LLC FAQ

A Limited Liability Company is a U.S. legal entity that sits between a sole proprietorship and a corporation. The big practical benefit is in the name: owners (called “members”) aren’t personally liable for the LLC’s debts or lawsuits, assuming you keep the LLC’s finances and paperwork actually separate from your own. LLCs also get “pass-through” tax treatment by default, meaning the business itself doesn’t pay federal income tax.

Anywhere from same-day (online filing in Arizona, Colorado, Wyoming) to two or three weeks in a slow mail-in state. Most states fall in the 3–10 business day range once you hit submit. Expedited processing — when the state offers it — typically costs an extra $25–$200.

The LLC itself doesn’t pay federal income tax. Instead, the profit (or loss) flows through to the members’ personal tax returns and is taxed at their individual rate. A single-member LLC is treated as a disregarded entity and reported on Schedule C. A multi-member LLC files a Form 1065 and issues K-1s. You can also elect to be taxed as an S-corp or C-corp if that makes sense for your business — that’s a tax election, not a change in legal structure.

Absolutely. Multi-member LLCs are one of the most common entity types for partnerships. The one thing we’d stress: put a proper operating agreement in place before any real money or effort starts flowing. Partnership disputes are the most predictable cause of small-business implosions, and the operating agreement is how you front-load those conversations.

Not legally, no — you can operate as a sole proprietor under your own name. The case for forming a single-member LLC is liability protection (creditors can’t come after your personal assets) and the professionalism of a real business name. If you’re doing anything where someone could credibly sue you — freelancing, consulting, handyman work, selling physical goods — the $49 + state fee is a cheap insurance premium.

Almost never, if you don’t live there. You’ll still have to register as a foreign LLC in your home state, pay that state’s fees on top of the Delaware/Wyoming ones, and hire a registered agent in the formation state. The supposed savings vanish. Form in the state where you actually live and work.

Yes. Form in your home state, and then register as a “foreign LLC” in every other state where you’re doing substantial business. “Doing business” generally means having a physical presence, employees, or ongoing customer relationships. Occasionally shipping a product to a state doesn’t count; having an office or staff there does.

Taxes look nearly identical (both pass-through), but legal liability is completely different. A sole proprietorship is legally the same as you — if the business gets sued, your personal bank account is on the hook. A single-member LLC is a separate legal entity, so creditors can generally only reach the LLC’s assets, not yours.

Every state has a formal dissolution process: file Articles of Dissolution, settle outstanding debts and tax obligations, distribute remaining assets, and cancel any business licenses. Skipping dissolution and just “letting it lapse” causes problems — you’ll keep getting annual-report bills and eventually penalties. Our state guides walk through the dissolution steps for every state.

Yes, but the mechanics depend on whether you’re transferring membership interest (ownership) or management authority. For single-member LLCs, you typically sell the membership interest via a purchase agreement and file an amendment with the state. For multi-member LLCs, the operating agreement should lay out transfer rules and typically requires the other members’ consent.

A DBA (“doing business as”) lets you operate under a different name than your legal LLC name. If your LLC is “Riverstone Ventures LLC” but you want to sell under “Riverstone Coffee Roasters,” you’d file a DBA for the trade name. It’s a separate filing — typically $25–$75 at the county or state level.

Maybe. “Business license” means different things in different places — some cities require a general license for any business, some states license specific industries (contractors, food service, cosmetology), and some professions require state regulatory boards. Your LLC filing and your business license are separate things. Check with your city and county first.

Our fee is $49, flat. Your state’s filing fee is separate and clearly disclosed — we don’t mark it up, because that’s money going to your state. So if you’re filing in Texas ($300 state fee), the total is $349. If you’re filing in Colorado ($50 state fee), the total is $99. No tiers, no rush-processing upsells, no registered-agent subscription.

You get a stamped Certificate of Formation (or Articles of Organization — the name varies) from the state, we email you the PDF, and we walk you through getting your free EIN from the IRS and opening a business bank account. From there you’re a real business. The only recurring thing is your state’s annual report, which we’ll email you a reminder about.

Yes — every state guide has its own FAQ section that covers the quirks of that state (California’s $800 franchise tax, New York’s publication requirement, Tennessee’s excise tax, etc.). Use the state picker at the top of this page to jump to your state’s FAQ.