If you just got your LLC approved, here is what to do next: get a federal tax ID, put an operating agreement in writing, open a dedicated bank account, decide how the IRS will tax the business, plan for self-employment tax and quarterly payments, handle sales tax and licenses if they apply to what you sell, buy the right insurance, and calendar your state’s annual filing. Approval of your Articles of Organization made the LLC a legal entity. It did not make it an operating business. The steps below close that gap.
Get Your EIN
The Employer Identification Number is the nine-digit federal tax ID the IRS assigns to your business. You need it before you can open a bank account, hire anyone, or file a return for the LLC. The free online application on the IRS website issues the number immediately on approval; a mailed Form SS-4 takes four to five weeks.1Internal Revenue Service. Get an Employer Identification Number2Internal Revenue Service. Instructions for Form SS-4 – Application for Employer Identification Number
The application asks for the LLC’s exact legal name, mailing address, and the name and taxpayer ID of the “responsible party.” The IRS defines that person as the individual who ultimately owns or controls the entity and can direct how its funds and assets are used.3Internal Revenue Service. Instructions for Form SS-4 For a single-member LLC, that’s you. For a multi-member LLC, it’s usually the managing member.
When the number comes through online, print the confirmation notice (the CP 575) and keep it somewhere you can find it. Banks, lenders, and clients will ask for it, and the IRS does not reissue the original. You can request a verification letter later, but having the CP 575 on hand saves time when you’re trying to open accounts.
Write an Operating Agreement
An operating agreement is the internal contract that says who owns what percentage, how profits and losses are split, who can sign for the company, and what happens if a member leaves or a new one joins. Even in states that don’t require one by statute, every LLC should have a written agreement, because without one your state’s default rules fill the gap, and those defaults rarely match what the members actually want.4U.S. Small Business Administration. Basic Information About Operating Agreements
Single-member LLCs need one too. Signing a contract with yourself feels odd, but the agreement is strong evidence that you treat the LLC as a separate entity. When courts weigh whether an LLC’s liability shield should hold, they look at whether the owner respected the formalities. Nothing on paper is an opening argument that the LLC was just the owner by another name.
You don’t file the agreement with anyone. Keep the signed original with your Articles of Organization and EIN confirmation. Common provisions worth including: each member’s initial capital contribution, how additional contributions work, voting rules on major decisions, restrictions on transferring ownership, and what triggers dissolution.
Open a Business Bank Account
Mixing personal and business money is the fastest way to lose the liability protection you paid to create. When a court sees business expenses paid from a personal account and personal purchases run through the business, the LLC starts to look like a fiction, and a judge can hold the owner personally responsible for company debts.
A dedicated business checking account keeps records clean and makes tax season much simpler. Bring your filed Articles of Organization, your signed operating agreement, your CP 575, and government-issued photo ID for every member or manager on the account. Most banks want an in-person meeting, a signature card, and an opening deposit. Minimums vary, so call ahead.
Once the account is open, run every business transaction through it. Pay yourself a documented owner’s draw rather than dipping into the business account for personal expenses. That paper trail is what keeps the shield intact.
Decide How the LLC Will Be Taxed
The IRS doesn’t recognize “LLC” as a tax category. It assigns a default based on how many members you have. A single-member LLC is a disregarded entity, with income and expenses flowing to the owner’s personal return, typically on Schedule C. A multi-member LLC is taxed as a partnership and files Form 1065.5Internal Revenue Service. Limited Liability Company (LLC)
Those defaults work for most new businesses, but you have two other options:
- S-corporation election on Form 2553. The LLC stays an LLC under state law but is taxed like an S-corp. The appeal is lower self-employment tax: shareholders take a reasonable salary (subject to payroll taxes) and the rest as distributions (not subject to self-employment tax). The cost is payroll complexity and stricter rules. To make the election effective for the current tax year, file no later than two months and 15 days after the start of that year. For calendar-year businesses, that means March 15.6Internal Revenue Service. Instructions for Form 2553
- C-corporation election on Form 8832. The entity pays corporate income tax and profits are taxed again on distribution. Rarely a fit for small LLCs, but useful for companies that plan to reinvest heavily or raise venture capital. Form 8832 can take effect no more than 75 days before filing and no more than 12 months after.7Internal Revenue Service. About Form 8832, Entity Classification Election
If you do nothing, the default classification applies. That’s a reasonable choice for most new LLCs, but make it on purpose. Talk to a tax professional before the Form 2553 deadline, because the S-corp election can save a profitable business thousands in self-employment tax.
