To register a company in the US, you file formation documents with a state government, obtain a federal Employer Identification Number from the IRS, and then handle the licenses, bank account, and compliance items that let the business actually operate. State filing fees run roughly $35 to $500 depending on where you form, and the whole process can be completed in a few business days online if your paperwork is in order. The steps below work in sequence, and most of the common mistakes come from skipping one.
Pick a Business Structure First
Your structure decides what you file, how you are taxed, and whether your personal assets are exposed if the business is sued. There is no universally best choice.
A sole proprietorship is the default when one person does business without forming an entity. Nothing gets filed at the state level to create it. The cost of that simplicity is that you and the business are legally the same person, so personal assets are reachable for business debts and lawsuits. A general partnership works the same way for two or more owners, with profits and losses flowing to each partner’s personal return and the same unlimited personal liability.1Internal Revenue Service. Partnerships – Tax Information for Partnerships
A limited liability company separates your personal finances from the company’s obligations. If the business is sued or cannot pay its debts, creditors generally cannot reach your house or savings. LLCs also offer flexibility in how profits are split and can elect to be taxed as a partnership, sole proprietorship, or corporation.2Internal Revenue Service. Forming a Corporation
A corporation is a separate legal entity that can issue stock, which makes it the standard choice when you expect outside investment. A C corporation pays its own income tax, and shareholders pay tax again on dividends. An S corporation avoids that double layer by passing profits through to shareholders, but the IRS caps S corps at 100 shareholders, all of whom must be U.S. citizens or residents.2Internal Revenue Service. Forming a Corporation
Choose the State Where You’ll Form
Most small businesses should form in the state where they actually operate. If your office, employees, and customers are all in one state, forming there keeps costs and paperwork down.
Forming in a different state usually means you still have to “foreign qualify” at home, which means paying formation fees twice, maintaining two registered agents, and filing two sets of annual reports. Delaware is the traditional pick for companies expecting significant investment or an eventual public offering, because its Court of Chancery handles corporate disputes without juries and the body of case law makes outcomes more predictable. Nevada attracts some businesses with its lack of state corporate income tax. Neither offers a shortcut for a company whose activity is actually located somewhere else.
If your company does business in multiple states, through employees, a physical location, or significant sales, you may need to register as a foreign entity in each one. Each state sets its own threshold for what counts as doing business there, and operating without registering can lead to fines, back taxes, and loss of access to state courts.
Clear and Reserve a Name
Every state requires your company name to be distinguishable from entities already on file. Search the business entity database on the secretary of state’s website in your formation state before you commit. These databases are generally free. If your preferred name is too close to an existing one, the state will reject the filing.
Formal entities also have to signal their structure in the name itself. LLCs typically need “LLC” or “Limited Liability Company.” Corporations need “Inc.,” “Corp.,” “Incorporated,” or similar. Sole proprietors and partnerships operating under something other than the owner’s legal name generally need to file a “doing business as” (DBA) registration, also called an assumed name or fictitious name filing, at the state or county level.
If you need time to prepare documents or secure funding, most states let you reserve a name for a small fee. Reservations typically hold the name for 60 to 120 days.
Appoint a Registered Agent
Every LLC and corporation has to name a registered agent in the state of formation. This is the person or company authorized to receive lawsuits, government notices, and tax correspondence for the business. All 50 states require one, and your formation filing will be rejected without this designation.
The agent must have a physical street address in the state. A P.O. box does not qualify. The agent also has to be available during normal business hours, typically Monday through Friday, 9 a.m. to 5 p.m., because a process server has to be able to hand over legal papers in person. You can act as your own registered agent if you meet those requirements. Many owners instead use a commercial registered agent service, which keeps a home address off public records and runs $50 to $300 per year.
File the Formation Document
The core filing for an LLC is called articles of organization. For a corporation it is articles of incorporation. Both go to the secretary of state’s office (or equivalent agency) in your formation state. The forms typically ask for the company name, the registered agent’s name and address, the organizers or incorporators, a principal business address, and a statement of purpose. Most filers use broad language like “any lawful business activity” to avoid having to amend the document later.
Corporations also have to define their stock structure in the articles: the number of authorized shares and, in some states, a par value per share. Many companies set par value at a nominal amount like $0.01 or $0.001 to keep initial franchise tax costs low.
Most states accept online filings through the secretary of state’s website. You create an account, complete the form or upload a PDF, and pay by card. Online filings are typically processed within a few business days. Paper filings can take several weeks. Filing fees range from $35 to $500 across the states, with the average LLC fee around $130. If you need the entity active quickly, many states offer expedited processing for an extra fee.
Once the state approves the filing, you receive a certificate of formation, also called a certificate of organization or existence. Keep it. Banks, lenders, landlords, and licensing agencies will ask to see it. Some transactions, including financing and acquisitions, require a separate certificate of good standing that confirms the company is current on its state filings. You can request that from the secretary of state for a small fee.
