How to Form an LLC in 2026: The No-BS Step-by-Step Guide

Forming an LLC is one of those things that sounds complicated but really isn't. The process takes 7 steps, most of which you can complete in an afternoon. Here's exactly what to do — no upsells, no fear tactics, just the information you need.

Step 1: Choose Your State

For most people, the answer is simple: form in the state where you'll be doing business. That's usually your home state.

Ignore the advice to form in Delaware or Wyoming unless you have a specific reason (holding company, multi-state operations, VC fundraising). If you live in Texas and run a business from Texas, form in Texas. Forming elsewhere means you'll need to foreign-qualify in Texas anyway, paying fees in two states for no benefit.

The exceptions: if you're forming a holding company, an online-only business with no physical presence, or raising institutional funding. In those cases, Wyoming (for privacy/cost) or Delaware (for VC/corporate law) may make sense.

Step 2: Choose Your LLC Name

Your LLC name must:

• Include "LLC," "L.L.C.," or "Limited Liability Company"
• Be distinguishable from other businesses registered in your state
• Not include restricted words (like "Bank" or "Insurance") without additional licensing

Check name availability on your state's Secretary of State website — it's free. Most states let you search their business database online. If your desired name is taken, you'll need an alternative.

Pro tip: also check if the matching domain name is available, even if you don't plan to build a website immediately. It's easier to secure it now than to rebrand later.

Step 3: Choose a Registered Agent

Every LLC needs a registered agent — a person or service designated to receive legal documents (lawsuits, state notices, tax forms) on behalf of your business.

You can be your own registered agent in most states, but there are downsides:

• Your home address becomes public record
• You must be available at that address during business hours
• You'll receive a flood of junk mail from companies that scrape state filings

Registered agent services cost $50-$125/year (or free for the first year with Sedes). They provide a business address, accept legal documents on your behalf, and keep your personal address off public records.

Step 4: File Articles of Organization

This is the official formation document. In most states, it includes:

• LLC name
• Registered agent name and address
• Principal office address
• Member/manager information (required in some states, optional in others)
• LLC purpose (most states accept "any lawful purpose")
• Effective date

File online through your state's Secretary of State website. Filing fees range from $40 (Kentucky) to $500 (Massachusetts). Most states fall in the $50-$200 range.

Processing times vary wildly: 1-2 business days in Texas, 2-4 weeks in New York, 6-8 weeks in some states during peak season. Expedited processing is available in most states for an additional fee ($25-$100).

Step 5: Get Your EIN (It's Free)

An EIN (Employer Identification Number) is your LLC's tax identification number, issued by the IRS. You need it to:

• Open a business bank account
• File taxes
• Hire employees
• Apply for business licenses

This is free. Do not pay anyone for it.

Apply online at IRS.gov/EIN. The online application takes about 10 minutes, and you receive your EIN immediately. It's available Monday through Friday, 7 a.m. to 10 p.m. Eastern.

If a formation service tries to charge you $70-$99 for "EIN filing," they're charging you to fill out a free government form. At Sedes, we handle EIN filing for you at no charge.

Step 6: Create an Operating Agreement

An operating agreement is an internal document that defines how your LLC operates: ownership percentages, management structure, profit/loss distribution, voting rights, and what happens if a member leaves.

Not every state legally requires one, but you should have one regardless. Here's why:

• Banks require it. Most banks want to see an operating agreement before opening a business account.
• It protects your liability shield. Having proper corporate documents strengthens the legal separation between you and your LLC.
• It prevents disputes. Even single-member LLCs benefit from documenting how the business operates.
• Some states require it. New York, California, Missouri, Maine, and others require operating agreements by law.

Key sections to include:

1. Member names and ownership percentages
2. Management structure (member-managed or manager-managed)
3. Capital contributions
4. Profit and loss allocation
5. Voting rights and decision-making
6. Transfer of membership interests
7. Dissolution procedures

Sedes generates a customized operating agreement during the formation process, based on your specific answers about your business structure.

Step 7: Handle Post-Formation Tasks

Your LLC is formed. Now what?

• Open a business bank account. You'll need your Articles of Organization, EIN, and operating agreement. Keep business and personal finances completely separate.
• Get necessary licenses and permits. Check your city and county requirements. Most businesses need at least a local business license.
• Set up accounting. Even a simple spreadsheet works to start. Track all income and expenses from day one.
• Understand your tax obligations. Single-member LLCs report on Schedule C. Multi-member LLCs file Form 1065. Learn your quarterly estimated tax deadlines.
• Mark your calendar for annual reports. Most states require annual or biennial reports. Missing one can result in your LLC being administratively dissolved.

That's it. Seven steps, no mystery. The whole process can be completed in a day if your state has fast processing (or a few weeks if not).

Sedes handles steps 3, 4, 5, and 6 for you in about 10 minutes, with our AI guiding you through a simple conversation. The rest — name selection, bank accounts, licenses — we provide guidance on but leave in your hands.