Start Your LLC the Right Way — Free, in 6 Clear Steps.

You can absolutely start an LLC yourself — no lawyer required. The process is filing one document (the Articles of Organization) with your state and paying the fee. LLC School's free state guides walk you through every step. A lawyer is only worth it for complex situations like multiple owners with unusual ownership splits, raising investment, or specialized industries. For most single-owner and small multi-owner businesses, you can complete the entire process online in under an hour.

A sole proprietorship is automatic and free, but it offers no liability protection — if your business is sued or owes a debt, your personal assets (home, car, savings) are at risk. An LLC is a separate legal entity, so your personal assets are generally protected from business liabilities. Both are typically taxed the same way (pass-through), so the main reason to choose an LLC is that legal protection plus added credibility.

For the vast majority of people, the answer is your home state — the state where you live and run your business. Forming in a "cheaper" state like Wyoming while operating elsewhere usually backfires: you'll still have to register as a foreign LLC in your home state, paying fees in both states and doubling your paperwork. Out-of-state formation only makes sense in specific cases, like real estate investors who own property in another state.

It depends on your state and filing method. Online filings are often approved in a few minutes to a few business days, while mail filings can take two to four weeks. Many states offer expedited processing for an extra fee if you need it faster. Once your LLC is approved, getting your EIN from the IRS online is instant. Check your specific state's guide on LLC School for exact current processing times.

You need an EIN (Employer Identification Number) if your LLC has more than one member, hires employees, or elects corporate/S-Corp taxation. Even single-member LLCs usually want one, because most banks require an EIN to open a business bank account, and it lets you avoid giving out your Social Security number. The most important thing to know: an EIN is always free directly from IRS.gov. Never pay a third party for one.

By default, an LLC doesn't change your taxes much — profits pass through to your personal return, just like a sole proprietorship, and you pay self-employment tax (15.3% in 2026) on net earnings. The real tax savings come later: once your LLC profits are consistently high (often $40,000–$80,000+), you can elect to be taxed as an S-Corp, which can reduce self-employment tax. LLC School's tax guides explain exactly when this is worth it.

A registered agent is a person or company that receives legal documents and official state mail on your LLC's behalf. Every state requires one. You can be your own registered agent if you have a physical address in the state and are available during business hours — but many owners use a service to keep their home address off public records and avoid being served lawsuit papers in front of customers. Services typically cost $100–$300 per year.

Yes — this is essential, not optional. Keeping a separate business bank account is what preserves your LLC's liability protection. If you mix personal and business money ("commingling funds"), a court can "pierce the corporate veil" and hold you personally liable, defeating the entire purpose of forming the LLC. Open a dedicated account as soon as you have your approved formation documents and EIN.

As of a March 2025 FinCEN rule, LLCs formed in the United States by U.S. persons are exempt from the Beneficial Ownership Information (BOI) reporting requirement. The reporting obligation now applies primarily to foreign-formed entities registered to do business in the U.S. Because these rules have changed multiple times, always confirm the current requirement on FinCEN's official website before relying on it.