Deciding to start LLC formation is one of the most straightforward ways to establish a legal business entity with liability protection and tax flexibility. While the formation process itself is relatively simple, the decisions you make during setup — from choosing a state of formation to drafting your operating agreement — have lasting implications for your business.
Howard East’s corporate attorneys help entrepreneurs form LLCs across Illinois, Missouri, and New York.
Start LLC Step 1: Choose Your State of Formation
Most small businesses should form their LLC in the state where they primarily operate. While Delaware and Wyoming offer favorable LLC statutes, forming in a different state than where you do business means registering as a foreign LLC in your home state anyway — doubling your filing fees and compliance obligations without meaningful benefit for most businesses.
Start LLC Step 2: Choose a Name
Your LLC name must be distinguishable from existing entities registered in your state and must include a designator like “LLC” or “Limited Liability Company.” Check availability through your state’s Secretary of State website before committing to a name. Consider also checking federal trademark databases to avoid potential infringement issues.
Start LLC Step 3: File Articles of Organization
Articles of Organization (called a Certificate of Formation in some states) is the document filed with the state to officially create your LLC. It includes basic information: the LLC’s name, registered agent, principal office address, and whether the LLC will be member-managed or manager-managed.
Start LLC Step 4: Draft an Operating Agreement
Even if your state does not require an operating agreement, you need one. This document establishes the internal governance rules for your LLC — ownership structure, management authority, distribution provisions, and exit procedures. Without it, state default rules govern your LLC, which may not reflect your intentions.
Start LLC Step 5: Obtain an EIN and Set Up Banking
Apply for an Employer Identification Number from the IRS (free, available online). Open a dedicated business bank account and maintain strict separation between personal and business finances — commingling funds is one of the fastest ways to lose your liability protection.
After You Start LLC: Critical Next Steps
Once you start LLC formation and complete the basic steps, several additional actions ensure your business is fully protected and compliant. The first priority is registering with all required state and local agencies. In Illinois, file with the Illinois Secretary of State and check whether your municipality requires a local business license.
Tax elections can significantly impact your bottom line after you start LLC operations. By default, single-member LLCs are taxed as disregarded entities and multi-member LLCs as partnerships. However, you can elect S-corporation or C-corporation tax treatment by filing the appropriate forms with the IRS. The IRS business structures guide explains each classification. An Illinois business lawyer and tax advisor can help you choose the optimal election.
Insurance is essential protection that works alongside your LLC structure. General liability, professional liability, and property insurance cover risks that exceed your LLC’s assets. If your business involves employees, workers compensation insurance is typically required by law.
Compliance calendars help you maintain good standing after you start LLC operations. Annual report filings, franchise taxes, registered agent renewals, and operating agreement updates are recurring obligations. Missing these deadlines can result in administrative dissolution and loss of liability protection. A regulatory compliance lawyer can establish systems to track these deadlines.
Intellectual property protection should be addressed early. Register trademarks for your business name and logo, and ensure any proprietary processes or inventions are properly documented and protected in the LLC’s name. Working with corporate M&A attorneys ensures your IP strategy aligns with your business growth plans.
If you plan to bring on partners or investors, structure your operating agreement to accommodate future growth. Provisions for adding members, anti-dilution protections, and clear valuation methodologies prevent disputes down the road. A shareholder dispute lawyer can draft these protections, and a commercial litigation lawyer can help if conflicts arise despite careful planning.
Frequently Asked Questions: How to Start an LLC
How much does it cost to start an LLC?
State filing fees range from $50 to $500, with Illinois charging $150 for articles of organization. Additional costs may include registered agent services, operating agreement drafting, and business licenses. Professional legal assistance for comprehensive formation typically costs $500 to $2,000 depending on your business complexity.
How long does it take to start an LLC?
Most states process LLC filings within one to four weeks. Illinois typically takes five to ten business days for standard processing. Expedited processing is available for an additional fee, reducing the timeline to one to three business days in most states.
Do I need an attorney to start an LLC?
While basic filings can be done without an attorney, legal counsel ensures your LLC is properly structured for liability protection and tax efficiency. The operating agreement alone requires careful legal drafting to protect your interests and prevent costly disputes with future partners or members.
Work With Howard East
Ready to form your LLC? Schedule a consultation or call 833-952-3111.
This content is for informational purposes only and does not constitute legal advice.
