How to Start an LLC in 2026: Step-by-Step LLC Registration

Forming a limited liability company is the most common way for a US small business to separate its debts from the owner's house, savings and car. The process is run by your state, not the federal government, so fees and paperwork differ across the 50 states. This guide walks you through LLC registration from name search to first annual report, with fees checked against Secretary of State and revenue department sites in October 2026.

Quick answer

To start an LLC, pick an available name, appoint a registered agent and file articles of organization (called a certificate of formation in some states) with your Secretary of State. Then sign an operating agreement, get a free EIN from the IRS and open a business bank account.

• State filing fees run from $35 (Montana) to $500 (Massachusetts)

• The EIN is free on IRS.gov — never pay a site to get one

• US-formed LLCs no longer file BOI reports with FinCEN (permanent since August 2026)

• Budget for yearly costs: annual reports, franchise taxes or both

• Most owners can file online themselves in under an hour

What an LLC is and when it makes sense

An LLC is a business entity created under state law. Its owners, called members, are generally not personally liable for the company's debts or legal judgments, as long as they keep the business separate from their personal affairs.

For federal income tax, the IRS ignores a single-member LLC by default: profit flows onto your personal return on Schedule C, just like a sole proprietorship. An LLC with two or more members is taxed as a partnership by default. Either type can elect to be taxed as a corporation (and then as an S corporation) using Form 8832 or Form 2553.

That flexibility is why LLCs suit freelancers, shops, contractors, consultants and online sellers. It is less suitable if you plan to raise venture capital, where investors usually expect a Delaware C corporation.

LLC registration at a glance (2026)

$35 – $500

State filing fee range

Montana to Massachusetts

$0

EIN from the IRS

Free on IRS.gov

$800

California yearly minimum tax

Highest common annual cost

None

BOI report for US-formed LLCs

Final rule effective Aug 14, 2026

How to start an LLC: the 7 steps

The order matters. You cannot get an EIN before the state approves your LLC, and most banks will not open an account without both the approved filing and the EIN.

LLC registration step by step

1. 1

   Choose your state

   Form the LLC in the state where you live and do business. Forming elsewhere means registering as a foreign LLC at home too, and paying two sets of fees.

   Tip: Delaware or Wyoming rarely save money for a business that operates in one other state.

2. 2

   Pick and check a name

   The name must be distinguishable from existing entities on your state's register and usually must end in LLC, L.L.C. or Limited Liability Company. Words like bank or insurance need regulator approval.

   Check name rules first
3. 3

   Appoint a registered agent

   A person or company with a physical street address in the state who accepts lawsuits and official notices during business hours. You can be your own agent.

4. 4

   File articles of organization

   Submit the form online on your Secretary of State's portal and pay the filing fee. You'll list the name, registered agent, mailing address and whether the LLC is member- or manager-managed.

5. 5

   Sign an operating agreement

   An internal contract covering ownership percentages, voting, profit splits and what happens if a member leaves or dies. It is not filed with the state.

6. 6

   Get an EIN

   Apply free on IRS.gov once the state approves the LLC. Online applicants receive the number immediately.

   EIN step-by-step guide
7. 7

   Open a bank account and calendar your filings

   Use the approval document, EIN and operating agreement to open a business account. Then put the state's annual report and tax due dates in your calendar.

Choosing between member-managed and manager-managed

Most small LLCs are member-managed: every owner can run the business and sign contracts. Choose manager-managed when some members are passive investors, or when you want one person (who may not be an owner) to have authority. The choice goes on your articles in most states, so decide before you file.

How much does it cost to start an LLC? State fees compared

The state filing fee is the only cost you can't avoid. The bigger difference between states is often the yearly cost of keeping the LLC active, so compare both columns before you choose.

The SBA's general guidance is that registering a business usually costs less than $300 in total, and the table shows why the real answer is "it depends on your state". Fees change by statute, so confirm on your state's fee schedule on the day you file.

Worked examples: first-year cost

• Texas consultant, files herself, is her own agent: $300 filing + $0 franchise tax (revenue well under the threshold) + $0 EIN = $300.
• California online store: $70 filing + $800 annual tax (due by the 15th day of the 4th month after filing) + Statement of Information fee = roughly $890 before any local licenses.
• Massachusetts design studio: $500 to file, then $500 every year for the annual report = $1,000 over the first 12 months if the first report falls due.
• New York contractor: $200 + $50 certificate of publication + six weeks of notices in two newspapers. Newspaper rates vary widely by county, so get quotes before you file.

Want to see the full startup budget, not just state fees? Plug these numbers into the startup cost calculator.

