How to form an LLC with a registered agent, step by step

Choose your state

For most people the answer is simple: form your LLC in the state where you live and do business.

You've probably seen ads for forming in Delaware, Wyoming or Nevada because of low fees, privacy or business-friendly courts. The catch is that if you actually operate from another state, such as having an office, employees or regular in-person work there, you'll usually have to register your LLC in your home state too, as a "foreign LLC." That means paying two sets of state fees, keeping two registered agents and filing two annual reports.

Pick and check your name

Your LLC's name has to be distinguishable from other businesses already registered in your state, and it has to include a designator such as "LLC," "L.L.C." or "Limited Liability Company."

• Search your state's business database. Every Secretary of State website has a free business entity search.
• Avoid restricted words. Words like "Bank," "Insurance," "Trust" or "University" usually need special approval.
• Check trademarks and domains. A quick search on the USPTO trademark database and a domain registrar can save you a rebrand later.
• Reserve it if you're not ready. Most states let you reserve a name for a small fee, typically for 60 to 120 days.

If you'll trade under a different name than your legal one, you'll register a DBA ("doing business as," also called an assumed or fictitious name) after formation.

Appoint a registered agent

Every state requires your LLC to name a registered agent (some states say "statutory agent" or "resident agent"). The agent receives service of process, meaning lawsuit papers, along with official notices from the state, on your LLC's behalf.

Requirements in every state

• A physical street address in the state of formation. P.O. boxes aren't allowed.
• Someone available at that address during normal business hours.
• The agent must be an adult resident of the state, or a business entity authorized to act as an agent there.

Your three options

How to choose a registered agent service

• Same-day scanning and notification when documents arrive
• An online dashboard where you can see every document received
• Annual report reminders, and optional filing on your behalf
• Clear renewal pricing, with no surprise first-year discount that doubles in year two
• Coverage in every state, in case you expand and register elsewhere
• An optional business mailing address to keep your home address private

Many registered agent companies will also file your formation documents for you, either for a fee or bundled with the first year of agent service. That's convenient, but you can always file directly with the state yourself and just list the agent's name and address.

File your Articles of Organization

This is the document that actually creates your LLC. Depending on the state it may be called Articles of Organization, a Certificate of Formation or a Certificate of Organization. Most states accept online filing through the Secretary of State's website.

What the form usually asks for

• The LLC's name
• Your registered agent's name and in-state street address
• The principal office or mailing address
• Whether the LLC is member-managed or manager-managed
• The organizer's name and signature (the person filing, who doesn't have to be a member)
• In some states, the business purpose, members' names, or an effective date

Fees and timing

State filing fees range from about $35 to $500. Online filings are often approved within a few business days; mailed filings can take weeks. Many states offer expedited processing for an extra fee.

When the state approves your filing, you'll get a stamped copy or a certificate. Keep it with your company records; your bank will ask for it.

Write an operating agreement

An operating agreement is the internal rulebook for your LLC. Only a few states legally require one, including California, Delaware, Maine, Missouri and New York, but every LLC should have one, even a single-member LLC.

It's not filed with the state. It typically covers:

• Who owns what percentage and what each member contributed
• How profits and losses are split
• Who makes decisions, and how voting works
• What happens if a member leaves, dies or wants to sell
• How the LLC can be dissolved

A written agreement also strengthens your liability protection by showing the LLC is run as a separate business. Banks and lenders often ask to see it.

Get an EIN from the IRS

An Employer Identification Number is your LLC's federal tax ID, like a Social Security number for your business. You'll need it to open a bank account, hire employees and file business tax returns. Multi-member LLCs and any LLC with employees must have one; single-member LLCs need one in practice for banking.

Apply online at IRS.gov. It's free, takes about 15 minutes, and you receive your EIN immediately. Ignore websites that charge for this. Our EIN guide walks through every question on the application.

This is also the time to decide on tax classification. If you want your LLC taxed as an S corporation, file Form 2553 with the IRS, generally within two months and 15 days of the start of the tax year the election should take effect.

Open a business bank account

Keeping business money separate is the single most important habit for preserving your liability protection, and it makes bookkeeping and taxes far easier. Most banks will ask for:

• Your filed Articles of Organization
• Your EIN confirmation letter (IRS notice CP 575)
• Your operating agreement
• A government-issued photo ID for each signer

Run all business income and expenses through this account, and pay yourself through transfers labeled as owner draws or distributions.

Get licenses, permits and tax registrations

Forming an LLC doesn't automatically give you permission to operate. Depending on what you do and where, you may need:

• A city or county general business license
• A state sales tax permit, if you sell taxable goods or services
• State employer registrations for payroll withholding and unemployment insurance, if you hire
• Professional or occupational licenses for regulated trades
• Zoning or home-occupation permits if you work from home

Your state's small business portal and your local SBA office or Small Business Development Center can tell you exactly what applies.

Stay in good standing

Most states require an annual or biennial report, a short filing that confirms your address, members and registered agent, along with a fee. Some states also charge an annual franchise tax. Miss these and your LLC can be administratively dissolved, which can expose you personally.

• Put your state's report deadline on your calendar, or let your registered agent remind you
• Keep your registered agent current; if you change agents, file the change with the state
• File federal and state tax returns on time, including estimated quarterly taxes
• Update your operating agreement when members or ownership change