How to Get an LLC: A Comprehensive Guide to Formation and Cost


Starting a business can be an exciting journey, but it’s important to ensure you’re operating legally. One of the key steps is to form a Limited Liability Company (LLC). An LLC protects your personal assets and provides tax benefits. In this article, we’ll outline how to get an LLC, including a step-by-step guide, common mistakes to avoid, a cost breakdown, personal stories, and FAQs.

Step-by-Step Guide

Researching LLC Requirements in Your State

The first step towards getting an LLC is to research the legal requirements in your state. Each state has its own laws, fees, and filing procedures. Start by visiting your state’s Secretary of State website or consulting with a business lawyer. You may also want to research the tax implications of starting an LLC in your state.

Choosing a Business Name

Choosing a business name that is memorable and unique is important. Conduct a search on the Secretary of State’s website to ensure that the name you want is available. It’s important to note that the name can’t be already in use and must comply with state requirements.

Selecting a Registered Agent

A registered agent is a person or company who accepts legal papers on your behalf. Some states require that you choose a registered agent with a physical street address, while others allow the use of a PO Box. Consider using a registered agent service if you don’t have a physical address in the state.

Drafting and Filing Articles of Organization

The articles of organization are the legal documents required to form an LLC. You’ll need to provide information such as your business name, registered agent, business purpose, management structure, and member names and addresses. The cost of filing these documents varies by state, but expect to pay fees ranging from $50 to $500.

Obtaining Necessary Licenses and Permits

Depending on your business type and location, you may need to obtain licenses and permits. Research your state’s requirements to ensure you’re in compliance. You may also need to register for state taxes and apply for an Employer Identification Number (EIN).

Tips and Best Practices

Be sure to keep accurate records, maintain your LLC status by filing annual reports, and open a separate business bank account. Consider hiring an attorney or a business formation service to assist in the process.

Common Mistakes to Avoid

Not Conducting Enough Research Before Starting the Process

A common mistake is failing to research the requirements for forming an LLC in your state, which can lead to legal issues and delays. To avoid this mistake, ensure you conduct thorough research and seek assistance from professionals if necessary.

Overlooking Important Legal Requirements

Another common mistake is overlooking important legal requirements. These requirements may include filing annual reports, obtaining necessary licenses, and maintaining proper records. To avoid these mistakes, research the legal obligations for your business and create a checklist.

Failing to Fully Understand Tax Implication

Forming an LLC can provide tax benefits, but only if done correctly. A common mistake is failing to fully understand the tax implications of forming an LLC. To avoid this mistake, seek advice from a tax professional and stay up-to-date on tax law changes.

Cost Breakdown

The cost of forming an LLC varies by state and depends on several factors, including legal fees, filing fees, and state fees. Legal fees can range from $500 to $1,500, filing fees from $50 to $500, and state fees from $40 to $500. To save money, consider filing the articles of organization yourself and avoiding unnecessary legal fees.

Personal Stories

Forming an LLC has brought success to many businesses. For example, John started a woodworking business, and forming an LLC protected his personal assets. Lisa formed an LLC and saw an increase in customer trust and sales.

FAQ Format

Do I Need an Attorney to Form an LLC?

No, hiring an attorney is not required to form an LLC. However, it can be helpful to consult an attorney or use an online business formation service to ensure all requirements are met.

What is the Difference Between an LLC and Sole Proprietorship?

An LLC provides a separate legal entity and protects personal assets, while a sole proprietorship doesn’t separate the owner from the business and liability. The tax implications differ as well.

What are the Tax Benefits of Having an LLC?

The tax benefits of having an LLC include the ability to pass profits and losses through to the owners’ personal tax returns and deduct business expenses. Consult with a tax professional to fully understand the benefits.

How Long Does it Take to Get an LLC?

The LLC formation time varies by state but generally takes anywhere from a few days to several weeks. The application and approval process can be expedited for an additional fee.


Forming an LLC is an important step to protect your business and personal assets. By following the steps outlined in this article, avoiding common mistakes, understanding the costs, and seeking professional assistance, you’ll be on your way to forming a successful LLC.

Remember to conduct thorough research, obtain necessary licenses and permits, and stay up-to-date on legal and tax obligations.

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