How LLC formation actually works, the five documents every formation produces, which state to pick, the $800 California nexus trap, LLC versus corporation, and the ongoing cost of ownership - end to end in 5-10 days.
The short answer: An LLC combines a corporation's liability shield with pass-through taxation. Forming one takes five documents - Articles of Organization, an operating agreement, an EIN, a registered agent, and a BOI report where the CTA applies - and 5-10 days.
Pick your situation to jump to the state choice, nexus, or entity-type analysis.
An LLC is a US business structure that gives owners a corporation's liability shield with pass-through taxation. It is a separate legal person under state law, but its income flows to the owners' personal returns by default.
Each state has its own LLC statute (Wyoming's at Wyo. Stat. § 17-29, Delaware's at 6 Del. C. § 18; the IRS sets federal treatment in Publication 3402). A single-member LLC is a disregarded entity; a multi-member LLC is a partnership filing Form 1065. Either can elect corporate treatment via Form 8832 (C-corp) or Form 2553 (S-corp).
| Structure | Liability shield | Default taxation | Formation cost | Best for |
|---|---|---|---|---|
| Sole proprietorship | No | Pass-through (Schedule C) | $0 | Solo, low-risk |
| LLC | Yes | Pass-through (disregarded / 1065) | $50-$110 state | Most small businesses |
| S-corporation | Yes | Pass-through + payroll | $50-$110 + election | Profit over $40,000 |
| C-corporation | Yes | 21% entity-level | $90-$110 | Venture-backed startups |
Source: state filing schedules and IRS Publication 3402, verified July 2026.
Forming an LLC takes five steps: check name availability, file Articles of Organization with the state ($50-$110), get an EIN from the IRS, sign an operating agreement, and open a business bank account. End to end: 5-10 days.
| Step | Who does it | Timeline | Output |
|---|---|---|---|
| Name availability check | Formation service | Day 0 | Cleared, distinguishable name |
| File Articles of Organization | Secretary of State | Day 0-1 (1-3 days) | State-recognized LLC |
| Get EIN (Form SS-4) | IRS | Day 1 US / 5-7 non-resident | Federal tax ID (CP575) |
| Sign operating agreement | Members | Day 2-3 | Governance contract |
| Open business bank account | Bank | Day 5-10 | Funded account |
Source: Anonymousllc.co formation workflow and state acceptance times, verified July 2026.
Anonymousllc.co runs the name check, files the Articles, pays the state fee, files the EIN (online for US residents, by fax with a third-party designee for non-residents), delivers the operating agreement, and submits to 4-5 banks in parallel - raising the approval rate to about 90%.
What to do in the first 30 days after formation:
Every clean LLC formation produces five documents: Articles of Organization (filed with the state), an operating agreement (internal), an EIN from the IRS, a registered agent appointment, and a BOI report where the CTA applies.
| Document | Filed with | Required? | Cost |
|---|---|---|---|
| Articles of Organization | Secretary of State | Yes - creates the LLC | $50-$110 state fee |
| Operating agreement | Internal (never filed) | Practically - banks and courts | Template included / $199 custom |
| EIN | IRS (Form SS-4) | Yes - banking and tax | $0 IRS / $99 service |
| Registered agent | Named in the Articles | Yes - every state | $100/year |
| BOI report | FinCEN | If the CTA applies | $150 |
Source: state LLC acts, IRS Form SS-4 instructions, and FinCEN, verified July 2026.
Form in Wyoming for about 70% of buyers ($397 all-in, anonymous, $60/yr), New Mexico for the lowest cost ($347, no annual report), Delaware to raise US investment ($407), or your home state if nexus requires it.
| State | Filing fee | Annual cost | State income tax | All-in | 5-year total |
|---|---|---|---|---|---|
| Wyoming | $100 | $60 report | 0% | $397 | $1,037 |
| New Mexico | $50 | $0 | 0% | $347 | $747 |
| Delaware | $110 | $300 franchise | 0% (non-DE) | $407 | $2,007 |
| Nevada | $75 | $450 (license + list) | 0% | $722 | $2,622 |
| California | $70 | $800 franchise | up to 13.3% | - | $4,520 |
Source: state fee schedules and anonymousllc.co pricing, verified July 2026. Five-year total = formation + 4 years of agent and reports/franchise.
