To form a partnership LLC, you file Articles of Organization with the Secretary of State in your formation state, appoint a registered agent, put an operating agreement in place among the members, get a federal Employer Identification Number, and set up the LLC to file as a partnership for taxes. A multi-member LLC gives you the liability protection of a corporation with the pass-through taxation of a partnership. The steps below walk through what each stage requires and where the details vary by state.
Pick and Clear a Name
Your LLC’s name must include a legal designator: “Limited Liability Company,” “LLC,” or “L.L.C.” Some states also accept “LC” or “Limited Company.” Before you commit, search the business entity database on your state’s Secretary of State website. Most states will reject a filing if the proposed name is too close to one already registered.
Some words are restricted. Terms tied to banking, insurance, and trust services usually require written consent from a state regulator. Words like “university,” “college,” and “institute” face similar hurdles in several states. If you plan to operate under a name different from your legal LLC name, you may also need a “doing business as” (DBA) registration with your state or county.
File Articles of Organization With the State
The Articles of Organization is the document that legally creates your LLC. You file it with the Secretary of State (or equivalent office) in the state of formation. Forms vary, but most ask for the same information:
- The full LLC name with its designator.
- The principal office street address.
- The name and address of the registered agent.
- A business purpose; most states accept broad language such as “any lawful business activity.”
- Whether the LLC is member-managed or manager-managed.
- The name and signature of at least one organizer.
Filing fees run from $50 in states like Arizona, Colorado, and Mississippi up to $500 in Massachusetts. Online portals often process filings within a few business days; paper filings by mail take longer. Some states charge a small electronic convenience fee or offer paid expedited processing. Once approved, you receive a stamped copy of the Articles or a certificate confirming the LLC exists.
States That Require Publication
New York, Arizona, and Nebraska require newly formed LLCs to publish a notice of formation in one or more local newspapers. Costs depend on the county. In New York, publication can run from a few hundred dollars to more than $1,500 in certain counties, on top of the state filing fee. Arizona offers free online publication alternatives in some counties. Skipping publication where it’s required can cost you the authority to conduct business or trigger other administrative penalties.
Appoint a Registered Agent
Every LLC has to name a registered agent, the person or company authorized to accept lawsuit notices and government correspondence for the business. The agent’s name and address go on the Articles of Organization. Requirements are consistent across states:
- A physical street address in the formation state. A P.O. box does not qualify.
- Availability during standard business hours, generally Monday through Friday, 9 a.m. to 5 p.m.
- State residency for an individual agent, or authorization to operate in the state for a business entity acting as agent.
You can serve as your own registered agent or name another member, but the address becomes public record and you have to be available every business day. A commercial registered agent service puts its address on public filings instead of yours and handles document acceptance and compliance reminders, typically for $100 to $150 a year. If your LLC ever goes without an active agent, the state can revoke your good standing or administratively dissolve the company.
Write an Operating Agreement Among the Members
The operating agreement is the internal contract that governs how the members share profits and losses, make decisions, and handle departures. California, Delaware, Maine, Missouri, and New York legally require one. In other states it’s optional, but without it the state’s default rules control your business, and those defaults rarely match what the members actually want.
At a minimum, cover:
- Ownership percentages for each member, which set the default allocation of profits and losses.
- How profits and losses are distributed, whether by ownership percentage or another agreed arrangement.
- Voting rights and the percentage needed for major decisions such as admitting new members or taking on significant debt.
- Initial capital contributions and how future contributions will be handled.
- Whether the LLC is member-managed or manager-managed.
Member-Managed or Manager-Managed
In a member-managed LLC, every member can make decisions and sign contracts for the company. It fits situations where all partners are active in daily operations. In a manager-managed LLC, one or more managers (who may or may not be members) run day-to-day decisions while other members act as passive investors. You mark this choice on the Articles of Organization, and it controls who outsiders can rely on when dealing with the LLC.
Buy-Sell Provisions
Buy-sell terms spell out what happens when a member wants out, retires, becomes permanently disabled, dies, or files for bankruptcy. Without them, any of those events can force disputes or dissolution. The agreement should state how the departing member’s interest will be valued, whether by a predetermined formula, an independent appraisal, or book value, and how the buyout will be funded.
Fiduciary Duties
Members and managers owe fiduciary duties to the LLC and to each other. The duty of loyalty means a member cannot compete with the LLC, take business opportunities that belong to the company, or profit from company property at the expense of others. The duty of care means avoiding reckless or grossly negligent conduct in business decisions. Your operating agreement can adjust the scope of these duties within limits set by state law, but in most states it cannot eliminate them.
