How to Start an LLC in 2026: Step-by-Step Guide
Last updated: July 21, 2026
Quick note: we're operators, not attorneys or accountants. This is general educational info to make LLCs make sense — not legal or tax advice. Before you file, confirm the specifics with your state and a licensed professional.
This is the plain-English version, written for people starting a real, hands-on business, not lawyers. It covers the six steps, what each one actually costs, the 2025 rule change most guides still get wrong, and whether you should file it yourself or pay someone.
What an LLC is (and why it matters)
An LLC (Limited Liability Company) is a registered business entity that legally separates your business from you, so a business debt or lawsuit generally can't reach your house, car, or personal savings.
That separation is the whole point. The day you start taking money from clients, you carry risk, and a sole proprietorship (the default when you work for yourself) leaves your personal assets exposed. An LLC puts a legal wall between the two. It also makes you look like a real business to the clinics, labs, and companies you want to sign contracts with, and it's usually required to open a business bank account.
For a hands-on operator, the appeal is that you get that protection without the heavy machinery of a corporation: no board, no shareholders, no double taxation by default. Just a clean, simple entity.
The 6 steps to start an LLC
Name it, appoint a registered agent, file the Articles of Organization, write an operating agreement, get an EIN, then keep it compliant. Here's each step.
Name your LLC
Pick a name that is unique in your state and includes a required designator like "LLC" or "Limited Liability Company." Search your Secretary of State's business name database first, because a name that's already taken gets your filing rejected. Check that the matching website domain is free while you're at it.
Appoint a registered agent
A registered agent is the person or service that receives legal and state mail for your LLC. It needs a physical street address in your state and someone available during business hours. You can be your own registered agent for free, or use a service (roughly $100–$300/year) if you don't want your home address public or you're often on the road — Northwest is the one we recommend, and it's included free the first year with their $39 formation service.
File the Articles of Organization
This is the document that actually creates your LLC. You file it with your Secretary of State (online in most states) and pay the state filing fee. It lists your LLC name, address, registered agent, and management structure. Approval takes anywhere from minutes to a few weeks depending on the state. This is the one unavoidable cost.
Write an operating agreement
An operating agreement sets out who owns the LLC, how it's managed, and how profits are split. Most states don't legally require one, but write it anyway — even as a single owner. It reinforces the liability protection, and banks and partners often ask to see it. A solid template you fill in is enough for most one-person businesses.
Get an EIN from the IRS
An EIN (Employer Identification Number) is your business's tax ID. You need it to open a business bank account, hire, and file taxes. Get it directly from the IRS for free at irs.gov — it takes a few minutes online. Never pay a third party for an EIN; the ones that charge are just filling in the same free form.
Keep it compliant
Forming the LLC is step one; keeping it alive is ongoing. Most states require an annual or biennial report (and sometimes a franchise tax or annual fee). Keep your registered agent current, open a separate business bank account, and track any local business licenses. Miss the report and the state can dissolve your LLC.
What it costs to start an LLC
The only required cost is your state's filing fee, which ranges from about $50 to $500 (the national average is around $132). Everything else is optional.
| Item | Typical cost | Required? |
|---|---|---|
| State filing fee (Articles of Organization) | $50 – $500 (avg ~$132) | Yes |
| Registered agent service | $0 (yourself) – $300/yr | No |
| EIN | Free from the IRS | Yes (free) |
| Operating agreement | $0 (template) – lawyer fees | No (do it anyway) |
| Annual/biennial report | $0 – $300+ depending on state | Usually yes |
Figures are typical ranges as of 2026; your exact state fee is on your Secretary of State site and in the state guides below. (Filing-fee range and ~$132 average: industry formation data, 2026.)
Should you file it yourself?
Filing an LLC yourself is realistic for most people and saves the most money — but a formation service or accountant is worth it if your time is tight or your situation is complex.
