Question 1

How are LLCs taxed?

Accepted Answer

By default, a one-owner LLC is taxed like a sole proprietor and a multi-owner LLC like a partnership. Some choose other options. Ask a tax professional.

Question 2

Which state should I form in?

Accepted Answer

Usually the state where you do business. Forming elsewhere can mean extra fees and filings.

Question 3

How much does it cost to form an LLC?

Accepted Answer

It depends on your state. State filing fees range from under $100 to several hundred dollars, and some states charge a yearly fee too.

Question 4

Do I need an operating agreement?

Accepted Answer

Some states require one, and it’s a good idea everywhere. It sets out who owns what, who decides, and what happens if someone leaves.

Question 5

Can I be my own registered agent?

Accepted Answer

Usually yes, if you have a street address in the state and can be there during business hours to accept legal papers.

Question 6

LLC or sole proprietorship: what’s the difference?

Accepted Answer

A sole proprietorship is simple, but your personal things aren’t separate from the business. An LLC adds that separation and some paperwork and fees.

Question 7

Do I need a business license too?

Accepted Answer

Often yes. Your city, county or state may require licenses or permits depending on what you do. Check before you open.

Question 8

Do I really need a separate bank account?

Accepted Answer

Yes. Mixing personal and business money can weaken the protection an LLC gives you and makes taxes harder.

Common questions: Starting an LLC