Business Formation
Anyone starting a contracting business who has not yet registered a legal entity.
Do this first
Choose your business name, check availability on your state Secretary of State website, and file your LLC. Then get a free EIN from the IRS. Total cost: $50–$300 depending on your state.
- 1.Choose a business name — search your state SOS website to confirm it is available
- 2.Decide on entity type: LLC (most common for contractors), sole proprietorship, or S-corp
- 3.File Articles of Organization with your state Secretary of State (online in most states, $50–$300)
- 4.Designate a registered agent (can be yourself if you have a physical address in the state)
- 5.Apply for a free EIN at irs.gov/ein — takes 5 minutes online, instant confirmation
- 6.Draft a simple operating agreement (required in some states, recommended in all)
- 7.Register for state tax accounts: sales tax, withholding tax, and/or franchise tax as required
- 8.Check if your city or county requires a separate business license or registration
- 9.Order a business checking account using your LLC docs and EIN letter
- 10.File your initial annual report if your state requires one (some charge $0, some $50–$150)
Cheapest path
File directly on your state Secretary of State website. Most states have online filing with instant confirmation. The IRS EIN application is free. Skip paid formation services like LegalZoom or ZenBusiness unless you need help with multi-member LLCs or operating agreements.
Tools to compare
Not endorsements or paid placements. Compare these and other providers.
Cheapest path. Most states charge $50–$150. The SOS website walks you through it.
When to use: You are a solo owner, your state has easy online filing, and you can follow instructions.
Guided process, registered agent service, compliance reminders. $100–$300 total.
When to use: You want someone to handle paperwork, reminders, and registered agent service.
Custom operating agreements, partnership structures, S-corp elections, multi-state filing.
When to use: You have a partner, complex ownership, or need specific liability structures.
Educational guidance only. Filing fees and cost ranges are approximate examples that vary by state — verify current figures with your state authority. This is not legal or tax advice. Consult a business attorney or CPA for your specific situation.