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Start an LLC FREE*

Register your LLC for free with a Rocket Legal+ membership

Start an LLC
Protect your personal assets and gain credibility with a limited liability company.

Start Up Confidently with a new LLC

Get fast, personalized support to start your LLC

FREE* with Rocket Legal+

Get your first business registration FREE* as a Rocket Legal+ member and stay compliant with HALF OFF services *See details

Simple and fast protection

We'll take care of your LLC filing so you can focus on your business

File with confidence

Join the 3+ million businesses that have trusted Rocket Lawyer to help them Start Up Confidently

Choose a business structure

Compare the advantages and disadvantages of each entity type to find the one that's best for your business.





Sole proprietorship

Managing your business

Limited liability

Incorporation can protect business owners and shareholders from personal financial responsibility for business debts or liability.

Members are protected

Shareholders are protected

Shareholders are protected

Directors are protected

Sole proprietors are not protected

Management flexibility

Some entities are more rigid than others when it comes to structure.

Variety of management structures

Defined by state and federal law

Defined by state and federal law

Strict management laws

No management structure

Favorable for financing

Depending on your goals, certain entity types may be more suitable.

Gains credibility when applying for loans and grants

Can distribute one class of stock to up to 100 people

Can issue multiple classes of stock to unlimited shareholders

Gains credibility when applying for loans and grants

Often more difficult to get loans and cannot issue stock


Compliance requirements vary by state and entity type

Easy to maintain and often most affordable

Payroll requirements may create operational overhead

Requires more complex accounting and potentially more reporting and fees

Typically the most demanding due to tax-exempt status

No requirements or fees

Unlimited lifetime

Succession planning may be important to you. If so, you'll need a business structure that enables a smooth transition.

With the proper planning, LLCs can exist for generations

Existence is not tied to specific shareholders

Existence is not tied to specific shareholders

Existence is not tied to specific directors

No longer exists when the owner quits or passes away

Tax considerations

Tax treatment

Your choice of entity can impact your tax rate and filing options.

Pass-through taxes: Most often, LLC members are taxed on their personal tax returns

Pass-through taxes: S-corp shareholders are taxed on their personal tax returns

Double taxation: C-corp income is taxed at the corporate level first, then again at the personal level

Nonprofits can apply for tax-exempt status and donations are tax-deductible

Sole proprietorships are taxed only on their owner's tax return.

Registration fees

State filing fees are required for all legal entities. As a Rocket Lawyer member, you only pay state fees.

Fees are tax-deductible

Fees are tax-deductible

Fees are tax-deductible

Fees are tax-deductible

No fees

Limited Liability Company FAQs

  • How much can businesses save with Rocket Legal+?

    Businesses can save up to $2,500 per year with a Rocket Legal+™ membership. This calculation is based on total savings on an initial business registration and registered agent, trademark, and business tax filing services for Rocket Legal+ members (a total cost of $924.97) compared to Rocket Legal members (a total cost of $1,949.96). This is in addition to savings on the average cost of 5 hours for document preparation by a non-Rocket Lawyer network attorney at the average attorney hourly rate in the U.S. of $300 (an estimated cost of $1,500 when purchased without any form of Rocket Lawyer membership) compared to unlimited use of customizable business documents for both Rocket Legal+ and Rocket Legal members at no extra cost.

  • What is an LLC?

    An LLC, or limited liability company, is a relatively new type of business organization. The first LLC law was passed in 1977. Since then, every state has enacted legislation allowing the formation of LLCs.

    LLCs share a significant characteristic with corporations: limited liability. In a corporation, the corporate officers, directors, and shareholders cannot be held liable for any debts of the corporation unless they are liable under other laws. This is true only if management takes care to preserve the corporate formalities, such as maintaining separate bank accounts, holding regular meetings, making minutes of those meetings, and generally treating the corporation as a distinct entity under the law. If management fails to take the steps, then the law allows the "piercing of the corporate veil" which can subject officers, directors, and shareholders to individual liability. An LLC has the same protections from liability as the corporation—and the same vulnerability if not treated as a separate entity.

    LLCs also share a significant characteristic with partnerships, or, if the LLC is owned by a single member, with individual taxpayers. Income to an LLC is not taxed at the entity level. Instead, it is included in the income tax returns of the members or single individuals who own the LLC.

  • What are Articles of Organization for an LLC?

    To form an LLC, you must file a document with the state in which the LLC is to be created. This document is usually called the Articles of Organization, but sometimes it is called something else, depending upon the state. The Articles of Organization state the name of the LLC, its business address, and the types of business the LLC will engage in.

    The Articles of Organization also state the name and address of the registered agent for the LLC. The registered agent is the person or company designated to receive lawsuits, and  serves as the contact point between the state and the LLC. The registered agent also receives official correspondence from other businesses.

  • How long does it take to register an LLC?

    How long it takes to register an LLC depends upon the state in which it is organized. In the past, organizers would mail Articles of Organization to the state, along with the required filing fee. 

    Later, some states began authorizing fax filing. Today, most states have set up e-filing systems that allow filing of various documents, usually including Articles of Organization for an LLC.

    In short, it can take days to weeks to register an LLC, and the timing will depend on the state in which you file.

  • How much does it cost to register an LLC?

    The cost of registering an LLC can vary depending on what your business requires. From legal advice to filing fees to hiring a registered agent, it’s all about what you need. State filing fees vary greatly, from $40 to as high as $500. Your state of registration might also charge an annual fee to keep your LLC current.

    The business services team at Rocket Lawyer can help you navigate the processes and systems to ensure you meet all the legal requirements in order to file quickly and correctly. Rocket Legal+ members get their first business registration filing for free, paying only the state filing fees, and also get access to professional services for up to half off, including registered agent services, tax prep and filing, trademark registration, and more.

    If your business does not have a physical address in your state (P.O. boxes are not acceptable substitutions), you may be required to have a registered agent. Registered agents accept official and legal correspondence on behalf of your business. While you’re setting up your LLC, why not set up Rocket Lawyer as your registered agent at the same time? Better yet, if you have a Rocket Legal+ membership, you can save on your business registration and your registered agent services with the membership that pays for itself.

  • What are the benefits of registering a single-member LLC?

    There are benefits to starting your own LLC, even if you work alone. The main benefit is liability protection. Depending on how you file, there may or may not be tax advantages.

    Limited Liability: Starting an LLC can help protect your personal assets. If your business fails or if you are sued, your business is sued and not you personally. In most cases, unless you assign personal assets as collateral, your personal assets may be protected if your business declares bankruptcy or is on the losing side of a lawsuit.

    Federal Taxes: You can file taxes as a "disregarded entity" or as a corporation. If you file as a "disregarded entity," then you are liable for pass-through taxes. This means you file your business income with your personal taxes and you will have to pay self-employment taxes. If you file as a corporation, your business files as a business separate from your personal taxes. You'll benefit from discussing with your accountant what option may be best for you.

  • Are the requirements to start an LLC different in each state?

Popular business entities

Explore more entities to find the best fit for your business.

Start an S-corp

Structure your business for generations of success. An S corporation can provide tax benefits and more.

Get started

Start a C-corp

Set your business up for scale. Great for venture capital, a C corporation allows for multiple classes of stock.

Get started

Start a nonprofit

Make your organization official. Let us help you start your nonprofit on the right path.

Get started

Questions? We’re here to help

Our business specialists have helped incorporate thousands of businesses like yours. We'll walk you through the entire process step by step and answer any questions you might have.

customer care specialist Justina