I still remember sitting at my kitchen table at 11pm, laptop open, coffee gone cold next to me, staring at a Google search bar that just said “how to start LLC.” I’d been freelancing about eight months at that point, income finally looking decent, and my accountant (well… my cousin, who does taxes on the side and calls himself an accountant) told me I needed to “get an LLC before something bad happens to you legally.”
That was it. No explanation. Just vague dread.
So I did what most of us do. Spent a whole weekend down a rabbit hole of legal blogs, YouTube videos and Reddit threads, most of which either oversimplified everything or made it sound like you needed a law degree just to read the form. Two years later I’ve actually formed two LLCs (one for freelance writing, one for a small e-commerce side hustle) and I want to walk you through what I actually did, mistakes included, instead of the polished version you usually get.
Wait, Do You Even Need an LLC?
Before we get into the how, let’s slow down on the why for a second, because I almost skipped this and it would’ve cost me time and money.
An LLC (Limited Liability Company) basically separates you as a person from your business. If your business gets sued or racks up debt, your personal stuff, your car, your savings, your grandma’s china cabinet, is generally protected. Without one you and your business are legally the same thing, which is fine right up until it isn’t.
If you’re doing occasional freelance gigs and pulling in a few hundred bucks a month, you probably don’t need one yet. But if you’re invoicing clients regularly, hiring people, or selling physical products, it starts making a lot more sense. Investopedia has a decent breakdown of how LLCs differ from sole proprietorships if you want the textbook version.
I waited too long honestly. Operated as a sole proprietor for almost a year before filing, just because the process seemed intimidating. It really wasn’t.
Step 1: Pick Your State (This Trips Up a Lot of People)
Here’s something nobody told me upfront, you don’t have to form your LLC in some “business-friendly” state like Delaware or Wyoming just because a guy on YouTube says so.
I almost fell for this. Watched three different videos telling me Wyoming was “the best state for LLCs” because of low fees and privacy stuff. Got excited. Almost filed there.
Then I talked to an actual business attorney friend over coffee (free chat, not a paid consult) who asked me one simple question: where do you actually live and work?
I live in Texas. I work from Texas. Most of my clients found me through local networking here. Filing in Wyoming would’ve meant registering as a “foreign LLC” in Texas anyway, so I’d be paying fees in two states instead of one. For nothing.
Lesson learned: unless you’ve got a real reason (operating across multiple states, wanting Delaware’s court system for a bigger company down the line), just form your LLC where you actually live and work. It’s simpler. It’s cheaper. Don’t overthink it.
Step 2: Choose a Name (And Check It’s Actually Available)
This part was fun until it wasn’t.
I wanted to name my writing business something clever, I won’t embarrass myself telling you what, but when I ran it through my state’s business name database it was already taken. Not exactly, but close enough that the system flagged it as “too similar.”
Every state has an online database where you can search existing business names, mine was through the Texas Secretary of State site, yours will have something similar. Most states link out from the SBA’s state directory if you’re not sure where to look.
A few things I learned the hard way:
- Your name usually needs “LLC” or “Limited Liability Company” tacked on the end
- Skip restricted words like “Bank” or “Insurance” unless you’re actually licensed for that stuff
- Even if your state approves the name, check if the matching domain is free too. I used Namecheap to check mine and got approved before checking, my ideal domain was gone, ended up with an awkward “co” tacked on instead. You can also check trademark conflicts through the USPTO’s search tool before you get attached to a name
Step 3: Get a Registered Agent
This part confused me the most at first, not gonna lie.
A registered agent is basically a person or service that agrees to receive legal documents for your business during normal business hours. You can technically be your own registered agent if you’ve got a physical address in the state (not a PO box) and don’t mind that address becoming public record.
I didn’t want my home address floating around some public database forever, so I paid for a registered agent service instead. Went with Northwest Registered Agent because a few small business owners in a Facebook group I’m in recommended them, and their customer service actually picks up the phone. Sounds like a low bar, isn’t really, in this industry.
Cost me around $125 a year. People also use ZenBusiness or LegalZoom for this, though honestly I found their upsells kind of annoying.
