LLC Formation Checklist for Any State

#What forming an LLC actually does

A limited liability company is a state-law entity. It gives you two things:

1. Limited liability: the business’s debts and lawsuits don’t reach your personal assets. This assumes you maintain the corporate veil (see below)
2. Pass-through taxation by default: a single-member LLC is taxed as a sole prop. A multi-member LLC is taxed as a partnership. Either one can elect S-corp or C-corp tax treatment

That’s it. An LLC doesn’t make your business legal. It doesn’t get you a special tax rate. It just creates a separate legal person. That person owns the business assets. It signs the contracts. It stands between your personal life and the business’s liabilities.

#The 6-step checklist

#Step 1: Pick your formation state

For most owners, form in the state where you actually do business. Say you live in Texas and serve Texas customers. Then form a Texas LLC. The exceptions are narrow:

• Delaware: only worth it if you’re VC-track and your investors expect Delaware C-corps. In that case you’re not forming an LLC anyway
• Wyoming / Nevada: privacy-conscious owners sometimes form here. But you’ll still need to register as a foreign LLC in your home state, which doubles the cost
• Texas LLC for non-Texas business: not worth it. A Texas LLC formed in another operating state still pays Texas franchise tax

Default: home state.

#Step 2: Name the LLC + check availability

LLC names must include “LLC” or “Limited Liability Company” (or a state-specific variant). Most states have an online name-availability search.

Naming tips:

• Keep it simple, professional, descriptive (or distinctive, both work)
• Search trademark database (uspto.gov) to make sure you’re not infringing
• Reserve the domain (yourbusiness.com) before filing, names get taken
• For multi-state operations, check name availability in every state you’ll register in

Many states allow you to reserve a name for 60-120 days before filing. Useful if you want to lock in the name while you finalize the rest.

#Step 3: File articles of organization

The “articles of organization” is the document that creates the LLC (some states call it a “certificate of formation”). It’s short, usually 1-2 pages. It includes:

• LLC name + address
• Registered agent (person or company who receives legal documents on the LLC’s behalf)
• Management structure (member-managed vs. manager-managed)
• Effective date
• Filing fee (varies by state. TX is $300, DE is $90, CA is $70, FL is $125)

Filing methods:

• Direct with the state Secretary of State (cheapest; state filing fees run from about $35 to $500, depending on your state. Check your state’s fee page. A few states, like New York, also make you publish a notice of your new LLC.)
• LegalZoom / ZenBusiness / Northwest ($79-$299 + state fee, faster + some extras)
• Through an attorney ($500-$1,500 + state fee, useful for complex operating agreements)

Registered agent decision:

• You can be your own registered agent (free, but your home address becomes public record)
• Use a paid service ($75-$200/yr) if you don’t want your address public, or if you travel and can’t reliably get legal mail
• Most attorney-firm formations include first-year registered agent service

After filing, the state returns a stamped articles of organization, usually within 1-7 business days. Keep this document. It’s your proof of formation.

#Step 4: Get an EIN

The Employer Identification Number is the LLC’s federal tax ID. You need it to:

• Open a business bank account
• Hire employees
• File the S-corp election

You need an EIN to open most business bank accounts and to hire employees. Multi-member LLCs need one too, and so do LLCs taxed as S-corps, for their own returns. A single-member LLC with no employees usually does not file its own income tax return.

Apply at irs.gov/ein. Free, takes 10-15 minutes online. You get the EIN immediately. Save the IRS-issued EIN confirmation letter (CP575G).

Most owners try to apply for an EIN before the LLC is formed. Don’t do that. The IRS application asks for your LLC’s legal name and state-issued formation date. You need the articles of organization first.

#Step 5: Draft an operating agreement

The operating agreement is the contract between the LLC’s members (owners) and the LLC itself. It governs:

• Ownership percentages
• Profit / loss allocation
• Management decisions
• Voting rights
• Capital contributions
• Distribution policy
• Buyout / exit provisions
• Dissolution procedures

Most single-member LLC owners think they don’t need one. They’re wrong. Even a single-member operating agreement:

• Reinforces the corporate veil (limits piercing)
• Establishes how the business operates
• Required by some banks for account opening
• If you elect S-corp status, match your operating agreement to it. For example, allow only one class of ownership

For multi-member LLCs, the operating agreement is non-negotiable. Without a written agreement, disputes between members get expensive fast.

Templates exist (LegalZoom, Northwest, attorney templates online). For most single-member LLCs, a template is enough. For multi-member LLCs with serious capital or uneven contributions, hire an attorney.

#Step 6: Open a business bank account

Once you have:

• Articles of organization
• EIN
• Operating agreement

…you can open a business bank account. Keep business and personal money apart. Mixing them is one of the main things a court looks at, if someone tries to reach your personal assets. It can put your liability protection at risk.

