Learn How to Form an LLC
Hi! I’m Matt Horwitz, founder of LLC University®.
LLC University® is not driven by profit, but instead by our mission to empower entrepreneurs through free education.
Over the past 8 years we’ve created tutorials on how to form an LLC in every state.
What’s the best state?
Avoid the hyped up states like Nevada, Wyoming, or Delaware. Form your LLC in your home state. This is where you’re legally doing business. Avoid double LLC filings and save yourself the headache. Exceptions are real estate investors and non-US citizens…
How much does an LLC cost?
LLC filing fees vary depending on the state. The average filing fee is $127. The average annual report fee is $101. If you hire a registered agent, that will add to your costs. If you follow our LLC tutorials you can file the paperwork yourself and save money…
What’s a registered agent?
A registered agent is a person or company who agrees to receives “service of process” for your LLC. Service of process is legal mail. You, a friend, or family member can be your LLC’s registered agent. Or you can hire a commercial registered agent…
What is an LLC?
An LLC is a Limited Liability Company. It is a business structure used to protect the personal assets of its owners. LLCs are a “hybrid entity”, combining the advantages of Corporations and Partnerships, without taking on their disadvantages.
An LLC can be used to run a business, or it can be used to hold assets (such as real estate, vehicles, boats, or aircraft).
Where is the best to state to form an LLC?
It is best to form your Limited Liability Company in the state where you are doing business. For most, this is their home state. For real estate investors, it’s best to setup your LLC in the state where the property is located since that is where you’re legally doing business.
How much does it cost to form an LLC?
The average state filing fee to form an LLC is $127. The majority of the 50 states cost between $50 to $150. To see LLC filings fees and LLC annual fees in all 50 states: LLC filing fees by state.
Expensive States to Form an LLC
There are a few states that are higher than average, like Alaska ($250), Massachusetts ($500), Tennessee ($300), and Texas ($300).
LLC Annual Reports
And most states require LLCs to file and pay “Annual Reports” (name of report varies by state). The average fee across the U.S. is $101. The majority of the 50 states cost between $50 to $100 per year.
States with no LLC Annual Reports
There are few states where there is no Annual Fee (although a report may be due), such as Arizona, Idaho, Minnesota, Mississippi, Missouri, New Mexico, Ohio, South Carolina, and Texas.
States with Expensive Annual LLC Fees
There are a few states with higher than average “Annual Fees” (again, names vary by state), like California ($800), Delaware ($300), Maryland ($300), Massachusetts ($500), Nevada ($500), Tennessee ($300), and Washington D.C. ($300).
“Hidden” LLC Fees
And, be careful, even if a state doesn’t have an Annual Fee (or they have a low fee), they may take that money from elsewhere. For example, in Connecticut, the Annual Report costs $20 each year, but Connecticut also has something called the Business Entity Tax. The Business Entity Tax is $250 every other year. Make sure to click your state above and read our entire guide in order to understand all of the costs associated with starting an LLC in your state.
LLC Registered Agent Fees
If an individual, such as you, a friend, or a family member will be your LLC’s Registered Agent, then there is no additional cost here. If you prefer not to be your LLC’s Registered Agent, and don’t want to use a friend or family member, then you can hire a Commercial Registered Agent. Industry fees range between $100 to $300 per year. The 2 companies that we recommend cost between $100-$125 a year and provide excellent customer service (links in our state guides above).
What is an LLC Registered Agent?
A Registered Agent (also referred to as a Resident Agent or Statutory Agent) is a person or company who agrees to accept legal mail and documents on behalf of your LLC. All states (except for a few exceptions) require that your LLC list a Registered Agent in your LLC Formation Documents. The purpose of a Registered Agent is to make sure there is a reliable person/company and a reliable street address (very few states accept PO Boxes) where such documents can be delivered. Most companies try to trick you into hiring them as your Registered Agent. They don’t explain that you (or anyone you know) can be your LLC’s Registered Agent.
How do I start an LLC?
Depending on what state you file in, the “LLC formation documents” have different names. The most common name is the Articles of Organization, but some states refer to the document as a Certificate of Formation or a Certificate of Organization.
Before filing your formation documents with the state, you need to search your LLC name to make sure it is “distinguishable”, unique and different from any existing registered business in your state.
Most states will approve your LLC in about a week. Some are faster, some are slower. After your LLC is approved, you’ll draft and sign an Operating Agreement. An Operating Agreement is the “owner’s manual” of how the LLC is managed, how taxes are paid, how profits are distributed, and much more. It’s essentially a contract between the owners (called “members”). Even if you have a single-member LLC (1 owner), it is best practice to have an Operating Agreement for your LLC.