Step 4: File Your Articles of Organization
This is the actual “forming the LLC” part. Sounds official and scary. It’s really just a form.
You fill it out through your state’s Secretary of State website (or Division of Corporations, whatever your state calls it). Usually asks for:
- Your LLC’s name
- Registered agent info
- Business address
- Purpose of the business (I just put “general business purposes,” don’t overthink this one)
- Member/manager info, that’s you if you’re solo
Filing fees are all over the place depending on state. Mine in Texas was $300. Kentucky’s like $40. Massachusetts wants $500. No real way around it, just look up your state’s fee before you start so you’re not surprised. NerdWallet keeps a running list of state LLC filing fees that’s worth a look too.
Filed mine online, got confirmation back in about 3 business days. My second one, different state, took almost three weeks because of some processing backlog. So don’t panic if it’s not instant, but also don’t wait till the last minute if you’ve got a deadline, like needing an EIN before a client can pay you.
Step 5: Get Your EIN (It’s Free, Don’t Pay for This)
This is where I actually got a little scammed, and I want to save you from doing the same thing.
An EIN (Employer Identification Number) is basically a Social Security number for your business. Need it to open a business bank account, file taxes, and sometimes to get paid by clients who require a W-9.
I googled “get EIN,” clicked the first result, and it was some third-party site charging $75 to “process” my application. Paid it. Found out later you can get one straight from the official IRS EIN application page for free, takes maybe 10 minutes, and it’s instant if you’re a US citizen or resident applying online.
Just go to irs.gov directly. Don’t let anyone charge you for this, please.
Step 6: Open a Business Bank Account
Once you’ve got your EIN and formation docs, take them to a bank. I use Chase Business Banking because the branch was near my apartment and they had a business checking account with no monthly fee as long as I kept a minimum balance. Other people I know use Bluevine or Mercury if they want something fully online.
This step matters more than people think. Mixing personal and business money (they call it “commingling funds”) can actually undo your liability protection if you ever get sued. A lawyer explained it to me like this: if you don’t treat your business like a separate thing, courts might not either.
I use a separate debit card for literally everything business related now, software subscriptions, client lunches, even the honestly embarrassing amount I spend on stock photos through Adobe Stock.
Step 7: Get an Operating Agreement (Even If You’re Solo)
Skipped this at first because I figured, it’s just me, why do I need an agreement with myself?
Turns out some banks require it just to open your account, and it’s genuinely useful to have if you ever bring on a partner, apply for a loan, or need to prove how your business is actually structured. Nolo has a good explainer on why single-member LLCs still need one.
Used a free template from Rocket Lawyer for my first one, then had an actual lawyer review a template for the second business once it started making real money. Templates are fine for simple, single-member LLCs though, don’t stress over this one too much.
Mistakes I’d Avoid If I Started Over
A few things I learned the hard way, doing this twice:
Didn’t budget for ongoing costs. Most states want an annual report or franchise tax filing and it’s so easy to forget about. Texas requires a “No Tax Due” report every year through the Texas Comptroller’s office, which I completely missed the first year and got a late notice for. Fun surprise.
Underestimated how long name searches can drag on. Give yourself a few days of buffer before you actually need the LLC done, especially if your first pick gets rejected.
Thought LLC automatically meant tax benefits. It doesn’t, not by default anyway. People throw “LLC tax advantages” around like it’s magic. A single-member LLC is taxed just like a sole proprietorship unless you actively elect S-corp status with the IRS, and honestly that only makes sense once you’re earning decent, consistent money. I’d talk to a real accountant before making that call, not a cousin who “does taxes on the side.”
Final Thoughts
Starting an LLC felt like this huge scary hurdle in my head for way longer than it needed to. In reality, once I actually sat down and did it, the whole thing took maybe three hours spread out over a week, plus some waiting time for the state to process everything.
If you’re on the fence, here’s my honest take: don’t form an LLC just because some YouTube ad scared you into it with “protect your assets NOW” energy. Form one when your business activity actually justifies the protection and the paperwork that comes with it. The SBA’s business guide is a solid starting point if you want to read more before deciding. And when you do, just take it one step at a time, name search, registered agent, articles of organization, EIN, bank account, operating agreement. That’s really the whole thing.