Get a Federal EIN
Once the state approves your LLC, apply to the IRS for an Employer Identification Number. This nine-digit number is what you use to file federal taxes, hire employees, and open a business bank account. The IRS online application issues the EIN immediately at no cost.1Internal Revenue Service. Get an Employer Identification Number You can also apply by mailing or faxing Form SS-4, which takes about four business days by fax or four weeks by mail.2Internal Revenue Service. Employer Identification Number
A multi-member LLC is automatically classified as a partnership for federal tax purposes unless you file Form 8832 to elect corporate treatment.3Internal Revenue Service. Limited Liability Company (LLC) On the EIN application, select “partnership” as the entity type.
Set Up Partnership Tax Filings
A partnership LLC does not pay income tax itself. It files an informational return, Form 1065, reporting total income, deductions, and credits. For LLCs on a calendar year, Form 1065 is due March 15.4Internal Revenue Service. Publication 509, Tax Calendars The LLC then issues each member a Schedule K-1 showing that member’s share of income and losses, which the member reports on their personal return.5Internal Revenue Service. About Form 1065, U.S. Return of Partnership Income You owe tax on your share of partnership income whether the LLC distributes cash to you or not.
Self-Employment Tax
Active LLC members owe self-employment tax on their share of net earnings. The combined rate is 15.3 percent: 12.4 percent for Social Security and 2.9 percent for Medicare.6Internal Revenue Service. Topic No. 554, Self-Employment Tax The Social Security portion applies only to earnings up to $184,500 in 2026; the Medicare portion has no cap.7Social Security Administration. Contribution and Benefit Base Higher earners may also owe an additional 0.9 percent Medicare surtax on earnings above $200,000 for single filers or $250,000 for married couples filing jointly.
Quarterly Estimated Payments
No one withholds tax from your LLC income, so each member makes quarterly estimated payments covering both income tax and self-employment tax. Use Form 1040-ES; payments are typically due in April, June, September, and January.8Internal Revenue Service. Self-Employed Individuals Tax Center Underpaying or missing a deadline triggers penalties and interest.
Electing Corporate or S Corporation Treatment
Partnership taxation is the default, but not the only option. A multi-member LLC can elect to be taxed as a C corporation by filing Form 8832, or as an S corporation by filing Form 2553.9Internal Revenue Service. LLC Filing as a Corporation or Partnership An S corporation election can reduce self-employment tax for members who pay themselves a reasonable salary, because only the salary, not the remaining profit distributions, is subject to payroll taxes. Weigh the trade-offs with a tax professional before filing.
Open a Business Bank Account and Get Local Licenses
Opening a dedicated business bank account is essential to preserving your liability protection. If you mix personal and business funds, a court may allow creditors to reach your personal assets by treating the LLC as an alter ego of its members, a doctrine known as “piercing the corporate veil.” Run all business income and expenses through the LLC’s account and keep personal transactions separate.
Depending on your industry and location, you may also need city, county, or state licenses or permits before you begin operating. Requirements vary widely, so check with your local government offices to identify what applies.
Stay Compliant Year to Year
Most states require LLCs to file an annual or biennial report with the Secretary of State confirming the company’s address, registered agent, and other key details. Fees range from $0 to several hundred dollars. Missing the deadline can cost you good standing or lead to administrative dissolution.
Keep your registered agent information current. If the agent’s address changes or you switch agents, file the update promptly. Letting the agent lapse means the state has no way to deliver legal notices, which can produce default judgments in lawsuits you never learn about.
Registering as a Foreign LLC
If your LLC does business in a state other than where it was formed, such as maintaining an office, having employees, or generating significant sales there, you’ll likely need to register as a “foreign LLC” in that state. Foreign registration usually involves an application, a fee, and a registered agent in the new state. Operating without registering can bring fines and prevent you from enforcing contracts in that state’s courts.
Beneficial Ownership Reporting
The Corporate Transparency Act originally required most new LLCs to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). An interim final rule published in March 2025 exempted all U.S.-created entities from that requirement.10FinCEN.gov. Beneficial Ownership Information Reporting As of 2026, domestic LLCs do not need to file a beneficial ownership report with FinCEN. This area has changed multiple times in a short period, so check FinCEN’s website for current guidance before you file.