How to start an LLC: A national guide for entrepreneurs

If you're ready to turn your idea into a real business, this guide walks you through exactly how to form an LLC, what to expect, and how to avoid unnecessary expenses. Although states do require a filing fee, everything else—from your EIN to most of the paperwork—can be completed for little or no additional cost when you handle it yourself.

Why form an LLC

An LLC legally separates your business and personal life. While it does cost money to form, the protection and long-term benefits can save you thousands.

Liability protection: Your personal assets are shielded from most business debts or lawsuits.
Professional credibility: Makes your business appear established and trustworthy.
Funding eligibility: Grants, loans, vendor credit, and many banks require an LLC.
Simple taxes: Pass-through taxation keeps things flexible.

Important: ALL states charge a filing fee. There is currently no state where an LLC is $0 to form.

Step-by-step: Form an LLC anywhere in the U.S.

1. Check your state’s filing fee

LLC filing fees range from about $40–$500 depending on state. Some states also require annual reports or franchise taxes.

Tip: Avoid filing in a “cheap” state unless you actually operate there — or you may have to pay foreign LLC fees in your home state.

2. File your Articles of Organization

Visit your state’s official Secretary of State portal.
Fill out the Articles of Organization online.
Use yourself as Registered Agent (if allowed) to save $100–$300/year.
Pay your state’s required filing fee.

This is the only mandatory upfront cost.

3. Get your EIN — this part is always FREE

Apply only through IRS.gov.
Instant approval online.
Needed for banking, taxes, and funding.

Apply for an EIN (Free)

4. Create an Operating Agreement

Use a free template — it becomes your internal rules document.

Ownership percentages
Voting rules
Profit distribution
Roles & responsibilities

5. Open a business bank account

Bring your LLC approval and EIN.
Many banks offer free business checking.
Separating funds protects your liability shield.

Save money: Realistic workarounds

Start as a Sole Proprietor: The only truly $0 option while saving for LLC fees.
Be your own Registered Agent: Saves $100–$300 yearly.
Use free tools: Canva, Google Docs, Payhip, Wave Accounting, Stripe.
DIY everything: Avoid paid filing companies unless you truly need support.
Apply for grants later: Many accept businesses formed within the last 12 months.

Reminder: LLC filing fees are mandatory. Your goal is to minimize costs — not avoid legal requirements.

Low-cost states (at a glance)

No state offers a free LLC. But historically lower-cost states include:

Kentucky (~$40)
Mississippi (~$50)
Arizona (~$50)
Colorado (~$50)
Missouri (~$50)

File where you operate: Avoid double fees.
Review annual fees: Some states are cheap to start but expensive to keep.
Consider compliance: Choose a state that makes things simple for your business type.

Quick checklist

Choose your state
Submit Articles of Organization
Get your EIN (free)
Create an Operating Agreement
Open business banking
Apply for funding & grants

Common questions

Can I form an LLC with no money?

Not fully — you must pay your state’s filing fee. But you can reduce every other cost and start your business activities as a sole proprietor for $0 while saving for the filing.

Should I file in a cheap state?

Usually, no. If you operate in another state, you may be required to register as a foreign LLC and pay both states' fees. Filing in your home state is almost always the cheapest long-term option.

Do I need a lawyer?

Not for simple single-member or basic multi-member LLCs. Most people file themselves using state instructions. Use a lawyer only for complex ownership or high-risk industries.