Starting an LLC is mostly paperwork, and none of it is hard once you see the whole path. There are seven steps: choose a state, choose a name, appoint a registered agent, file the Articles of Organization, write an operating agreement, get an EIN, and open a business bank account. The state fees average $220 in Year 1 across the US (median $160), and most founders finish the actual work in a single afternoon — the rest is waiting on the state to approve the filing. Here is each step, in order, with what it costs and where people go wrong.
On this page:
- Step 1: Choose your state
- Step 2: Choose a business name
- Step 3: Appoint a registered agent
- Step 4: File the Articles of Organization
- Step 5: Write an operating agreement
- Step 6: Get an EIN (free)
- Step 7: Open a bank account and stay compliant
- What does it cost in total?
- Frequently asked questions
Step 1: Which state should you form your LLC in?
For most people the answer is simple: your home state — the state where you live and actually run the business. An LLC is a state creation, and if you form in one state but operate in another, you must register as a "foreign LLC" in the state where you operate and pay that state's fees on top. That erases most of the savings from chasing a cheap state.
Forming out of state only tends to make sense if your business is genuinely location-independent (no office, no employees, no in-person operations in your home state) or you have a specific reason — Wyoming's privacy and lack of state income tax, for example, or Delaware for startups planning to raise venture capital. Our guide to the best states to form an LLC ranks all 51 jurisdictions by cost, taxes and privacy, and the foreign LLC registration guide explains the two-state trap in detail.
Before you decide, look at your own state's real numbers: filing fees run from $35 in Montana to $500 in Massachusetts, and the recurring fee matters more than the filing fee. Compare every state on the LLC cost by state index, or run the free LLC cost calculator for your exact Year 1, annual and 5-year totals.
Step 2: How do you choose an LLC name?
Your name must include a designator like "LLC" or "Limited Liability Company", and it must be distinguishable from other businesses already registered in your state — "Smith Consulting LLC" and "Smith Consulting Group LLC" may be too similar, depending on the state. Most states offer a free online name search on the Secretary of State website (every state page on this site links the official filing site), and many let you reserve a name for a small fee if you're not ready to file.
Three quick checks save headaches later: search the state business database, check the .com domain is available if you'll have a website, and do a basic trademark search on the USPTO database so you're not building a brand you'll have to abandon. If the name you want is taken in your state, you can usually register the LLC under one name and operate publicly under a DBA ("doing business as") — but the LLC name itself still has to be unique in the state.
Step 3: Do you need a registered agent?
Yes — every LLC in every state must name a registered agent: a person or company with a physical street address in the formation state who can receive legal papers and official mail during business hours. You can be your own agent for $0 if you have an address in the state and you're reliably available, or hire a service — typical prices in our comparison run from $125/yr (Northwest) to $249/yr (LegalZoom). The full rules and trade-offs are in our guide Do I need a registered agent? and the registered agent comparison.
Decide this before you file, because the agent's name and address go on the Articles of Organization — and become public record. If you work from home and don't want your home address published, that's the strongest argument for a service.
Step 4: How do you file the Articles of Organization?
This is the step that actually creates your LLC. The document is called Articles of Organization in most states (Certificate of Formation in a few, including Delaware and Wyoming). You file it with the state agency — usually the Secretary of State — online in most states, and pay the state filing fee. The form is short: business name, address, registered agent, management structure (member-managed or manager-managed), and the organizer's signature.
Filing fees vary enormously, which is why Step 1 matters:
| State | Filing fee | Then per year |
| Montana | $35 | $20 |
| Kentucky | $40 | $15 |
| Arizona | $50 | $0 |
| Colorado | $50 | $25 |
| California | $70 | $810 |
| Texas | $300 | $0 for most small LLCs |
| Massachusetts | $500 | $500 |
California is the perfect warning: a cheap $70 filing hides an $800 annual franchise tax, so its true Year 1 cost is $880. Always judge a state on the 5-year total, not the filing fee. Wondering how long approval takes? See how long it takes to form an LLC.
