If you’re ready to formalize your side hustle or finally take action on the business idea you’ve been obsessing over, you may want to start a Limited Liability Company (LLC). Forming an LLC isn’t super complicated, but the more organized you are at the outset, the smoother your experience will be—before, during, and after filing with your state.
In this guide, we’ll share our comprehensive LLC formation checklist, broken down by stages, so you can start planning.
Here’s the quick, scannable version:
LLC checklist
Stage 1: Preparation
Brainstorm business names
Clarify your business purpose
Decide on your management structure
Weigh the pros and cons of using a registered agent service
Review your Secretary of State’s LLC filing instructions and obligations
Stage 2: Filing
Choose and verify your business name
Designate a registered agent
File articles of organization with your state and pay the filing fee
Create an operating agreement
Stage 3: Post-filing
Follow any additional state requirements, and pay attention to reporting and fees
Obtain a certified copy of your LLC articles of organization
Get an EIN
Register for state tax and labor accounts
Open a business bank account
Register your DBA
Get business licenses and permits
Know your employer obligations
Stage 1: Preparation
1. Brainstorm business names
The name of your business will be most people’s first impression of your operation, so it’s crucial to choose a strong, memorable, evergreen name. A good name should:
Accurately represent your business and mission
Draw in your target demographic
Be easy to use in marketing and advertising materials
Have an available website domain name
Be unique in your state
Create a shortlist of names that tick all the boxes above.
2. Clarify your business purpose
Take the time to define your business purpose and business model, so you can enter the business formation phase with total clarity. You may even want to draft a business plan; it’s a good excuse to outline your goals, conduct deeper market research, consider the marketing strategies you’ll use, and map out your finances.
3. Decide on your management structure
If you’re creating a single-member LLC, where you’re the only one at the helm, you don’t have to worry about management structure. But if you’re forming a multi-member LLC with business partners, you need to decide as a group who’ll manage overarching business strategy and daily operations.
Will you be member-managed (splitting duties amongst yourselves) or manager-managed (in other words, hiring a third party to oversee things)? It’s critical to get on the same page about management structure early on so you don’t have mismatched expectations with your fellow members.
4. Weigh the pros and cons of using a registered agent service
When you form an LLC with your Secretary of State, you’re responsible for appointing a registered agent to file your paperwork. A registered agent is also the person or company responsible for receiving legal documents and notices on your business’s behalf.
You can pick an LLC member to be the registered agent, or choose a registered agent service. Registered agent services charge a flat annual fee to handle the filing for you. The benefit of using a service, along with offloading the filing work, is that you get more privacy if you run a virtual business. The name and address of every LLC’s registered agent are publicly searchable online, so instead of your home address being listed on your LLC formation document, your registered agent’s address will be listed.
However, if your LLC is a brick-and-mortar store, or if you have a PO Box, you don’t need to worry about your information being available online.
5. Review your Secretary of State’s LLC filing instructions and obligations
Just like reading through the full recipe before you start cooking helps prevent issues in the kitchen, understanding your state’s LLC filing obligations ahead of time makes for a smoother filing process.
Visit your state’s Secretary of State website, search for information on LLCs, and try to find out the following:
Which documents you need to file
How much it costs to file
Which steps you have to take after filing
For instance, some states require you to get a business announcement published in a local newspaper in order to be recognized as a legal entity. Other states require you to upload your operating agreement when you file, or to update certain documents after filing.
It’s also prudent to check what your ongoing LLC maintenance fees and reporting requirements will be. Some states require LLCs to submit an annual report with updated business details (also called a Statement of Information) and pay a flat franchise tax. LLC taxes range widely—Arizona doesn’t charge any while California’s is $800—so it’s good to know what your all-in costs will be.
Stage 2: Filing
6. Choose and verify your business name
Grab that list of potential business names and input each one into your state’s business directory to see if they’re already registered in your state—or if they’re too similar to existing names.
Depending on the results, you may have to go back to the drawing board or just use your favorite name as a DBA, which stands for Doing Business As. Lots of businesses have an official LLC name that differs from the name they use to operate and market their business, aka their DBA.
Keep in mind that some states will ask you to make a name reservation before the filing process is underway. Reserving your business name will hold it for 30 to 120 days (depending on the state) if you need more time to build a business plan or recruit partners before forming your LLC.
7. Designate a registered agent
Now that you’ve done your research, it’s time to pick a registered agent. That means either hiring a registered agent service or choosing one LLC member. If you go for the latter, make sure you’re equipped to provide a physical address (or PO Box) for them.
8. File articles of organization with your state and pay the filing fee
The articles of organization, sometimes called a certificate of formation or certificate of organization, is the primary legal document you file to register your LLC. The name might sound intimidating, but it’s a pretty basic form—and you don’t need the help of a lawyer to draft it.
You just have to create a business account on your state’s Secretary of State website, input the information line by line, then pay a filing fee. Fees range from $35 to $500, and most states charge extra for expedited filing. You can see a list of state-by-state LLC filing fees here.
