How to start an LLC

The steps in every state

1. Choose a name the state will accept: one that differs from the names on its register and ends with an LLC designator such as "LLC". Check an LLC name.

2. Appoint a registered agent with a street address in the state, to receive legal papers for the LLC.

3. File the formation document with the state's business filing office and pay its fee. 34 states call it Articles of Organization; 8 states call it a Certificate of Formation; 8 states call it a Certificate of Organization.

4. Publish a notice if the state requires one: Arizona, Nebraska and New York do.

5. Write an operating agreement: Delaware, Kansas, Missouri and New York require one, and every LLC is better off with one, since it says who owns the company and how it's run. Make one free.

6. Get an EIN from the IRS, free online.

7. Keep the LLC current: file the recurring report and pay any state tax on time.

What you'll need before you file

Most states' formation forms ask for the same things, so gather them first:

• the LLC's name, with the ending the state accepts;

• the registered agent's name and street address in the state;

• the LLC's principal office or mailing address;

• whether the members or managers will run it;

• the name and address of the organizer, the person who signs and files;

• the filing fee, by card online or by check on paper.

What it costs

The filing fee runs from $35 in Montana to $500 in Massachusetts. Recurring reports and state taxes change the picture over time: counting state fees only over five years, the cheapest states are Montana ($35), Arizona ($50), Mississippi ($50). Compare every state's LLC fees.

After the LLC exists

Open a business bank account with the EIN and the formation document (banks often ask for the operating agreement too). Register with the state's revenue department for any tax the business will collect or withhold, such as sales tax or payroll withholding. Get the licenses and permits your city, county or line of work requires. Then note the recurring report's due date, since a missed report is how most LLCs fall out of good standing.

Which state to form in

Form the LLC in the state where it will do business. An LLC formed in another state, for its fees or its privacy, still has to register as a foreign LLC where it works and pay that state's fees as well, and it needs a registered agent in both.