How to Start an LLC

The filing itself takes about 10 minutes online. State processing times vary: Wyoming and Delaware approve formations in 1–2 business days, most states take 3–7 business days, and a few (like New York, which has a publication requirement) can take several weeks. Expedited processing is available in most states for an additional fee.

State filing fees range from about $40 (Kentucky) to $500 (Massachusetts). Most states charge $50–$200. On top of that, you’ll pay a formation service fee (if you use one) and an annual registered agent fee if you don’t act as your own. Budget $100–$400 all-in for your first year in most states.

You don’t legally need one, but it’s a good idea. An LLC separates your personal assets from business liabilities — meaning if a client sues you, your personal savings and home are protected. It also makes your business look more professional and is required by some clients before they’ll sign a contract. The cost is minimal compared to the protection you get.

A sole proprietorship is the default — if you start doing business, you’re automatically a sole proprietor. The problem: there’s no legal separation between you and the business. If your business gets sued, your personal assets are at risk. An LLC creates that legal wall. The tax treatment is the same (pass-through to your personal return), so you’re mainly paying for liability protection. Full comparison here.

Yes. You can form an LLC in any state regardless of where you live. However, if you form in one state and do business in another, you’ll need to register as a “foreign LLC” in the state where you operate — which means paying fees in both states. For most small businesses, forming in your home state is the simplest and cheapest option.

No. Most LLCs are straightforward enough that you can file yourself or use a formation service. An attorney is worth it if you have multiple owners with complex equity splits, significant personal assets to protect, or industry-specific regulatory requirements. For a standard single-member or two-person LLC, a formation service gets the job done at a fraction of the cost.

Yes — no visa, residency, or citizenship is required. You can form an LLC in any state. You’ll need a U.S. registered agent (which we provide), and your EIN application will need to be submitted by fax (Form SS-4) rather than online. The process takes about 4–8 weeks from start to operational. See our full international guide.

Most states charge an annual report fee ($0–$300 depending on the state) and some charge a franchise tax. You’ll also pay for registered agent service annually if you use one ($50–$300/year). If you elect S-Corp taxation, add payroll service costs ($30–$50/month). Beyond state requirements, most LLC owners spend on bookkeeping software, business insurance, and CPA fees at tax time.

Maybe — it depends on your income. The S-Corp election lets you split income between salary (subject to payroll taxes) and distributions (not subject to payroll taxes), potentially saving you 15.3% on a portion of your income. The catch: you must pay yourself a “reasonable salary,” run payroll, and file additional tax forms. Most CPAs say it starts making sense when your LLC nets $60K–$80K+, but the exact breakpoint depends on your situation. Talk to a CPA. Read our LLC vs S-Corp guide.

Your state will typically send a warning notice, then charge a late fee ($25–$200+), and eventually administratively dissolve your LLC. Once dissolved, you lose your liability protection and may lose the right to your business name. Reinstatement is possible in most states but costs more than just filing on time. This is why we include compliance deadline reminders with every BusinessFormations.com formation.