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LLC formation

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Form your US LLC the clear way

A limited liability company is the most common way founders start a US business: flexible to run, simple to own and taxed by default as a pass-through. Firmlane prepares and processes your formation, shows every government fee before you pay, and keeps you informed until your state approves the filing.

  • $0 Firmlane service fee on eligible standard formations
  • State filing fee set by your state and shown separately before you pay
  • EIN assistance included on eligible orders, at no Firmlane fee
  • First year of registered agent service included on eligible orders
Start your LLC See state filing fees

At a glance

The LLC in eight lines

  • What it is

    A business structure created under state law, separate from its owners.

  • Owners

    Called members. Individuals, corporations, other LLCs and foreign persons can generally be members.

    The IRS notes that most states do not restrict LLC ownership and that there is no maximum number of members.

  • Formation document

    Articles of organization (called a certificate of formation in some states, such as Delaware).

  • Internal rulebook

    An operating agreement, usually kept on file rather than filed with the state.

  • Default federal tax

    One member: disregarded entity. Two or more members: partnership.

    An LLC can elect to be taxed as a corporation with Form 8832, or as an S corporation with Form 2553 if it qualifies.

  • Registered agent

    Required in the state where the LLC is formed.

  • Ongoing state upkeep

    Annual reports, franchise taxes or annual fees, depending on the state.

  • Who can form one

    Founders anywhere. US citizenship or residency is not required to form an LLC.

Why founders pick an LLC

Liability protection without corporate formality

An LLC is a legal entity of its own. When it signs a lease, takes a payment or owes a supplier, the obligation generally belongs to the company, not to you personally. The SBA describes the LLC as a structure that can protect owners from personal liability in most instances, while letting profits and losses flow through to the owners' personal tax returns.

Compared with a corporation, an LLC has fewer built-in formalities. There are no shares, no required board of directors and no bylaws. Instead, the members agree on how the company is run in an operating agreement, which can be as simple or as detailed as the business needs.

That flexibility is why LLCs are popular with consultants, agencies, e-commerce sellers, software businesses that plan to stay owner-funded, and holding companies. If you expect to raise venture capital or issue stock options, read about the C corporation before you decide.

  • Limited liability for members, subject to how the business is actually run
  • Pass-through taxation by default, with the option to elect corporate treatment
  • Flexible ownership splits and management structure
  • Fewer ongoing formalities than a corporation

Federal tax basics

How an LLC is taxed

An LLC is a state law entity, not a federal tax category. The IRS assigns it a default classification based on how many members it has, and the LLC can choose a different one.

Single-member LLC

By default, the IRS treats a single-member LLC as a disregarded entity: for income tax purposes it is not separate from its owner. A US individual owner usually reports the business on their personal return (for example, on Schedule C). The LLC is still treated as a separate entity for employment tax and certain excise taxes, and it uses its own EIN for those.

Multi-member LLC

A domestic LLC with two or more members is classified as a partnership by default. The LLC files a partnership return (Form 1065) and each member reports their share of income or loss.

Choosing a different classification

An eligible LLC can elect to be taxed as a corporation by filing Form 8832. An LLC that meets the S corporation tests can instead file Form 2553, and the IRS instructions say an eligible entity making that election does not also need Form 8832. S corporation status is not available when any owner is a nonresident alien. See S corporation election help for the rules and how Firmlane helps eligible LLCs file Form 2553.

Foreign-owned single-member LLCs

If a single-member LLC is wholly owned by a foreign person, it is still a disregarded entity, but it has an annual information filing: Form 5472 attached to a pro forma Form 1120, due by the Form 1120 due date. Reportable transactions include amounts like contributions to and distributions from the LLC. The IRS penalty for failing to file is $25,000, with additional penalties if the failure continues after IRS notice. Firmlane's tax preparation covers this filing, prepared by qualified tax professionals.

State taxes are separate

Each state sets its own annual fees, franchise taxes and income tax rules. For example, the Delaware Division of Corporations states that Delaware LLCs pay an annual tax of $400 due on or before June 1, with no annual report. Other states require an annual or biennial report, and some charge based on income or gross receipts.

Management

Member-managed or manager-managed?

You choose a management structure when you form the LLC. Neither is better in general; the right one depends on who will actually run the business.

  • Who runs the business

    Member-managed
    The members themselves, day to day.
    Manager-managed
    One or more named managers, who may or may not be members.

  • Who can usually sign and commit the LLC

    Member-managed
    Members, as set out in the operating agreement.
    Manager-managed
    Managers, within the authority the operating agreement gives them.

  • Common fit

    Member-managed
    Solo founders and small teams where every owner is involved.
    Manager-managed
    LLCs with passive investors, family holdings or an outside operator.

  • What the public record may show

    Member-managed
    Varies by state; some states list members.
    Manager-managed
    Varies by state; some states list managers instead of members.

  • What to put in writing

    Member-managed
    Voting, profit splits and what happens if a member leaves.
    Manager-managed
    Manager powers, limits, removal and how members approve major decisions.

State rules on disclosure differ. Firmlane shows the information your state asks for during setup.