Bank recommendations:

• Relay for most small businesses (many sub-accounts and free incoming wires; check Relay’s site for current fees)
• Bluevine for owners who want yield on operating balances
• Chase / BoA if you need physical branch banking and don’t mind monthly fees

See our Relay vs. Bluevine comparison for the full breakdown.

#BOI / FinCEN reporting: no longer required for U.S. LLCs

#Common post-formation decisions

After steps 1-6, three more decisions usually come up in the first 30-90 days:

S-corp election. Many owners look at this once profit passes about $80,000. Run the numbers first. You must file Form 2553 within 2 months and 15 days of the start of the year you want it to take effect. If you miss it, relief may be available, but it is not automatic. See our S-corp election article for the mechanics.

B. State sales tax registration. If you sell taxable goods or services, register with the state sales tax authority. Threshold and rules vary widely.

C. Local business licensing. Some cities require a business license. Some don’t. Check with your city’s business-services department.

#Common pitfalls

1. Using a “DBA” instead of an LLC. A DBA (doing business as) is just a name registration. It gives you no liability protection. For liability protection, you need the actual LLC.

2. Not opening a separate bank account. Commingling funds pierces the corporate veil. That means lost liability protection.

3. Skipping the operating agreement. This matters most in multi-member LLCs. Disputes get expensive without one.

4. Choosing the wrong state for the wrong reason. Wyoming or Nevada LLCs for non-residents mean paying double fees. You also deal with foreign-LLC registrations in your home state.

5. Filing S-corp election too early. S-corp election requires payroll. If your net income is under ~$80K, S-corp election creates more cost than savings. Wait until the math works.

#What we do when you engage

For a business formation engagement, our standard workflow:

1. Discovery call: confirm LLC is the right structure (vs. sole prop, partnership, or C-corp); model whether S-corp election will be needed in year 1
2. State filing: articles of organization filed in your state of operation
3. EIN application: done correctly (responsible party, business activity code, fiscal year)
4. Standardized operating agreement template: we’re not attorneys and don’t draft custom legal docs. You’ll walk away with a defensible template. Use it as-is, or clean it up with an attorney later
5. Business bank setup: usually with Relay (online business banking that plays well with our bookkeeping workflow)
6. Bookkeeping setup: chart of accounts, bank feed connected, separation-of-funds discipline locked in from day one
7. 1-hour LLC Mastery consultation with our managing partner: what to do, what to avoid, year-one compliance rhythm, and where the eventual S-corp election conversation fits
8. Registered agent service: first year free; $300/year thereafter (for Texas entities, the $300 also covers your annual PIR filing)
9. S-corp election (if applicable), Form 2553 filed in same engagement

Pricing: $2,250 for the full LLC formation engagement above. Add S-corp election and payroll setup, and it’s $4,000. See business formation pricing for the full breakdown.

If you need ongoing support after formation (advisory, bookkeeping, tax prep), that’s a separate engagement we can talk through.

#Common questions

Can I form an LLC online myself? Yes. LegalZoom, ZenBusiness, Northwest, and direct-with-the-state options all work for simple cases. Most DIY filers make one mistake. They stop after step 3 (articles of organization) and skip steps 4-6.

How long does formation take? 1-7 business days for the state filing in most states. Some states offer rush filing for an extra fee: in Texas it is $25, in California it costs several hundred dollars. Check your state’s fee page. EIN is immediate via online application. Bank account opening adds another 1-3 business days.

How much does an LLC cost? First year: about $100 to $600 in most states. A few states cost much more: California adds an $800 yearly tax, and Massachusetts charges $500 to file and $500 a year. Check your state’s fee page before you file. Texas: every Texas LLC must file a Public Information Report (PIR) each year, even if it owes no tax. Say your revenue is under the state’s no-tax-due limit. Then you owe no franchise tax, and you skip the full tax report. You still file the PIR, though. Skip that, and the LLC can lose its good standing. See your Texas LLC’s first annual report for when the first one is due.

Do I need an attorney to form an LLC? For a single-member LLC with a template operating agreement: no. For multi-member LLCs with custom terms, equity structures, or complex buyout provisions: yes.

Can I move my LLC to another state later? Yes. The legal process is called “domestication” or “conversion.” It transfers the LLC from one state to another. Most states allow it. Some don’t, and you have to dissolve and re-form instead. It costs $200-$500 plus filing fees.

What if I form an LLC but never have business activity? You still owe state annual fees, and franchise tax where it applies, every year. It doesn’t matter how active the LLC is. Dissolve it if you’re not going to use it.

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Are you considering forming an LLC? Or did you form one and realize you never finished steps 4-6? Either way, the Discovery call is the right next step. We handle the full formation as part of the Business Formation service.