How to Register an LLC in the United States: A Complete IRS-Aligned Guide for Entrepreneurs

Starting a business in the United States involves selecting the right legal structure. For many entrepreneurs, the Limited Liability Company (LLC) is the preferred option. It provides flexibility, protects owners from liability, and offers easier taxation compared to corporations. LLCs are governed by state law rather than federal law. However, the Internal Revenue Service (IRS) plays a critical role in how LLCs are taxed, how they report income, and what federal requirements they must fulfill after formation.

This guide offers a step-by-step process for forming an LLC in the U.S., following IRS principles and state procedures. It includes information on naming rules, registration requirements, Employer Identification Numbers (EIN), tax classification choices, compliance obligations, and the long-term responsibilities of LLC owners.

1. What Is an LLC? (IRS Definition and Purpose)

The IRS defines an LLC as a business entity created under state law that offers liability protection for owners, called “members.” Unlike corporations, LLCs are not automatically recognized as federal tax entities.
Instead, the IRS classifies LLCs as:

• Disregarded entity (single-member LLC)
• Partnership (multi-member LLC)
• Corporation (if the LLC chooses corporate taxation)

IRS reference:
Limited Liability Company (LLC) – IRS

2. Advantages of Forming an LLC

Entrepreneurs choose LLCs for several reasons:

• Liability protection
• Flexible taxation
• Simplified structure
• Eligibility across industries

IRS business structures overview:
Business Structures – IRS

3. Step 1: Choose a Name for Your LLC

Every state requires your LLC name to be unique and properly formatted. Check availability with your state’s Secretary of State.

Directory of state business registration portals:
State Governments – USA.gov

4. Step 2: Choose a Registered Agent

A registered agent receives tax notices and legal documents.

IRS information on official notices:
Understanding IRS Notices & Letters

5. Step 3: File the Articles of Organization

This document legally forms your LLC and is filed with your state.

General federal guidance on business registration:
Register Your Business – SBA

6. Step 4: Create an Operating Agreement

Although not always required, it is essential for defining:

• Ownership
• Responsibilities
• Profit distribution
• Management rules

IRS recordkeeping guidance:
Recordkeeping for Small Businesses – IRS

7. Step 5: Apply for an Employer Identification Number (EIN)

Most LLCs must obtain an EIN, especially if hiring or opening a business bank account.

Apply online for free:
Apply for an EIN – IRS

Do you need an EIN?
EIN Requirements – IRS

8. Federal Tax Responsibilities of an LLC

Single-member LLC

Files income on the owner’s personal tax return.
Schedule C (Form 1040) – IRS

Multi-member LLC

Must file a partnership return.
Form 1065 – IRS
Issues K-1s:
Schedule K-1 (Form 1065) – IRS

Electing corporate taxation

C-Corp election:
Form 8832 – IRS
S-Corp election:
Form 2553 – IRS

9. Self-Employment Taxes

LLC members in pass-through structures must pay:

• Social Security tax
• Medicare tax

IRS guide on self-employment taxes:
Self-Employment Tax – IRS

10. State Tax Responsibilities

Depending on your state, required taxes may include:

• Franchise tax
• Gross receipts tax
• Annual report fees
• Sales tax obligations

State tax directory:
State Tax Agencies: Federation of Tax Administrators

11. LLC Compliance After Registration

To stay compliant, LLCs must:

• File annual reports
• Maintain a registered agent
• Keep tax and financial records

IRS recordkeeping guidance:
Recordkeeping – IRS

12. Opening a Business Bank Account

To maintain legal separation, banks often require:

• EIN
• Articles of Organization
• Operating Agreement

This supports IRS-compliant recordkeeping.

13. Accounting and Bookkeeping Obligations

Businesses must maintain complete financial records.

IRS guidance:
Recordkeeping for Businesses – IRS

14. Hiring Employees as an LLC

If you hire employees, you must:

• Verify eligibility (Form I-9 – USCIS)
• Withhold payroll taxes
• File employment tax forms:
• Form 941 – IRS
• Form 940 – IRS

Employment tax overview:
Employment Taxes – IRS

15. LLC Tax Elections for Better Savings

LLCs may elect S-Corporation status to reduce self-employment taxes.

IRS S-Corp guidance:
S Corporations – IRS

16. Licensing and Permits

Some industries require federal licensing.

Federal permit guidance:
Apply for Licenses & Permits – SBA

17. Digital Compliance: Websites, Advertising, and Online Sales

State sales tax may apply based on “economic nexus.”

State sales tax directory:
Sales Tax Agencies – TaxAdmin.org

18. When to Restructure Your LLC

Consider restructuring if you plan to:

• Seek investment
• Issue stock
• Scale rapidly

IRS guidance on business types:
Incorporated & Unincorporated Businesses – IRS

19. Common IRS Forms for LLC Owners

Important forms:

• Schedule C (Form 1040)
• Form 1065
• Schedule K-1
• Form 8832
• Form 2553
• Employment Tax Forms

20. Final Thoughts

Registering an LLC provides legal protection, tax benefits, and operational flexibility. By following state rules and IRS guidelines, entrepreneurs ensure a strong, compliant foundation for long-term success. Understanding this process empowers new business owners to confidently launch and grow their companies.