Corporate Requirements & Compliance for the US LLC

The rules governing the Limited Liability Company are largely identical, or at least very similar, in every US state. But as always, the devil is in the details.

In this section we walk through the requirements of the individual states. At the end you will also find a summary table with the key facts on the LLC in each state.

1Formation time

How long it takes to form an LLC varies from state to state. Anywhere from 2 days to two weeks is normal. Because government offices can always run into delays, we manage the process with active follow-up: when needed, we call the relevant offices so your filing gets processed as quickly as possible.

2Formation fees

Formation fees also vary widely between states. Fees between $90 and $500 are typical.

3Public disclosure in the state register

Usually the details of a member or manager, or the company's registered address, are published and open to public view. Other states publish no information at all, and members' details are not recorded by the state. You will find an overview by state in the table at the end of this page.

4Tax return

There is a basic distinction between the federal tax return and a separate state tax return.

If your LLC is structured the way we design it, the company itself owes no federal tax. That does not exempt it from reporting, though: foreign-owned single-member LLCs file Form 5472 with a pro forma Form 1120 cover sheet with the IRS every year, or face a $25,000 penalty per violation.

In principle, an LLC can choose to be taxed as a partnership or as a corporation. 99% of all LLCs opt for partnership treatment. The LLC then pays no tax itself; the members pay the tax instead. The LLC still has to file its own return (Partnership Tax Return).

5Operating Agreement

The rules on the operating agreement differ across US states, and also depend on the type of entity. For the Limited Liability Company, most states do not legally require an operating agreement, but a few do: Delaware, Maine, California, Missouri and New York.

Like the governing documents of other entity types, the operating agreement puts the arrangements between the members in writing. It protects each partner if disputes arise. That is why we advise every client to have one drawn up.

As a rule, the bylaws do not have to be filed with the state register anywhere.

6Annual report

The rules on annual reports vary by state and entity type. Most states require one for the Limited Liability Company, but some do not (Ohio, for example, has no annual report). Don't confuse the annual report with a tax return. It is simply a filing with the state's business registry confirming the company details on record (registered address, management, business purpose and so on).

Some states require a report every two years instead of every year. Our service covers the annual fee for preparing and filing the annual report as well as the state fees.

7Annual fees

Annual fees for the LLC also differ from state to state. Some states only charge a fee when you file the annual report. Others also levy a flat franchise tax.

8Overview table

The table below summarizes each state's legal requirements on the points covered here:

Here you can find out which states are especially popular with foreign investors, and why. For more on company formation, see our overview page Formation; the matching requirements for other entity types are covered in Compliance for the US C Corporation and Compliance for the US LP, and the tax side is explained on Taxation of the US LLC. And if you run your LLC with no US permanent establishment at all, our sister site zerotax.llc specializes in exactly that model.

In short

• Formation time and fees vary by state: two days to two weeks and fees between $90 and $500 are typical.
• With our structure, the LLC itself owes no federal tax. Foreign-owned single-member LLCs still file Form 5472 with the pro forma Form 1120 cover sheet every year, or face a $25,000 penalty per violation.
• Taxed as a partnership, the LLC pays no tax itself; the members do. The LLC still files a Partnership Tax Return.
• Only a few states require an operating agreement. We recommend one to every client, and it is not filed anywhere.
• Each state sets its own annual report and annual fee rules; the overview table compares nine states side by side.

How we help you

• Form an LLCThe US LLC with a permanent establishment, turnkey in six states.
• LLC and LP Tax ReturnForm 1065 and K-1 for your LLC or LP.
• Zero Tax Return LLCPro forma Form 1120 and Form 5472 for the single-member LLC.
• Apply for an EINYour company's US tax ID, applied for by us.
• Company formation consultationEntity type, state and tax consequences, before you commit.