How to Start an LLC: The Steps, the Costs, and How They Differ by State

Starting an LLC generally means choosing a state and a compliant business name, appointing a registered agent, filing that state's formation document and fee, creating an operating agreement, getting an EIN when you need or want one, registering for the state and local taxes or licenses that apply, and keeping up with the state's continuing filings, as the SBA's launch guidance (opens in a new tab) lays out. The document name, fee, annual or biennial filing and tax duties vary by state. Texas, for example, uses Form 205, Certificate of Formation (opens in a new tab), and charges a $300 filing fee. California (opens in a new tab) and New York (opens in a new tab) use Articles of Organization but have different continuing filings.

Which state forms the LLC?

An LLC is a state-created business entity, and its owners are called members. The Texas Form 205 instructions describe an LLC as a distinct entity governed by Chapter 101 of the Texas Business Organizations Code, which means the filing office and rules come from the state where the LLC is formed. A business that wants to operate in another state should confirm with that state's filing office whether anything separate is needed.

The general order of steps is the same everywhere, even though the details differ. Select the state, choose a compliant name and check that it is available, select a registered agent and registered office, file the formation document and pay the published fee, prepare an operating agreement, get an EIN, open a business bank account, register for taxes and licenses that apply, and maintain the state's reports.

What name can the LLC use, and who is the registered agent?

Texas requires a compliant entity name on the certificate, and the Texas Secretary of State's Form 205 instructions (opens in a new tab) are the place to confirm what that means. Name availability is checked with the state filing office before filing. Separate assumed-name filings can apply when a business operates under a different name.

Texas requires a registered agent and a registered office in Texas, an initial mailing address, the identity of the initial governing authority and an organizer's signature. New York designates its Secretary of State as the LLC's agent for service of process, according to the New York Department of State (opens in a new tab).

Which formation document do you file, and what does it cost?

Texas calls it a Certificate of Formation, and a general-purpose LLC uses Secretary of State Form 205. It is filed under Business Organizations Code Chapter 3 (opens in a new tab), including sections 3.001, 3.003, 3.004 and 3.005. The certificate becomes effective when filed unless a permitted delayed-effectiveness provision is used, and a Texas LLC exists perpetually unless a different duration is stated.

These are published filing fees, not estimates for any one business. Total cost can also depend on tax liability, local licenses, permits, registered-agent services, professional help and expedited processing. In Texas, the formation fee is at least $300 before any of those items.

What is an operating agreement?

The SBA describes an operating agreement as an internal document that explains the LLC's financial and functional decisions, how key decisions are made, and each member's duties, powers and responsibilities. Texas law calls it a "company agreement." Section 101.052 of the Business Organizations Code (opens in a new tab) says it governs relations among members, managers, officers, assignees and the company, and if it does not provide otherwise, the Business Organizations Code and the applicable general provisions govern internal affairs.

Texas does not make the company agreement part of the Form 205 filing, so it is not sent to the Secretary of State. Texas law also permits an oral company agreement, though the SBA describes a written operating agreement as widely recommended. California and New York set their own default rules for LLCs without an agreement, so confirm those in the state's LLC statute.

Does an LLC protect your personal assets?

State law defines member liability, with exceptions. Texas Business Organizations Code § 101.114 (opens in a new tab) provides that, except as the company agreement specifically provides otherwise, a member or manager is not liable for a debt, obligation or liability of the LLC, including a judgment, decree or court order. That is a statement about liability for the LLC's own obligations; it does not say an LLC prevents every kind of personal liability, and other states set their own rules. An LLC is not an insurance policy; see the insurance a new business needs first (opens in a new tab).

What happens after state formation?

The IRS issues the EIN, and the responsible party applies for it. Eligible applicants with a U.S. principal place of business can apply online and get the EIN immediately (opens in a new tab), and the IRS online application is free. An LLC does not receive an EIN automatically when the state files its paperwork.

For federal tax, the IRS instructions (opens in a new tab) treat a domestic LLC with one member as a disregarded entity unless it elects corporate treatment, and a domestic LLC with two or more members as a partnership unless it elects corporate treatment. An eligible LLC may elect S corporation treatment by filing Form 2553 and meeting the requirements, and a domestic LLC may elect to be taxed as a corporation using Form 8832. S corporation treatment is not automatic.

