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How to Form an LLC (By State)

Forming an LLC involves filing with the state where the company will conduct its business. An LLC can be formed online or by filing a paper application with a filing fee. The typical processing time is between 5 to 10 business days.
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By State

Table of Contents

How to Form an LLC

1. Search for a Business Name

Use the Secretary of State’s office to check the company name. This reduces the chances of rejection to make sure one doesn’t already exist.

By State (business search)

 

2. Choose a Registered Agent

A registered agent must be located within the State and accept notices on behalf of the company during normal business hours. For this reason, many companies elect to have a third party for this role.

However, it is possible for a company to also act as their registered agent.

3. File the LLC

An LLC can be filed online or through the mail. This is handled by the Secretary of State’s office and requires a filing fee. The processing time depends on the jurisdiction.

4. Obtain an EIN

An employer identification number (EIN) can be applied for on the IRS website to open bank accounts on the company’s behalf.

5. Write an Operating Agreement

An operating agreement is a contract between the partners of a company that outlines ownership and how decisions are made within the company. It should be signed by each member.

6. Decide the Tax Classification

  1. Disregarded Entity – By default for a single-member LLC. Income and expenses are reported on the owner’s tax return (IRS Form 1040 – Schedule C).
  2. Partnership – By default for a multi-member LLC. The income and expenses are reported on a Schedule K-1 (IRS Form 1065) and passed through to each member based on ownership.
  3. S-CorporationForm 2553 must be filed within 75 days of formation. The income and expenses are reported on a Schedule K-1 (IRS Form 1120-S) and passed through to each member based on ownership.
  4. C-CorporationForm 8832 must be filed at any time. The income and expenses are reported on Form 1120 and filed with the IRS directly.

7. Maintain the LLC

Renew the LLC on an annual basis. Typically, a filing fee is required between $50 to $800 (California is the highest).

If not renewed, an LLC is no longer allowed to conduct business in the State and can be subject to extra fees for reinstatement.

2023 Statistics

  • 5,450,921 business applications were filed in 2023
  • 89.24% of new businesses were non-corporation entities.
  • 7.22% more businesses were created nationwide in 2023 vs 2022[1]
  • Colorado had the largest increase in business applications at 115%.
  • 9.5% of businesses eventually employ workers.[2]