Starting a business in the United States takes about ten steps, and most of them are easier than people expect. This guide walks through every one in order — what it is, what it costs, how long it takes and where founders usually go wrong — whether you live in Texas or Tashkent.
- Test the idea before you spend money
- Choose a business structure
- Pick the state to register in
- Choose and check your business name
- Appoint a registered agent
- Register the company with the state
- Get your EIN (federal tax ID)
- Open a US business bank account
- Licences, permits and sales tax
- Stay compliant in year one and beyond
- Extra steps if you live outside the US
- What it all costs
1. Test the idea before you spend money
Registration is cheap; a business nobody wants is expensive. Before you file anything, spend a week answering three questions honestly:
- Who pays, and for what? Write one sentence: "[Customer] pays me for [result] because [reason]." If you cannot fill the blanks, you have a hobby, not a business yet.
- Can you sell one before you build ten? Pre-orders, a waiting list, a paid pilot for a friend's company — any of these prove demand better than a business plan.
- What does month one cost? List every expense you will have before the first sale. Most founders can start for under $1,000 if they keep the first version small.
You do not need a 40-page business plan to register a company. You do need a clear answer to "who is the customer" — everything below is easier once you have it.
2. Choose a business structure
Your structure decides who is liable if something goes wrong, how you are taxed, and how much paperwork you carry. The four common choices:
Sole proprietorship
You simply start trading under your own name. No registration, no cost — and no protection: if the business is sued or cannot pay a debt, your house and savings are on the line. Fine for a weekend side income; not fine once you have customers, contracts or stock.
LLC (Limited Liability Company)
The default choice for most small businesses in the US. An LLC is a separate legal person, so your personal assets are shielded from business debts and lawsuits. Taxes stay simple: profits "pass through" to your personal return, with no corporate tax at the company level. Paperwork is light — one filing to create it, a short annual report in most states. If you are unsure, an LLC is almost always the right first step. See how to form an LLC.
S-Corporation
Not a separate entity but a tax election that an LLC or corporation can make with the IRS. Once your profit passes roughly $60,000–$80,000 a year, paying yourself a salary plus distributions can save several thousand dollars in self-employment tax. Only US residents and citizens can own an S-Corp. Read our S-Corp guide.
C-Corporation
The structure investors expect. It can issue shares, grant stock options and raise venture capital, but it pays corporate tax and then owners pay tax again on dividends. Choose it if you plan to raise outside investment; otherwise an LLC is simpler and cheaper. See forming a C-Corp or compare LLC vs S-Corp vs C-Corp side by side.
3. Pick the state to register in
You can register in any state, but there is a simple rule: if you have a physical presence — an office, shop, warehouse, employees — register in that state. Registering elsewhere does not avoid your home state's taxes; it just means you register twice (once as a "foreign" LLC at home) and pay two sets of fees.
If your business is online or you live outside the US, the choice is open, and four states dominate:
- Wyoming — lowest ongoing cost, no state income tax, owner names not published. The usual pick for non-US founders and e-commerce.
- Delaware — the state investors and lawyers know best, with a specialist business court. Costs more each year; worth it if you plan to raise capital.
- Florida and Texas — no state income tax, large markets, sensible fees. Natural choices if you or your customers are there.
Each state page above lists the exact filing fee, approval time and annual requirements, checked against the state's own website.
4. Choose and check your business name
Three rules apply in every state. The name must be distinguishable from every company already on that state's register; it must include the right designator ("LLC", "Inc." and so on); and it must not use restricted words such as "bank", "insurance" or "university" without approval.
Before you fall in love with a name, check three things in this order:
- State availability — use our free business name search; we check the state register for you.
- Domain and social handles — a name you cannot get the .com for will cost you customers every week.
- Trademarks — a quick search of the USPTO database avoids a cease-and-desist letter later. Our trademark name search does this for you.
Stuck for ideas? The business name generator produces available-sounding names from a few keywords.
5. Appoint a registered agent
Every LLC and corporation must name a registered agent: a person or company with a physical street address in the state of registration, available during business hours, who receives lawsuits and official state mail on the company's behalf.
You can be your own agent if you live in the state and do not mind your home address on the public record and being served legal papers in front of customers. Most owners — and every founder abroad — use a professional service instead. Incofile's registered agent service is included free for the first year with every formation package.
6. Register the company with the state
This is the step that legally creates your business. You file a short document — called Articles of Organization for an LLC or Articles of Incorporation for a corporation (some states say "Certificate of Formation") — with the Secretary of State, and pay the state's filing fee. The form asks for:
- Company name and principal address
- Registered agent name and address
- Whether the LLC is member-managed or manager-managed
- The organiser's name and signature (this can be your formation service)
Approval takes anywhere from minutes (Wyoming, online) to a few weeks (states with paper queues), and most states sell an expedited option. When it comes back approved, you are officially in business. Incofile prepares and submits this filing for you, checks it by hand first, and puts the stamped documents in your dashboard — here is how the process works.
Do not skip the operating agreement. It is not filed with the state, but it is the document that says who owns what, how decisions are made and what happens if a partner leaves. Banks ask for it, and without one your state's default rules apply — which may not be what you would have chosen.