Set Aside Money for Self-Employment Tax and Quarterly Payments
This is where new owners get surprised. If your LLC is taxed as a disregarded entity or partnership, every dollar of profit is subject to self-employment tax on top of income tax. The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare.8Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The Social Security portion applies to the first $184,500 of net earnings in 2026; the Medicare portion has no cap.9Social Security Administration. Contribution and Benefit Base
No one withholds anything from your profits. You send the IRS estimated payments four times a year. For 2026, the due dates are April 15, June 15, September 15, and January 15, 2027.10Internal Revenue Service. 2026 Form 1040-ES Miss them and you owe an underpayment penalty calculated at the IRS’s quarterly interest rate, even if you pay the full balance with your annual return.11Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty
Memorize the safe harbor: you generally avoid the penalty if you pay at least 90% of the current year’s tax or 100% of last year’s tax, whichever is less. If your adjusted gross income was over $150,000 last year, that second figure is 110%.12Internal Revenue Service. Estimated Taxes In your first year, with no prior-year LLC return to anchor to, estimating is harder. A common rule of thumb is to set aside 25% to 30% of profit to cover both income tax and self-employment tax.
Register for Sales Tax If It Applies
If your LLC sells taxable goods or services, you likely need a seller’s permit (sometimes called a sales tax certificate) from each state where you have a tax obligation. Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire, and Oregon. In every other state, once you establish “nexus,” you need to register, collect tax from buyers, and remit it on a set schedule.
Nexus comes in two forms. Physical nexus means a tangible presence in the state: an office, warehouse, employees, or inventory stored there. Economic nexus means your sales into the state cross a dollar threshold, which in most states is $100,000 a year. Online sellers can trigger economic nexus without ever visiting the state.
Registration is usually free or costs a few dollars, and most states handle it through their department of revenue website. Don’t wait until after your first sale. Collecting sales tax without a permit is illegal in some states, and failing to collect it when you should means you’ll owe the tax out of pocket, plus penalties and interest.
Buy the Insurance Your Business Actually Needs
The LLC limits your personal liability. It doesn’t protect the business itself from claims that can drain the operating account. Three policies cover most new LLCs:
- General liability insurance covers bodily injury, property damage, and the legal costs that follow. Nearly every business should carry it.13U.S. Small Business Administration. Get Business Insurance
- Professional liability insurance covers errors, negligence, or malpractice in services you provide. Important for consultants, accountants, designers, and anyone whose work product clients rely on.
- Workers’ compensation is required in nearly every state once you hire your first employee. The exact trigger varies, and in some states LLC members themselves count as employees for coverage purposes. Operating without required coverage can bring fines, lawsuits, or criminal charges.
Depending on the industry, you may also need commercial auto, product liability, or cyber liability coverage. An insurance broker who works with small businesses can build a package that fits without overcharging you for coverage you don’t need.
Pull Your Local and State Licenses
Forming the LLC at the state level does not give you permission to open the doors. Most cities and counties require a general business license or tax certificate before you can operate within their borders, and the requirements depend on where you’re located and what you do.
Many industries also need a specialized license from a state board. Construction, healthcare, food service, real estate, and cosmetology are common examples. Start with your city or county clerk’s office, then check with your state’s occupational licensing agency to see whether your profession is regulated.
Applications typically ask for your EIN, proof of any required insurance, and a fee. Most jurisdictions want licenses displayed at your place of business, and most need to be renewed on a schedule. Operating without the right license can trigger daily fines and, in serious cases, forced closure.
Keep the LLC in Good Standing
Your obligations to the state didn’t end at approval. Most states require an annual or biennial report, sometimes called a Statement of Information, confirming your business address, registered agent, and current members or managers. Filing fees range from nothing in a few states to several hundred dollars elsewhere, and due dates vary. Missing one can mean late fees, loss of the right to sue in state court, and eventually administrative dissolution. Set a calendar reminder at least 30 days before your filing deadline.
Franchise and Annual Minimum Taxes
Some states charge a franchise tax or annual minimum tax on LLCs separate from the annual report fee. These apply simply for the privilege of doing business in the state, whether or not the LLC earned any revenue. Amounts vary widely: some states charge a flat fee under $100, others charge $800 or more a year even with no income. Check your state’s department of revenue so the bill doesn’t surprise you.
Foreign Qualification in Other States
If your LLC does business in states beyond the one where it was formed, you may need to register as a “foreign LLC” in each of them. Typical triggers include a physical office, warehouse, or employees in the other state. Skipping registration is a bigger problem than it sounds: most states will refuse to let your LLC file suit in their courts to enforce a contract or collect a debt, and they’ll assess back taxes and penalties for the period you operated without authorization.
Beneficial Ownership Reporting
You may have heard about the Corporate Transparency Act requirement to file beneficial ownership information with FinCEN. As of March 2025, FinCEN removed the requirement for entities created in the United States. Domestically formed LLCs and their beneficial owners are exempt, and FinCEN has said it will not enforce reporting penalties against U.S. companies or their owners under the current rule.14Financial Crimes Enforcement Network (FinCEN). FinCEN Removes Beneficial Ownership Reporting Requirements for US Companies and US Persons The requirement now applies only to foreign-formed entities registered to do business in the U.S. Keep an eye on it in case the rule changes again, but for now, a domestic LLC has nothing to file.