Key Takeaways
- Choose the right entity type for your business: primarily an LLC or Corporation
- Complete state filings and secure an EIN from the IRS
- File for required licenses and permits based on industry and location
- Set up internal documents and compliance systems
Introduction
Starting a business is exciting—but the legal setup can feel overwhelming. This step-by-step checklist will guide you through forming an LLC or a Corporation, helping you stay compliant from day one.
Step 1: Choose Your Business Structure
Select a structure that fits your ownership, liability, and tax needs.
- LLC: Flexible, protects personal assets, pass-through taxation
- C Corporation: Good for venture funding, separate tax entity
- S Corporation: Similar to C Corp but with pass-through tax benefits (with restrictions)
Step 2: Register Your Business Name
Ensure your business name is available and register it with your state. Consider trademark searches for future protection.
Step 3: File with the State
- LLC: File Articles of Organization
- Corporation: File Articles of Incorporation
Step 4: Obtain an EIN (Employer Identification Number)
Apply through the IRS online. This number is required for taxes, hiring employees, and opening a business bank account.
Step 5: Draft Operating Documents
- LLC: Operating Agreement
- Corporation: Corporate Bylaws, Shareholder Agreements
Pro Tip
Even if not legally required, having internal governance documents protects founders from future disputes.
Step 6: Register for Taxes
- Register for state and local taxes (sales, franchise, employment)
- Set up payroll tax accounts if hiring employees
- Consider electing S-Corp status for tax optimization (Form 2553)
Step 7: Obtain Licenses and Permits
Check your city, county, and state for required licenses by industry—health, retail, service-based, etc.
Step 8: Open a Business Bank Account
Keep business finances separate from personal accounts. Choose a bank familiar with startups.
Step 9: Set Up Accounting and Compliance Systems
- Use accounting software or hire a bookkeeper or controller
- Track expenses and income from the start
- Schedule annual compliance filings and reports
Final Thoughts
With the right legal foundation, your startup is positioned for long-term success. If you need support with filings or structuring your business correctly, our team is here to help.