A business bank account and business records come next, and they keep business and personal finances separate. State tax registrations (sales, payroll or others), local licenses and permits may also apply, and the state formation filing does not complete them.

What must the LLC file later?

Ongoing duties can include keeping a registered agent and registered office, updating state records when required, filing annual or biennial reports or franchise-tax reports, keeping local licenses current and staying current on federal tax filings.

Texas works differently from California and New York. For report year 2026, the Texas Comptroller (opens in a new tab) lists a $2.65 million annualized-revenue no-tax-due threshold. An entity at or below that threshold generally does not file a No Tax Due Report, but it must still file a Public Information Report (Form 05-102) or an Ownership Information Report, subject to the Comptroller's stated exceptions. The annual report due date for 2026 was May 15, 2026. California requires a Statement of Information within 90 days and every two years after, and New York requires a Biennial Statement every two years.

What is the current BOI position?

FinCEN's March 21, 2025 interim final rule (opens in a new tab) revised "reporting company" to cover entities formed under foreign law and registered to do business in a U.S. state or tribal jurisdiction. It exempted entities created in the United States, including domestic LLCs, from the revised beneficial ownership information (BOI) reporting requirement. FinCEN said it intended to finalize the rule and considered further rulemaking, so check FinCEN's current page before relying on this position.

Do you need a lawyer or an accountant?

State filing offices provide formation forms and instructions that allow an organizer to submit the filing directly, and Texas Form 205 is designed to meet the minimum statutory filing requirements. The SBA says an operating agreement may be prepared with an attorney and an accountant for the legal and financial matters, and it does not set a requirement that every LLC use a lawyer. Whether to bring in a professional depends on the formation and the owner's questions, such as how to document ownership percentages, how profits and distributions are allocated, or how members are admitted or removed.

Spanish terms

Spanish-speaking owners will see "compañía de responsabilidad limitada" for LLC, "número de identificación del empleador" for EIN, and "persona responsable" for the person who applies. The IRS publishes its EIN page in Spanish (opens in a new tab) and Form SS-4 (sp) (opens in a new tab), the Spanish application. New York publishes its Biennial Statement page in Spanish (opens in a new tab), where it is called the "Declaración Bienal," and TexasLawHelp's Spanish business-entity page (opens in a new tab) uses "agente registrado."

A formation checklist

• State selected, and name selected and checked.
• Registered agent and registered office chosen.
• Formation document completed, fee paid and filing receipt saved.
• Operating agreement or company agreement prepared.
• EIN obtained when it applies.
• Business bank account opened.
• State and local tax registrations, licenses and permits checked.
• Annual, biennial or franchise-tax calendar created.

Frequently asked questions

The answers below cover questions readers often ask next, with the state named wherever a rule is state-specific.

How much does an LLC cost in Texas?

The Texas filing fee for Form 205 is $300 as of October 1, 2026. Texas also has continuing franchise-tax and information reporting through the Comptroller, plus any permits, licenses, registered-agent service or professional fees, which vary by business.

Can you start an LLC by yourself?

State filing offices provide formation forms and instructions that let an organizer file directly. Texas Form 205, for instance, is built to meet the minimum filing requirements for a Texas LLC.

Does an LLC need an EIN?

The IRS requires an EIN in specified situations and offers a free online application to eligible applicants. A domestic single-member LLC may have different requirements depending on employees, excise taxes, elections and other federal obligations.

What is the difference between an LLC and a sole proprietorship for federal tax?

A domestic single-member LLC is a disregarded entity for federal tax by default, unless it elects corporate treatment. A multi-member domestic LLC is a partnership by default, and an S corporation election requires filing Form 2553 and meeting the requirements.

Do domestic LLCs currently file BOI reports?

FinCEN's March 21, 2025 interim final rule exempted entities created in the United States from the revised BOI reporting requirement. Confirm FinCEN's current position before filing or skipping a report.

If your LLC raises contract, tax or business-dispute questions, a lawyer licensed in your state can review the details. You can find business-law firms in the Counselado lawyer directory, and our Texas guide on how to start an LLC in Texas goes deeper on the Texas steps.