The choice runs on four variables: where you operate (nexus), whether you need anonymity (only WY, NM, DE, NV), whether you will raise US investment (Delaware), and how much charging-order case law you need (Wyoming and Nevada lead single-member protection). Anonymousllc.co prices the same end-state as $397 all-in (Wyoming-fulfilled) or the state-specific breakout above.
No. State tax follows where you operate, not where you form. A Wyoming LLC operating from California must foreign-qualify and pay California's $800 annual franchise tax under Cal. R&TC § 17941, regardless of formation state.
California's "doing business" test (Cal. R&TC § 23101) is broad: an LLC owes the $800 tax if it has California sales over $711,538, California property over $71,154, or California compensation over $71,154. Fail to foreign-qualify and California assesses the $800 retroactively, adds penalties up to 25% plus interest, and suspends the LLC's right to enforce contracts in California courts under Cal. Corp. Code § 17708.07.
| Activity | Triggers foreign qualification? | Authority |
|---|---|---|
| Physical office or warehouse in a state | Yes | RULLCA § 803 |
| Employee working in a state | Yes | State nexus rules |
| Own real property in a state | Yes | State LLC act |
| California sales over $711,538 | Yes ($800 tax) | Cal. R&TC § 23101 |
| Bank account only | No | RULLCA § 803(a) |
| Online sales, orders accepted out-of-state | No | RULLCA § 803(a) |
| Maintaining or defending a lawsuit | No | RULLCA § 803(a) |
Source: Revised Uniform LLC Act § 803 and Cal. R&TC §§ 17941, 23101, verified July 2026.
Form an LLC for solo operators, real estate, and holding companies - tax-simple and flexible. Form a Delaware C-corp to raise venture capital, issue ISOs, or claim the $10 million Section 1202 QSBS exclusion.
| Factor | LLC (default) | S-corp | C-corp |
|---|---|---|---|
| Taxation | Pass-through | Pass-through + payroll | 21% entity-level |
| Equity | Membership units | Stock (100 holders) | Stock (unlimited) |
| ISOs (IRC § 422) | No | Yes | Yes |
| VC fundraising | Awkward | No | Standard (Delaware) |
| Section 1202 QSBS | No | No | Yes ($10M exclusion) |
| Best for | Solo, real estate, holding | Profit over $40,000 | Venture-backed startups |
Source: IRC § 422, § 1202, § 1361, and the TCJA 21% rate, verified July 2026.
US venture-capital firms invest almost exclusively in Delaware C-corporations - SAFEs and preferred stock are built around corporate shares, not membership units. Incentive stock options under IRC § 422 and the Section 1202 QSBS exclusion (up to $10 million of gain, domestic C-corp stock only) also require a corporation. Converting an LLC to a C-corp at fundraising costs $5,000-$15,000 in legal fees, so venture-track founders start as a C-corp. For everyone else, the LLC wins on tax simplicity, operating-agreement flexibility, lower cost, and - in four states - anonymity. LLCs were over 70% of new US entity formations in 2024.
An LLC's recurring cost runs $100-$450 a year: Wyoming $160 ($60 report + $100 agent), New Mexico $100, Delaware $400 ($300 franchise + $100), Nevada $450. Over five years, Wyoming totals $1,037.
| State | Annual report / franchise | Registered agent | Total per year | 5-year total |
|---|---|---|---|---|
| Wyoming | $60 report | $100 | $160 | $1,037 |
| New Mexico | $0 (none) | $100 | $100 | $747 |
| Delaware | $300 franchise (June 1) | $100 | $400 | $2,007 |
| Nevada | $450 (license + Annual List) | $100 | $450+ | $2,622 |
Source: state fee schedules, verified July 2026.
Two structural notes. Multi-member LLCs file Form 1065 with K-1s and need a customized operating agreement addressing capital accounts, allocations under IRC § 704(b), and buy-sell provisions. Non-resident owners file Form 5472 annually with a pro-forma Form 1120 under IRC § 6038A - the penalty for missing it is $25,000. Neither changes the formation mechanics.
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