Roles and documents

The vocabulary of an LLC, decoded

  • Members

    The owners of the LLC. Ownership percentages, voting rights and profit splits are set in the operating agreement and do not have to match capital contributions.

  • Managers

    In a manager-managed LLC, the people who run the business. A manager can be a member or an outside person.

  • Organizer

    The person who signs and submits the articles of organization. The organizer does not need to be a member and does not gain ownership by filing.

  • Registered agent

    A person or company with an address in the state who accepts legal papers and official notices for the LLC. Every state requires one.

    Registered agent service

  • Articles of organization

    The short public document that creates the LLC once the state accepts it: name, registered agent and the details your state requires.

  • Operating agreement

    The private agreement among members. Usually not filed with the state, but some states require LLCs to have one, and banks and investors commonly ask to see it.

How it works

From first click to an approved LLC

  1. 01

    Choose LLC

    Start in the formation wizard and pick a limited liability company. Not sure yet? The wizard explains the alternatives in plain language.

    A few minutes

  2. 02

    Pick your state and add details

    Choose the state of formation, enter up to three name choices, and tell us about members and management. Name availability is confirmed by the state, so we ask for backups.

  3. 03

    Review your order and optional services

    See the state filing fee, the $0 Firmlane service fee on eligible standard formations and any optional services. Nothing optional is pre-selected.

  4. 04

    Pay the applicable charges

    You pay the state filing fee and anything optional you chose. Every amount is shown before you confirm.

  5. 05

    Firmlane reviews and processes

    We check your information, ask if anything is missing and process the filing with the state. Each state sets its own processing times.

    Timing set by the state

  6. 06

    Track it in your account

    Follow each status in your dashboard, receive your approved documents, and continue with EIN assistance if it is part of your order.

Transparent pricing

What you pay for an LLC

Government fees and Firmlane fees are always shown separately. Here is how an eligible standard LLC order is put together.

Eligible standard LLC order

  • Firmlane service fee

    On eligible standard formations.

    $0

  • State filing fee

    Paid by you and shown before payment. See the state fee table.

    Set by your state

  • EIN assistance

    At no Firmlane fee on eligible orders. The IRS does not charge for an EIN.

    Included

  • Registered agent, first year

    On eligible orders. The renewal price is disclosed before you buy.

    Included

  • Optional services

    Priced upfront, never pre-selected, cancel per terms.

    Only if you choose them

You pay at checkout

The state filing fee plus any optional services you select

If your order includes any additional state charge, such as an expedite fee where a state offers one, it is shown before you pay.

View the state fee table

Guaranteed EIN within 4 weeks

The 4 weeks start once your company has been approved by the state and we have your complete EIN information.

How the EIN guarantee works

Scope

What LLC formation with Firmlane covers

Included

  • Guided setup that asks only for what your state and order need
  • Review of your information before anything is filed
  • Preparation and processing of your articles of organization with the state
  • Status tracking in your account, with your approved documents stored there
  • EIN assistance on eligible orders, at no Firmlane fee
  • First year of registered agent service on eligible orders

Not included

  • The state filing fee, which you pay and which is shown before payment
  • Legal or tax advice. Firmlane is not a law firm or accounting firm
  • Guaranteed name approval. Only the state can approve a name
  • A fixed state approval time. Each state sets its own processing times
  • Guaranteed bank account or payment processor approval. Our free banking assistance helps you apply
  • Ongoing annual reports and state taxes, unless you add a compliance service

Forming the LLC is step one. Keeping it in good standing is ongoing.

Most states require an annual or biennial report, an annual tax or fee, and a registered agent at all times. Missing them can lead to penalties and, eventually, loss of good standing or administrative dissolution.

Foreign-owned single-member LLCs also have the federal Form 5472 filing each year, even with no income. If you want reminders and help, see compliance and bookkeeping and tax.

Keep exploring

General information, not advice

This page is general information about US limited liability companies. It is not legal or tax advice, and it may not reflect the rules that apply to your situation. Firmlane is not a law firm, does not provide legal or tax advice and is not affiliated with any government agency. State processing times are set by each state and vary. EIN timing is covered by our EIN guarantee: Guaranteed EIN within 4 weeks. The 4 weeks start once your company has been approved by the state and we have your complete EIN information. The clock pauses while we are waiting for information or a signature from you. Your information must be complete and accurate, and the responsible party must be able to sign the IRS application. If your EIN is not delivered within 4 weeks, we keep working on it at no cost and refund every Firmlane fee you paid on the order, or $100, whichever is more. EINs are issued by the IRS. Firmlane prepares and submits your application through its established process and follows it through until your EIN is issued. Firmlane is not affiliated with the IRS. For advice, consult a qualified attorney or tax professional.

Official sources

Last reviewed

Fees, forms and rules change. We review these sources regularly; always confirm current details with the agency.

Ready to form your LLC?

Answer a few guided questions, review every fee before you pay, and track your filing in your account.

Start your LLC See pricing

$0 Firmlane service fee on eligible formations. You pay the state filing fee, shown before you pay.