Formation guide (PDF)
All 14 pages: the steps, LLC vs corporation, who's who, names, addresses, registered agents, taxes, foreign owners, banking and protection.
Free formation guide
How to Form an LLC or Corporation: The Plain Guide
Who the members, managers and officers are, how to pick your name, what a registered agent does, and how the IRS taxes you. Read it before you file, and your filing goes right the first time.
14 pagesFree PDFChecklist included
Free download14-page guide plus checklist
The short answer
To form an LLC or corporation, you pick a structure and a state, choose a unique name, write a one-line business purpose, list a principal business address and a registered agent, name your owners and managers or officers, and file with the state. Then you get a free EIN from the IRS, sign an operating agreement or bylaws, and open a business bank account.
Steps10from structure to setup
EIN fee$0the IRS does not charge for it
Guide14pages, free to download
Download
Take the guide with you
Print it, share it with a partner, or keep it open while you fill out our application.
Application checklist (PDF)
One page. Everything our filing application asks for, with a box to tick and the guide page that explains it.
General guide. Each state has its own filing procedures, forms and fees. Our team handles the state side for you.
Step by step
The steps, start to finish
Ten steps. Our team does the state filing. You bring the answers.
- 01
Pick your structure
LLC or corporation. Most small businesses start as an LLC.
- 02
Pick your state
Usually the state where you work. Form somewhere else, and you also register at home.
- 03
Choose your name
Unique on the state record, with the right ending like LLC or Inc. Have three picks ready.
- 04
Write your purpose
One clear sentence on what the business does. Banks and licensing offices ask for it.
- 05
Set your principal address
The street address where the business is run. Banks and licenses go by it.
- 06
Name a registered agent
A person or company in the state that accepts legal and state notices for you.
- 07
List your people
Members and managers for an LLC. Shareholders, directors and officers for a corporation.
- 08
File with the state
The state approves your formation document. Timing depends on the state and expedite options.
- 09
Get your EIN
Your federal tax ID from the IRS. It is free. You need it for banking, payroll and taxes.
- 10
Finish setup
Operating agreement or bylaws, a bank account, local licenses and your annual report dates.
LLC or corporation
LLC vs corporation: what is different
Both protect your personal assets when you keep business money separate. The difference is how they are owned, run and taxed.
| LLC | Corporation | |
|---|---|---|
| Owners are called | Members | Shareholders |
| Who runs it | The members, or managers they choose | A board of directors, who appoint officers |
| Filed with the state | Articles of Organization (some states say Certificate of Formation) | Articles of Incorporation (some states say Certificate of Incorporation) |
| Internal rulebook | Operating agreement | Bylaws |
| Ownership | Percentages or units | Shares of stock |
| Default federal tax | Pass-through. Profit is taxed on the owners' returns | C corporation. The company pays its own tax |
| Upkeep | Lighter. Annual report and good records | More. Board meetings, minutes and stock records |
| Best fit | Solo owners, partners, local shops, real estate | Raising investor money, issuing stock, building to sell |
Who's who
Members, managers and corporate officers
Owners own it. Managers and officers run it. Sometimes that is the same person.
In an LLC
- Members are the owners. One owner is a single-member LLC; two or more is multi-member. Each member holds a percentage.
- Member-managed: every member runs the business. Most common for owner-operators.
- Manager-managed: named managers run it and other members stay passive. Common with investors, family companies and real estate.
- A manager can be a member or an outside person.
In a corporation
- Shareholders own the stock. They elect the board and vote on big decisions.
- Directors form the board. They set direction, approve major moves and appoint the officers.
- Officers run it day to day: the President leads, the Secretary keeps records and minutes, the Treasurer oversees money and taxes.
- In most states one person can hold every role.
For each person, our application asks for the full legal name, an address, the role or title, and the ownership percentage or shares.
Your name
How to pick your business name
The state rejects names that clash with a company already on its record, so have three choices ready, in order.
- Unique: different from every company already on the state's record.
- The right ending: LLC or L.L.C. for an LLC; Inc. or Corp. for a corporation. Each state keeps its own list.
- Restricted words like Bank, Trust, Insurance or University need extra approval.
- No look-alikes: nothing that sounds like a government agency.
- Check before you commit: the domain, the social handles, and a trademark search at USPTO.gov.