The honest answer: the state form is not complicated, and doing it yourself costs only the state fee. If you can follow a checklist, you can file your own LLC in an afternoon. Where paying makes sense: you want it off your plate, you have multiple owners, or you want an accountant to set up taxes correctly from day one (which is where the real money is saved — an S-corp election or clean bookkeeping matters more than who typed the form). Point being: pay for expertise on taxes and structure, not for typing.
Which state should you form in?
Form your LLC in the state where you live and run the business. The "form in Delaware or Wyoming" advice is wrong for almost every small operator.
Delaware, Wyoming, and Nevada get hyped for privacy and low fees. But if you live and work in, say, Texas and form in Wyoming, Texas still considers you to be doing business there — so you'd have to also register as a foreign LLC in Texas, pay both states' fees, and keep two registered agents. You end up paying more for no benefit. Unless you're a large company with specific legal reasons, form in your home state. Full stop.
LLC pros and cons
Pros
- Personal asset protection — the core reason to form one.
- Pass-through taxation — no corporate double taxation by default.
- Credibility — clients and banks take a registered business more seriously.
- Flexibility — few formalities, and you can elect S-corp taxation later.
Cons
- Costs money — filing fee up front, plus ongoing report/fees in most states.
- Some paperwork — annual reports and keeping business and personal finances separate.
- Self-employment tax — until profits justify an S-corp election.
Starting a courier business, not just an LLC?
An LLC is one step. If you're setting it up to run medical courier routes, our course walks you through the LLC, the business bank account, insurance, certifications, and — the part that actually pays — how to find routes and win contracts.
Start Your 7-Day Free TrialFree LLC guides by state
Filing fees, the exact agency, and annual-report rules differ in every state. State-by-state guides are publishing now — the list below activates as each one goes live.
How to Start an LLC — FAQs
Do LLCs pay taxes?
By default an LLC is a pass-through entity, so it pays no federal income tax itself. Profit passes to the owners, who report it on their personal returns and pay self-employment plus income tax. An LLC can elect S-corp taxation once profits are high enough to justify it. Some states also charge an annual LLC fee or franchise tax.
What are the pros and cons of an LLC?
Pros: personal asset protection, pass-through taxation, credibility with clients and banks, and flexibility. Cons: an upfront filing fee plus ongoing state reports/fees, a bit of paperwork, and self-employment tax until profits justify an S-corp election. For most small operators the protection outweighs the cost.
Where should I form my LLC?
For almost every small business, form it in the state where you live and operate. Forming in Delaware, Wyoming, or Nevada while working elsewhere usually forces you to also register as a foreign LLC at home — double fees, double registered agents, no real benefit.
Can you file an LLC yourself?
Yes. You can file the Articles of Organization directly with your Secretary of State online and get your EIN free from the IRS. That's the cheapest route. Many owners still use a service or accountant to save time or set up taxes correctly, but no law requires it.
Can I start an LLC online?
Yes. Every state lets you file through its Secretary of State website, and the IRS issues EINs online for free. Most LLCs can be formed entirely online in well under an hour of real work.
What's the difference between an LLC and a corporation?
An LLC is simpler, pass-through taxed by default, and flexibly managed. A corporation has a rigid structure of shareholders, directors, and officers, and a C-corp is taxed separately from its owners. Most small operators pick an LLC for the liability protection without the corporate overhead.
Can an LLC be an S-corp?
Yes — an S-corp is a tax election, not a business type. An LLC elects S-corp taxation by filing IRS Form 2553. It can cut self-employment tax once net profit is high enough (often cited around $60k–$80k), but it adds payroll and accounting costs, so check with a tax pro first.
What is the difference between a sole proprietorship and an LLC?
A sole proprietorship is the automatic default when you work for yourself — no filing, and no liability protection, so your personal assets are exposed. An LLC is a registered entity that separates business from personal assets. For any business with real clients or contracts, that protection is worth the filing fee.
What's a good name for an LLC?
One that's unique in your state, easy to say and spell, still available as a domain, and includes a required designator like "LLC." Always check your Secretary of State's business name database first — a name that's already taken will get your filing rejected.