7. Get your EIN (federal tax ID)
An Employer Identification Number is the nine-digit number the IRS uses to identify your business, the way a Social Security number identifies a person. You need it to open a bank account, hire staff, file taxes and work with most payment processors and marketplaces.
If you have a Social Security number, you can apply online at the IRS website and receive the EIN immediately; the IRS never charges for it. If you do not have an SSN — typical for founders abroad — the online form will not work. You apply by fax or mail using Form SS-4 with a responsible-party declaration, and it takes anywhere from one to eight weeks. Incofile's EIN service handles either route, and for founders who need a personal US tax number as well we also handle ITIN applications.
8. Open a US business bank account
Keep business and personal money separate from day one — mixing them is the fastest way to lose the liability protection you just paid for. To open an account you will typically need:
- Approved Articles of Organization (stamped by the state)
- Your EIN confirmation letter (CP 575)
- Operating agreement
- Government ID for each owner with 25%+ ownership
- A US business address — a virtual mailbox works for most online banks
Traditional banks usually want you in the branch. Online business banks and fintech accounts (Mercury, Relay, Wise Business and similar) can open accounts remotely, including for many non-resident owners, provided the paperwork above is in order. Get the paperwork right first; the bank is the easy part.
9. Licences, permits and sales tax
Registering the company is not the same as having permission to operate. Three layers can apply:
- Local business licence — most cities and counties require a basic licence or "business tax receipt", usually $25–$150 a year.
- Professional or industry licences — contractors, food, childcare, cosmetology, real estate, healthcare, alcohol, transport and finance are all regulated at state level.
- Sales tax permit — if you sell taxable goods or services, register with the state Department of Revenue before your first sale. It is free, and selling without it is a penalty waiting to happen. Online sellers may need permits in several states once they pass each state's sales threshold.
Not sure what applies to you? Our business licence research service lists every licence your specific business and location needs.
10. Stay compliant in year one and beyond
The company is formed; now keep it alive. Missing one of these is the most common way a healthy small business gets administratively dissolved by its own state:
- Annual (or biennial) report — a short filing plus a fee to confirm your details. Deadlines and fees vary widely: Florida is 1 May with a $400 late fee; Georgia is 1 April; Wyoming is your anniversary month. Our annual report service files it for you.
- Franchise or privilege tax — Delaware ($300 flat), Texas (usually $0 but a report is still required), California ($800 minimum) and a few others charge this regardless of profit.
- Registered agent — must be continuously maintained. If your agent resigns and you do not replace them, the state can dissolve the company.
- Federal taxes — a single-member LLC reports on Schedule C of the owner's 1040; a multi-member LLC files Form 1065; corporations file Form 1120. Foreign-owned single-member LLCs must also file Form 5472 every year, with a $25,000 penalty for missing it.
- Beneficial ownership — reporting rules for company owners have changed several times since 2024; check the current requirement for your situation when you form, and again each January.
Every Incofile client gets these deadlines tracked in their dashboard with email reminders, whichever package they chose.
11. Extra steps if you live outside the US
Around a third of Incofile's clients are outside the United States. The process is the same, with four differences:
- Choose a state that suits remote owners — Wyoming and Delaware are built for it; Florida and Texas also work well. Avoid states that require an in-state address for the company itself.
- You cannot be your own registered agent — you need one with a physical address in the state.
- EIN takes longer — without an SSN you apply by fax or mail (see step 7). Start this the day the company is approved.
- You will need a US address and phone for the bank, payment processors and marketplaces. A virtual mailbox covers the address; a VoIP number covers the phone.
Two things non-residents should not do: elect S-Corp status (not allowed for non-resident owners), and assume a US LLC removes your tax obligations at home. The LLC is taxed in the US only on US-connected income, but your own country will usually still tax you on what you take out. Speak to an accountant who knows both systems.
12. What it all costs
Put together, a realistic budget for a properly set-up US LLC in its first year looks like this:
- State filing fee — roughly $50 to $500 depending on the state; the exact figure is on each state page.
- Formation service — a one-time fee if you use one. Incofile's packages are on the pricing page; Gold includes the EIN, operating agreement and first-year registered agent.
- Registered agent — free in year one with Incofile, then a flat annual fee.
- Annual report / franchise tax — $0 to $800 a year depending on the state.
- Licences and sales-tax registration — usually $0 to $150.
- Optional — virtual mailbox, accounting software, a domain and a simple website.
Most founders spend between $300 and $1,000 to get everything above done properly in year one, and a few hundred dollars a year after that. Compared with the cost of one lawsuit reaching your personal savings, or one missed filing dissolving the company, it is the cheapest insurance a business can buy.
Ready to start?
Pick your state, choose a package and answer a ten-minute questionnaire. We check the name, prepare and file the paperwork, obtain your EIN and put every document and deadline in one dashboard. Start your business with Incofile, or ask us a question first — a real person answers.
This guide is general information, not legal or tax advice. Incofile is not a law firm. Fees and rules change; state pages are updated when they do.