Registered agent: do it yourself or hire one?

Every state requires an LLC to keep a registered agent with a street address in the state (a PO box doesn't qualify). The agent must be available during normal business hours to accept service of process, which is how you get sued, and official state mail.

Being your own agent is free and perfectly legal. It suits you if you work from a fixed address in the state. Hire a commercial agent if you work from home and don't want your home address on the public record, travel often, or formed the LLC in a state where you have no address (Delaware, for example). If your agent stops responding, the state can administratively dissolve your LLC after missed notices, and you can lose a lawsuit by default.

The operating agreement

Most states don't require you to file an operating agreement, and some don't require one at all. Write one anyway. A few states, including New York, make a written agreement a legal requirement, and banks, landlords and lenders often ask to see it.

For a single-member LLC, the agreement is your best evidence that the LLC is a real, separate business. That matters if a creditor ever argues they should be allowed to "pierce the veil" and reach your personal assets. For multi-member LLCs it prevents the disputes that sink partnerships: who contributed what, how profits are split, who can sign, and how a member is bought out.

EIN, bank account and taxes after approval

Once the state approves your filing, apply for an Employer Identification Number. The IRS says to form the entity with the state first, then apply. The online application is free and only available during set hours; our EIN application guide covers the exact hours, the responsible-party rules and what to do if you don't have an SSN.

A single-member LLC with no employees can legally use the owner's Social Security number for income tax. You still want an EIN: banks require it for a business account, it keeps your SSN off W-9 forms you hand to clients, and you'll need it for payroll or excise taxes later.

Then check what licenses your activity needs. Forming an LLC does not license you to trade. Cities, counties and state agencies issue those separately, as our business license guide explains. If you sell taxable goods, you'll also need a sales tax permit before your first sale.

BOI reporting: what changed in 2025 and 2026

Under the Corporate Transparency Act, LLCs were originally told to report their owners to FinCEN, the Treasury's financial crimes bureau. That changed twice:

BOI reporting for small LLCs

March 26, 2025

FinCEN interim final rule removes BOI reporting for all companies formed in the United States

April 25, 2025

Deadline for foreign-formed companies already registered in a US state

August 11, 2026

FinCEN announces a final rule making the domestic exemption permanent

August 14, 2026

Final rule takes effect; FinCEN says it will delete BOI already reported by US persons

If your LLC was formed under the law of any US state, you have nothing to file. If you see a letter or email demanding a BOI fee or filing, treat it as a scam. Only an entity formed under a foreign country's law and registered to do business in a US state still reports, and it does not need to report US-person owners.

LLC vs sole proprietorship

A sole proprietorship starts automatically when you trade under your own name; there's nothing to file except local licenses and perhaps a DBA. The LLC costs more but gives you a legal wall between business and personal assets.

LLC vs sole proprietorship

	Sole proprietorship	Single-member LLC
State filing	None (DBA if you use a trade name)	Articles of organization + fee
Personal liability for business debts	Yes, unlimited	Generally no, if formalities are kept
Default federal tax	Schedule C on your return	Same — disregarded entity
Self-employment tax	15.3% on net earnings	Same, unless you elect S corp status
Yearly state cost	Usually none	Annual report and/or franchise tax
Credibility with banks and clients	Lower	Higher

State filing

Sole proprietorship

None (DBA if you use a trade name)

Single-member LLC

Articles of organization + fee

Personal liability for business debts

Sole proprietorship

Yes, unlimited

Single-member LLC

Generally no, if formalities are kept

Default federal tax

Sole proprietorship

Schedule C on your return

Single-member LLC

Same — disregarded entity

Self-employment tax

Sole proprietorship

15.3% on net earnings

Single-member LLC

Same, unless you elect S corp status

Yearly state cost

Sole proprietorship

Usually none

Single-member LLC

Annual report and/or franchise tax

Credibility with banks and clients

Sole proprietorship

Lower

Single-member LLC

Higher

An LLC does not protect you from your own negligence or from loans you personally guarantee. Keep a separate bank account, sign contracts in the LLC's name ("Acme Design LLC, by Jane Doe, Member") and carry insurance.

Common LLC registration mistakes

• Paying for things that are free. The EIN costs nothing on IRS.gov, and many "compliance" letters mimic government notices.
• Forming out of state to save tax. You pay foreign registration fees at home anyway, and income is taxed where the work happens.
• Missing the first annual report or tax. California's $800 is due within about three and a half months of filing, and Florida adds a $400 late fee after May 1.
• Skipping New York's publication step. The LLC's authority to do business is suspended until the certificate of publication is filed.
• Mixing money. Paying personal bills from the LLC account is the fastest way to lose liability protection.