Run your own numbers
See your state's Year 1, yearly, and 5-year LLC cost in about 10 seconds — free, no signup.
Open the free calculator →Step 5: Do you need an operating agreement?
An operating agreement is the internal rulebook for your LLC: who owns what percentage, how profits are split, how decisions get made, and what happens if a member leaves or the business closes. A few states require one; most don't require you to file it anywhere — but banks frequently ask for it when you open the business account, and if you have co-owners it's the document that prevents the most expensive arguments you'll never have. Single-member LLCs should still write a simple one: it strengthens the separation between you and the business, which is the entire point of forming an LLC.
You can write it yourself from a template or have an attorney draft one. Keep the signed copy with your formation documents.
Step 6: How do you get an EIN?
An EIN (Employer Identification Number) is your business's federal tax ID. It's free from the IRS — apply online at irs.gov and, in most cases, you get the number in about 10 minutes. Never pay a website $50–$250 for one; those are third-party services, not the IRS. You'll need an EIN to open a business bank account, hire employees, and file certain taxes, and many single-member LLCs get one simply to avoid using their Social Security number on paperwork. Our step-by-step walkthrough: How to get an EIN for your LLC.
Step 7: How do you finish — bank account, licenses, compliance?
With your approved Articles and EIN in hand, open a dedicated business bank account (our guide: how to open a business bank account for your LLC) and never mix business and personal money — commingling is the fastest way to undermine your liability protection. Then check for local business licenses and permits, which depend on your city, county and industry rather than your LLC itself.
Finally, calendar your state's recurring obligations from day one. Many states require an annual report (fees range from $0 in states like Arizona, New Mexico and Ohio to $810/yr in California) — miss one and you can face late fees or even administrative dissolution. The deadlines and fees for your state are on its state cost page, and our annual reports guide explains how they work. Formed in the wrong state by mistake, or need to close later? The dissolving an LLC guide covers the exit.
What does it cost in total to start an LLC?
For state fees alone, the national average is $220 in Year 1 and $160 at the median — from just $50 all-in in Arizona, Mississippi, Missouri and New Mexico, up to $1,000 in Massachusetts. Over five years the spread widens dramatically: $50 total in the no-annual-fee states versus $4,120 in California. Optional extras change the picture further: a registered agent service adds roughly $125–$249/yr if you hire one, and professional help (an attorney or accountant consult) is priced by the hour, not the state. The honest way to budget is to run your state through the LLC cost calculator and look at the 5-year number — then decide where a service is worth paying for and where DIY is free.
Frequently asked questions
How much does it cost to start an LLC in total?
State fees average $220 in Year 1 (median $160). The cheapest states — Arizona, Mississippi, Missouri and New Mexico — cost $50 total with no annual fee, while Massachusetts costs $1,000 in Year 1 and California $880. Add roughly $125–$249/yr only if you choose to hire a registered agent service; doing it yourself costs $0 extra.
Can I start an LLC myself, or do I need a lawyer?
You can file yourself online in every state — the Articles of Organization are a short form, and this guide plus your state's official site (linked from every state page) is enough for a straightforward single-owner business. A lawyer or CPA earns their fee when ownership is complex, outside investors are involved, or the tax structure is unusual.
How long does it take to start an LLC?
The paperwork takes an afternoon; state approval is the variable. Online filings are typically faster than mailed ones, and many states process online filings within a few business days, though busy periods take longer. See our guide on LLC processing times for what actually affects the timeline.
What do I need before I file?
A business name that isn't taken in your state, a registered agent with a physical address in that state, and a payment method for the filing fee. Everything else — operating agreement, EIN, bank account — happens after the state approves your Articles.
Ready when you are: the free LLC cost calculator shows your exact state fees before you spend a dollar.
Fees verified against official state sources — last checked October 26, 2026.