Most states ask for the exact same information in your articles of organization, which includes:
Business name
Principal operating address
Name and address of the registered agent
Business purpose (an overview of the LLC’s activities)
Management structure (whether or not the LLC is manager-managed or managed by members)
Duration of the LLC (which is usually indefinite or perpetual)
A signature from the organizer (the person filing the document) or another authorized person
9. Create an operating agreement
The operating agreement is a document that outlines the LLC’s ownership percentages, management structure, and profit-sharing strategy. If you have a multi-member LLC, an operating agreement functions like a contract between you and your business partners. Creating it together helps ensure you’re on the same page,
If you have a single-member LLC, it’s still important to make an operating agreement, since some states require one when you file.
The operating agreement should include:
Your business name, address, and business purpose
The names and contact information of the LLC members
The ownership percentage split
How much capital each member contributed
The LLC’s management structure
How profits and losses will be split
Rules for dissolving the LLC or buying out fellow members
Stage 3: Post-filing
10. Follow any additional state requirements, and pay attention to reporting and fees
Some states require business owners to take a few extra steps, either before getting approved or right after. In California, for example, you have to submit a Statement of Information listing your LLC’s addresses, managers or members, and registered agent 90 days after you form your LLC, then every two years after that.
Take the time to research your responsibilities and mark any key deadlines (like your annual franchise tax due date) in your calendar.
11. Obtain a certified copy of your LLC articles of organization
Once you receive word from your state that your LLC is official, it’s smart to get that confirmation in writing. Most states allow you to request a certified copy of your LLC’s articles of organization, either online or by mail, though some of them do charge a small fee.
12. Get an EIN
If your LLC has employees, has more than one member, or elects to be taxed as a corporation, you’ll need to obtain a federal Employer Identification Number (EIN). The Internal Revenue Service (IRS) assigns your business this nine-digit number, and you’ll use it constantly: to file taxes, open bank accounts, hire people, and share it with vendors and clients for tax reporting purposes.
If you’re a single-member LLC with no employees, you can technically use your Social Security number for federal taxes, but having an EIN keeps your SSN off documents like vendor W-9s.
To get your EIN, visit the IRS EIN application page, then type in your personal and business details: your name, Social Security number, business name, business address, and business entity type. Your EIN appears on screen as soon as you finish the application, so be sure to download and save the confirmation letter.
13. Register for state tax and labor accounts
You might have to register with your state’s department of revenue or economic development to pay LLC taxes. You may also need to set up employer payroll accounts if you plan to hire employees. Depending on your state and whether or not you hire employees, you might have to pay or carry:
Annual franchise taxes
State sales taxes
State income taxes
State disability insurance (in states like California, Hawaii, New Jersey, New York, and Rhode Island)
Workers’ compensation insurance
You can learn about what’s required for your state here.
14. Open a business bank account
Now that you have an EIN, sign up for a business bank account so you can pay taxes, track expenses, and run payroll. Depending on your finance goals and bandwidth, you may want to use a personal bank you’re comfortable with, try a credit union, or explore payroll software.
15. Register your DBA
If you’re using a different business name than the LLC name you registered, you’ll need to register your DBA with your state, county, or city (depending on where you operate). That usually involves filling out simple paperwork and paying a local filing fee.
16. Get business licenses and permits
Lots of businesses need one of two business licenses or permits before they can open. Some states require business licenses for specific industries and trades (think: food service, health, accounting, and personal care), but many cities also require licenses to operate in certain areas or sell goods that come with a tax.
Check your Secretary of State and local county clerk’s websites to see which business licenses you’re responsible for. You might need one or more of the following:
Building permit
Operating license
Zoning and land use permit
Health license
Occupational license
Sales tax license
17. Know your employer obligations
If you plan to hire employees, you need to know your state’s specific employment obligations. That includes compliance with local, state, and federal laws; tax rates and withholding obligations; mandatory paid leave or disability insurance contributions; and workers’ compensation insurance.
For state-specific guidance on hiring employees, search for your state’s guide here. Make sure you find out:
Which labor law posters you have to display or distribute
How much state income tax you have to withhold
What your state’s unemployment insurance tax rate is
How much FICA tax you have to pay
Which state laws you need to abide by (including minimum wage, overtime pay, and job classification)
Extra business building resources
After filing your LLC, you’re one step closer to greeting customers and generating revenue! For more actionable advice along the way, bookmark our comprehensive guides on everything from hiring to setting up payroll:
Frequently Asked Questions
What documents do I need before filing an LLC?
You don’t need to gather any specific documents before filing your LLC, but when you file with your Secretary of State, you’ll fill out a form called the articles of organization (or certificate of formation). This document has information on your business name, address, registered agent, management structure, and business purpose.
Do I need an operating agreement if I'm a single-member LLC?
Yes, it’s a good idea to create an operating agreement as a single-member LLC, even if your state doesn’t require it.
Do I need a business license in addition to forming an LLC?
Whether or not you need a business license to run your LLC depends on what your business does and where you live. Some counties and states require businesses to obtain location permits, and some industries require professional operating licenses. Check with your state’s and county’s business offices to find out what’s necessary.