Your first-90-days LLC checklist

0/7

• Save the approved articles / certificate from the state
• Sign the operating agreement (all members)
• Get your EIN on IRS.gov and save the confirmation letter (CP 575)
• Open a business bank account in the LLC's exact name
• Apply for local business licenses and a sales tax permit if needed
• Diary the annual report, franchise tax and any publication deadline
• Issue invoices in the LLC's name

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Official links

Official LLC registration sources

• SBA — Register your businessLinks to every state's business registration office
• IRS — Limited Liability CompanyDefault tax classification and elections
• IRS — Get an EINFree online application
• FinCEN — BOI reportingCurrent status of beneficial ownership rules
• Delaware — LLC annual tax$400 tax, due June 1
• Texas — Form 205 instructionsCertificate of formation
• California FTB — LLC$800 annual tax and LLC fee

What to do next

Start with the name. Run your idea through the LLC name checker, or brainstorm options with the business name generator, then search your state's register and file. Once you have your EIN, create your first branded invoice with the free invoice generator.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much does it cost to start an LLC in 2026?

The state filing fee is the only unavoidable cost, and it runs from $35 in Montana to $500 in Massachusetts. Then budget for ongoing fees: annual reports or franchise taxes range from nothing in some states to $800 a year in California. The EIN is free, and you can be your own registered agent if you have an address in the state.

Can I start an LLC for free?

Not completely. Every state charges a fee to file articles of organization. What you can avoid is everything else: you can file yourself on the state website instead of paying a formation service, act as your own registered agent, write your own operating agreement and get an EIN directly from the IRS at no cost. That keeps total startup cost at the state fee.

How long does it take to form an LLC?

Online filings in many states are approved within a few business days, while mail filings can take several weeks. Delaware and New York sell expedited processing for an extra fee. After approval, an online EIN is issued immediately during IRS hours. Plan on one to three weeks from filing to an open business bank account, depending on your state.

Do I still need to file a BOI report for my LLC?

No, not if your LLC was formed in the United States. FinCEN's interim final rule of March 26, 2025 removed the requirement for US-formed companies, and a final rule effective August 14, 2026 made that exemption permanent. Only companies formed under foreign law and registered to do business in a US state still report, and only their non-US owners.

Should I form my LLC in Delaware or my home state?

For most small businesses, your home state is cheaper and simpler. If you form in Delaware but operate in, say, Ohio, you must also register as a foreign LLC in Ohio and pay both states' fees, plus Delaware's $400 annual tax and a Delaware registered agent. Delaware mainly helps companies planning to raise venture capital.

Is an LLC better than a sole proprietorship?

An LLC separates business debts and lawsuits from your personal assets, which a sole proprietorship does not. Taxes are usually the same at the start because a single-member LLC is a disregarded entity by default. The trade-off is cost and paperwork: state fees, annual reports and keeping business money strictly separate from personal money.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 7 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Register your business — U.S. Small Business Administration · accessed 7 October 2026
2. 2.Limited Liability Company (LLC) — IRS · accessed 7 October 2026
3. 3.Get an employer identification number — IRS · accessed 7 October 2026
4. 4.Beneficial Ownership Information Reporting — FinCEN · accessed 7 October 2026
5. 5.FinCEN Permanently Ends Beneficial Ownership Reporting Requirements for Millions of Small Business Owners — U.S. Department of the Treasury · accessed 7 October 2026
6. 6.Corporate fee schedule (August 2026) — Delaware Division of Corporations · accessed 7 October 2026
7. 7.LLC/LP/GP franchise tax instructions — Delaware Division of Corporations · accessed 7 October 2026
8. 8.Form 205 — Certificate of Formation, LLC (instructions) — Texas Secretary of State · accessed 7 October 2026
9. 9.Franchise tax — Texas Comptroller of Public Accounts · accessed 7 October 2026
10. 10.Limited liability company (LLC) — California Franchise Tax Board · accessed 7 October 2026
11. 11.Articles of Organization (Form LLC-1) — California Secretary of State · accessed 7 October 2026
12. 12.Certificate of Organization — Limited Liability Company — Secretary of the Commonwealth of Massachusetts · accessed 7 October 2026
13. 13.Limited Liability Company (Domestic) Articles of Organization (DOS 1336) — New York Business Express · accessed 7 October 2026
14. 14.Delaware HB 400: LLC annual tax rises from $300 to $400 — Delaware Inc. · accessed 7 October 2026