix than it did to file.

What it costs to start an LLC

The unavoidable cost is the state filing fee, which varies widely, plus any annual report or franchise fees your state charges. A formation service adds a package fee, and a registered agent service is a yearly cost if you use one. You can set up a basic LLC for the state fee alone by doing everything yourself, or pay a few hundred dollars total to have a service handle it. The EIN is always free from the IRS.

Your LLC formation checklist

To start an LLC:

• Choose the state where you run the business.
• Pick a unique name that meets your state’s rules and lock down the domain.
• Appoint a registered agent, yourself or a service.
• File the articles of organization and pay the state fee.
• Get a free EIN from the IRS and open a business bank account.
• Note your annual report and renewal dates so the LLC stays in good standing.

The legal setup is quick. Building a successful business on top of it is the part that takes years.

How to start an LLC: common questions

How much does it cost to start an LLC?

It depends on the state. Filing fees run from around 50 to 500 dollars, plus any annual report or franchise fees. A formation service adds its own package fee on top, while the EIN from the IRS is free.

Can I start an LLC myself, or do I need a service?

You can do it yourself by filing directly with the state, which is the cheapest route. A formation service is worth it if you want the paperwork handled, a registered agent included, and the state-specific steps checked, all for a fee above the state charge.

How long does it take to form an LLC?

In many states, an online filing is approved within a few days, and some offer expedited processing for an extra fee. Mailed filings take longer. Getting the EIN from the IRS afterward takes minutes online.

Do I need an LLC to start a business?

No. You can operate as a sole proprietor with no formal setup, but you get no liability protection, so your personal assets are exposed if something goes wrong. An LLC is popular because it adds that protection without the complexity of a corporation.