Write Your Operating Agreement or Bylaws
Formation documents cover what the state needs to know. The actual operating rules for your company go in internal documents you keep on file. For an LLC, that is the operating agreement. For a corporation, it is the bylaws. Neither gets filed with the government.
An operating agreement sets each member’s ownership percentage, how profits and losses are divided, voting rights, what happens if a member leaves or dies, and how major decisions are made. Even a single-member LLC benefits from one, because it reinforces the legal separation between the owner and the business. Some states require an operating agreement by law.
Corporate bylaws cover the same ground for corporations: the roles of directors and officers, how meetings are called and run, how shares are transferred, and how the board is elected. Running a formal entity without written internal rules invites disputes and looks bad to anyone doing due diligence on the company.
Get an EIN and Open a Business Bank Account
An Employer Identification Number is a nine-digit number the IRS assigns to a business for tax filing and reporting. Any entity that plans to hire employees, open a bank account, or file federal returns needs one. You apply free on the IRS website, and online applications filed during business hours generate the number immediately.3Internal Revenue Service. Instructions for Form SS-4
The application asks you to name a “responsible party,” meaning the individual who ultimately owns or controls the entity, and that person must provide a Social Security Number or Individual Taxpayer Identification Number. Because the IRS uses this to tie the entity to a real person, you cannot get an EIN until the state has already approved your formation documents.4Internal Revenue Service. Responsible Parties and Nominees
With your EIN and certificate of formation, you can open a business bank account. Banks commonly ask for the EIN confirmation letter, formation documents, any operating or ownership agreements, and a government-issued ID for the signer.5U.S. Small Business Administration. Open a Business Bank Account Open it before the company starts transacting. Mixing personal and business finances is one of the fastest ways to lose the liability protection the entity was created to provide.
Licenses, Permits, and Sales Tax
State registration creates your legal entity. It does not, by itself, authorize you to operate. Depending on your industry and city, you may need a local business license, a health department permit, zoning clearance, a professional license, or some combination. Restaurants, contractors, childcare providers, and healthcare businesses face especially heavy licensing requirements. General business license fees at the city or county level typically run $50 to $400 per year, though some cities do not require one at all.
If you sell taxable goods or services, you will likely need to register for a sales tax permit in your state. After the Supreme Court’s 2018 decision in South Dakota v. Wayfair, states can also require out-of-state sellers to collect sales tax once they cross an economic activity threshold, commonly $100,000 in annual sales. For online or multi-state sellers, tracking where sales tax obligations exist is an ongoing task, not a one-time setup.
If You’ll Have Employees
Before anyone starts work, you have to be ready for a short list of federal requirements. Every U.S. employer must complete Form I-9 for each hire, verifying identity and work authorization. The employee fills out their section and presents acceptable documents, which you examine and record. Keep completed I-9s on file for three years after the hire date or one year after the employee leaves, whichever is later.6USCIS. I-9, Employment Eligibility Verification
Federal law also requires specific workplace posters where employees can see them. The exact set depends on size and industry, but most employers need at minimum the Fair Labor Standards Act poster (minimum wage and overtime), the OSHA workplace safety poster, and the USERRA poster covering military service rights. Employers with 50 or more employees also post the Family and Medical Leave Act notice.7U.S. Department of Labor. Workplace Posters
Nearly every state requires employers to carry workers’ compensation insurance covering medical costs and lost wages for on-the-job injuries. Texas is a notable exception for most private employers, but opting out there exposes the employer to direct lawsuits from injured workers. In most states, the requirement kicks in with your first employee, so arrange coverage before bringing anyone on.
Hiring also triggers payroll tax duties: withholding and depositing federal income tax, Social Security, and Medicare from employee wages, under a deposit schedule the IRS assigns based on your prior tax liability.8Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide Businesses that expect to owe $1,000 or more in federal taxes for the year also have to make quarterly estimated tax payments.9Internal Revenue Service. Estimated Tax
Keep the Company in Good Standing
After formation, most states require an annual or biennial report confirming your business address, registered agent, and officers or managers. Fees range from $0 in a handful of states to over $800 in the most expensive. Miss a deadline and you get late fees. Keep missing and the state can administratively dissolve the entity, which strips away liability protection and the right to do business.
Some states also impose an annual franchise tax or minimum tax on entities formed there, separate from income tax. Factor that into the formation-state decision before you file.
Beneficial Ownership Reporting
The Corporate Transparency Act, passed in 2021, originally required most domestic companies to file Beneficial Ownership Information reports with the Financial Crimes Enforcement Network, identifying anyone who exercised substantial control or held at least 25% of the company. In March 2025, FinCEN issued an interim final rule exempting all domestic reporting companies and their beneficial owners from this requirement. Only entities formed under the laws of a foreign country and registered to do business in a U.S. state currently have to file.10Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting
Foreign reporting companies registered to do business in the United States before March 26, 2025, had a filing deadline of April 25, 2025. Those registered on or after that date must file within 30 calendar days of registration.11Federal Register. Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension FinCEN has signaled a final rule is coming, so the scope could change. If you are forming a domestic company in 2026, no BOI filing is currently required, but it is worth watching.