- Selling under a different name? That is a DBA, or assumed name, and it is a separate filing.
Your purpose
What is the purpose of your business?
Many states accept a general purpose, like "any lawful business." Banks, licensing offices and the IRS still want one plain sentence on what you actually do. Write it like these.
| You sell | Sample purpose line |
|---|---|
| Goods | Sells handmade candles and home goods online and at local markets. |
| Services | Provides residential cleaning services in the Chicago area. |
| Real estate | Owns, leases and manages residential rental property. |
Address and agent
Principal business address and registered agent
Two addresses go on your filing. One is where the business is run. The other is where official papers are served.
Principal business address
Where the business is run. It goes on your state filing, and it is the address your bank and licensing offices will need, along with the IRS and your annual report.
- Use a real street address. Most states and banks will not take a PO Box.
- It can be a home, an office, or a virtual office with a real suite number.
- Your mailing address can be different. Our application asks for both.
What is a registered agent?
The person or company named on the public record to receive official papers for your business. Every LLC and corporation needs one.
- Accepts lawsuits and court papers, delivered in person.
- Receives state mail: annual report reminders, tax letters and notices.
- Forwards it fast, so you never miss a deadline.
- Needs a street address in the state where you form, and in every state you register in, open during business hours.
- You can be your own agent with an in-state street address where you are every business day. Your name and that address go on the public record.
Lobi Registered Agent covers Illinois. Outside Illinois, a trusted Lobi partner serves as your agent. See registered agent service.
Another state
Forming in one state, working in another
Your company is formed in one state. If it does business in another state, it registers there too. That is called foreign qualification. "Foreign" just means out of state.
Doing business usually means an office, store or warehouse there, employees working there, property you own or rent there, or regular in-person work there. Each state sets its own test, and occasional online sales often do not count.
Registering takes a certificate of good standing from your home state, a foreign registration filing in the new state, a registered agent in that state, and annual reports and fees in both states.
Delaware, Wyoming or Nevada? Forming there but working from Illinois means you still register in Illinois: two sets of state fees, two annual reports and two registered agents. It can make sense for some holding companies and investor-backed startups. For most local businesses, form at home.
Skipping it costs more. States can charge penalties and back fees, and your company may not be able to bring a lawsuit in that state's courts until it registers.
IRS classification
How the IRS taxes your LLC or corporation
The state forms your company. The IRS decides how it is taxed. Every entity gets a default, and most can elect a different one.
| You form | IRS default | You can elect |
|---|---|---|
| Single-member LLC | Disregarded entity. Profit goes on the owner's personal return, usually Schedule C. | C corp (Form 8832) or S corp (Form 2553) |
| Multi-member LLC | Partnership. Files Form 1065. Each member gets a K-1 for their share. | C corp (Form 8832) or S corp (Form 2553) |
| Corporation | C corporation. Files Form 1120 at a 21% federal rate. Dividends are taxed again to owners. | S corp (Form 2553), if eligible |
An S corp is a tax choice, not a business type. Profit passes through to the owners, and owners who work in the business take a reasonable salary. The limits: up to 100 shareholders, US citizens or residents, one class of stock. File Form 2553 within 2 months and 15 days of the start of the tax year. More in our S corp election guide.
Your EIN is your company's federal tax ID. It is free from the IRS. Online applications need an SSN or ITIN for the owner in charge; without one, Form SS-4 goes by fax or mail.
FinCEN reports: since August 2026, companies formed in the US no longer file beneficial ownership reports with FinCEN. Foreign companies registered in the US still do, and some states have their own rules.
Taxes are personal. Talk to a CPA before you choose an election.
Foreign owners
No SSN? You can still own a US company
You do not need to be a US citizen or resident to form an LLC or corporation here. A few steps work differently.
- 01
Form the company
Same state filing as anyone else, with a registered agent and a US business address.
- 02
Get the EIN on Form SS-4
The online application needs an SSN or ITIN. Without one, Form SS-4 goes to the IRS by fax or mail.
- 03
Get an ITIN if you need one
Your personal tax ID when you cannot get an SSN. Apply on Form W-7, usually with a tax return. Our ITIN guide walks through it.
- 04
Open the bank account
Bring your passport. Many banks ask foreign owners to visit in person.