After your Operating Agreement is complete, you’ll then apply for your Federal Tax ID Number from the IRS. A Federal Tax ID Number is also known as an EIN, or Employer Identification Number. They are all the same thing. Although many websites charge money for this, getting an EIN from the IRS is completely free and can be obtain from the IRS via their online application (takes 10-15 minutes to complete). You’ll use your EIN to open a bank account for your LLC, file and pay taxes, handle payroll (if applicable), obtain credit cards, and get business financing.
After you’ve completed all the above steps, you need to keep your LLC “in compliance” with your state. That means filing your Annual Report (usually filed with the Secretary of State) and paying state taxes (usually to the Department of Revenue).
To get started forming your LLC, click on any of our free guides above.
Meet the Founding Team
LLC University® Reviews & Testimonials
(here’s some recent comments we received)
“Hey, I just wanted to say thank you guys for LLC University! I’ve been researching 24/7 about forming my Florida LLC and was about to pay some crazy company just to do it, but there’s a certain sense of pride when doing it by yourself. I’m working on a name for my company now, but I should be up and running soon because of the LLC University video lessons!”
– Louis Quinonens
“Hi! Thanks for creating such an awesome resource. I was about to spend $650 on a lawyer to do the LLC formation, but instead was able to follow your guides and saved over $400. Now I can use the lawyer to create documents that I really need to get my business off the ground.”
– Mike Depalma
“Awesome site! Even as a paralegal I had to brush up when filing our LLC, and you not only covered everything from A-Z, but even all of the in between things! Thanks so much :)”
“The information you provided was extremely helpful. Your step-by-step instructions were easy to follow and specific, saving me time and money.”
– Lou Palazzo
“I cannot believe you provide this start-up guide for free. It’s exactly what I needed. I’m trying to get my business up and running as I recently lost my job. I cannot afford to pay someone else. But when I’m in a position, I will pay you forward!!!! Thank you.”
– Tricia Arnold
“Thank you for this information. You save me $600.00.”
“Hi Matt! Thank you so much for this great source of information! It’s by far the best step-by-step guide to forming an LLC on the internet!”
“Thank you so much for all you do. I have gotten conflicting information of how to set up an LLC from folks who just wanted my money. I knew it wasn’t that hard. Your step by step instruction allowed me to set up my business from start to finish in two hours including the bank account. I just happened to stumble upon your site while researching. I am so glad I found you. I have told my friends about LLC University. Thank you again.”
– L. Jones
“Thank you so much Matt for showing us the LLC formation process. It is extremely user friendly and so educational. I am very happy I came across your lessons!”
“Thank you for this amazing free step-by-step guide on how to form a LLC. It was very easy to follow and navigate. I will definitely share this with my clients.”
– Jared H.
“Without question, the best site assistant we have located online! Streamline and easy to follow directions and links! We’ll make sure to spread the word!”
– William Allen
“I am beyond excited for this new venture. I just want to thank you and I want you to be prepared for all the referrals coming your way! Your service and commitment is what I value the most. Thank you very much for your patience and dedication in helping me get the ball rolling! Thank you!”
– Britt Hanson
“Just wanted to say thanks a million for the vids. I called legalzoom and they wanted a lot, without the NY publication filing requirement. So I decided to just do this myself.”
“Dear Matt, thank you! I have learned so much and your video tutorials are so clear that it makes learning this kind of stuff fun.”
– Donna McGovern
“Your guide is super easy to follow and all the forms needed to file were there. Thanks you so much for breaking this down in the most simplest form. This guide makes it a breeze to form a business. Not everybody is a business major or savvy. Again, thanks you for all your hard work in putting together this informative guide.”
– Hai Lu
“A thank you doesn’t seem enough for all this information you have provided! But seriously, Thank You! And this almost covers everything, I mean if you were to fund the LLC’s to, then it would be complete. Joking of course!”
“Your website was a godsend. Trying to figure out all that was needed to start my LLC was quickly becoming a nightmare but you guys truly made it a breeze. Thank You! Thank You!”
– Tesha Adams
“Just finished watching all of your videos of how to form an LLC. THANK YOU SOOOOOO MUCH, MATT! I can’t describe how much your website helped me with research. You just saved me thousands of dollars and countless hours of reading articles! I will 100% refer every person I know interested in forming an LLC here. Thank You So Much Again!”
– Joshua Walker
“I just want to thank you for taking the time to educate the consumer. I was so confused until I stumble upon your website. I want you to know that I consider you a blessing. You have truly made my life so much easier. I don’t have the words to express my gratitude to you. Again, thank you, thank you, thank you so very much.”
– Dr. Jettie Davis
“Hey Matt! I just wanted to say thanks for all of this incredible information you provide! Starting an LLC was a pretty big step for me (only 2nd to getting married! LOL) But after watching your videos, you gave me the knowledge (and honestly, the courage) to take the leap. A million THANKS and keep up the great work!”
We’re on Youtube!
LLC University® is now on Youtube!