- No S corp: nonresident owners cannot hold S corp shares, so choose an LLC or a C corp.
- A yearly IRS filing: a single-member LLC with a foreign owner files Form 5472 with a pro forma Form 1120 every year, even with no income. Missing it is costly.
- FinCEN: a company formed in the US does not file a FinCEN ownership report, even with a foreign owner. A company formed abroad and registered here still does.
By business type
Selling goods, services or real estate
What you sell shapes your setup. Here is the common path for each.
| You sell | Common setup | Plan for |
|---|---|---|
| Goods: retail, online stores, wholesale, food | LLC, member-managed | Sales tax permits where you owe sales tax, a resale certificate for inventory, product liability insurance, local licenses and health permits for food |
| Services: consulting, trades, cleaning, creative | LLC, often with an S corp election once profit is steady | Trade or professional licenses (licensed professions may need a PLLC or PC), written client contracts, liability insurance. Most services skip sales tax, but some states tax certain services |
| Real estate holding company | LLC, often manager-managed. Rarely a corporation: taking property out of a C corp can trigger tax | One LLC per property, or a series LLC where the state allows it. Deed the property into the LLC (ask your lender first), insure it in the LLC's name, and collect rent in the LLC's bank account |
After you file
What you get back, and what comes due every year
What you get back
- Approved formation document from the state
- EIN confirmation letter from the IRS
- Registered agent confirmation
- Your Lobi portal login
Your yearly calendar
- Annual report: most states, every year or two
- State franchise tax, where your state has one
- Registered agent renewal
- Tax returns and local license renewals
Your documents are already in your Lobi portal. Your operating agreement template and basic company documents are ready to fill in. Your formation papers and EIN letter live there too, with compliance tracking so your due dates do not sneak up on you.
Miss an annual report and the state can add late fees, mark you not in good standing, and in time dissolve the company.
Banking
Opening your business bank account
Banks check who owns and controls the company. Come ready and it takes one visit.
- Approved formation document from the state
- EIN confirmation letter
- Operating agreement or bylaws (the template is in your Lobi portal)
- Government photo ID for every signer
- Details on anyone owning 25% or more, plus one person in control
- A company resolution naming who can sign, if the bank asks
- Match everything: the exact legal name and the same address as your state filing. Mismatches slow approval.
- Proof of address: have your lease or virtual office agreement ready.
Banks still collect ownership details under their own federal rules, even though FinCEN reporting ended for US companies.
Protection and privacy
Keep your liability protection, and your privacy
Your company keeps business debts off your personal assets. Courts can ignore that shield when owners treat the company like a personal wallet. Five habits keep it strong.
- 01
Separate bank account
Never pay personal bills from it.
- 02
Sign as the company
"Ana Lopez, Manager, Acme LLC," not just your name.
- 03
Keep your records
Operating agreement or bylaws, ownership records and written decisions.
- 04
Stay in good standing
File annual reports and keep a registered agent.
- 05
Fund it and insure it
Enough money and insurance to cover the business's own risks.
Why the operating agreement matters: even where your state does not require one, it sets who owns what, who decides, and what happens if someone leaves. It replaces your state's default rules, and banks ask for it. Our operating agreement template and basic company documents are ready in your Lobi portal. Negotiated deals, like buy-sell or partner agreements, go to our partner attorney.
Your public record: formation filings and annual reports are public. Using a registered agent and a business address keeps your home address off them. Many states also list managers or officers by name.
Checklist
Your application checklist
Have these ready and our application takes minutes.
- Entity type and state of formation
- Three name choices, in order
- Business purpose in one plain sentence
- What you sell: goods, services or real estate
- Principal business address, plus mailing address if different
- Registered agent: Lobi, or your own in-state street address
- Every person: legal name, address, role and ownership
- LLC: member-managed or manager-managed. Corporation: directors, officers and shares
- SSN or ITIN for the EIN. Never send it by email.
- Tax plan: IRS default or an election, after a CPA check
Ready to file?
We handle the state side. You keep building.
Our team prepares and files your formation in all 50 states, and your documents land in one portal.
- Lobi GuaranteeIf we file it wrong, we fix or amend it at our cost.
- Documents readyOperating agreement template and basic company documents in your Lobi portal.
- Registered agentLobi Registered Agent in Illinois, a trusted partner in every other state.