What to Do After Forming an LLC: The 9 Steps That Come First

The certificate arrived and nothing about your business has actually changed yet. Nine things turn a filed LLC into a working one, and the order matters more than the list: get the EIN first, because the bank account needs it; open the business account next, because every other step points money at it; then move your invoicing, your W-9 and your payment rails onto the entity's name. The EIN is free and issued in minutes. The account takes a day or two. The step most people skip — actually keeping the money separate afterwards — is the one that decides whether the protection you paid for holds up when someone tests it.

The Nine Steps, In Order

Three of these are one-time paperwork, three are plumbing, and three are habits. Do them in this sequence and nothing blocks anything else; do them out of order and you will be waiting on an EIN letter with a client payment already in flight.

1. Get the EIN — Free, and Directly From the IRS

An EIN is the LLC's federal tax identification number. You apply for it yourself on the IRS site, it costs nothing, and during the IRS system's published hours the number is issued at the end of the session rather than mailed weeks later. Apply at the IRS page for applying for an EIN online and nowhere else — the services charging $70 to "file" it are filling in the same free form.

A single-member LLC is, by default, a disregarded entity for federal tax purposes, which means you could technically keep using your Social Security number. Get the EIN anyway, for two practical reasons:

• It keeps your SSN off every W-9 you hand out. You are about to send that form to every client who pays you. One of them will store it badly.
• Business accounts and payment platforms ask for it. Applications are routinely declined for an EIN that is still "pending" rather than issued — which is the whole reason this step is first and not fourth.

Save the confirmation notice as a PDF the moment it appears on screen. That document is what a bank asks you to upload, and re-requesting it later is slower than the original application.

2. Sign an Operating Agreement, Even as the Only Member

An operating agreement is the LLC's internal rulebook: who owns what percentage, what each member contributed, how profits are distributed, who can sign what, and what happens if a member leaves or the company winds down. In most states you do not file it anywhere — it lives in your records. That is exactly why solo owners skip it, and exactly why skipping it causes problems later.

Two concrete reasons to have one before you do anything else on this list. First, banks and payment platforms frequently ask for it during onboarding, alongside the formation certificate and the EIN letter. Second, it is part of the evidence that the LLC is a separate thing from you — the written answer to "is this a real entity or a person with a certificate?". If you used a formation service, you probably already have one; read it rather than filing it unread, because the default templates sometimes assume multiple members and distributions you never intended.

If you are still deciding between structures rather than acting on a decision already made, the SBA's guide to choosing a business structure is the neutral version, and our own comparison of sole proprietor vs LLC for freelancers covers what the change actually buys.

3. Find Out What You Now Have to File

Forming an LLC subscribes you to a small set of recurring obligations, and the clocks start at formation whether or not anyone tells you. There are three layers, and only one of them is federal:

• Federal beneficial-ownership reporting. The Corporate Transparency Act created a report, administered by FinCEN, identifying who owns and controls a company. Who is in scope changed more than once during 2024 and 2025, so this is the one item on the page where a remembered answer is worse than no answer — check the current rule and your own company's position on FinCEN's beneficial ownership information page or with your accountant.
• State annual report or franchise tax. Almost every state wants a short filing, a fee, or both, on a schedule tied to your formation date or the calendar year. The amount and the deadline are genuinely state-specific; your Secretary of State's own site is the authority, not a summary table on a blog.
• Local licences and registrations. City or county business licences, a sales-tax permit if you sell taxable goods, and a DBA registration if you will trade under a name other than the LLC's legal one.

Write every deadline you find straight into step 9's calendar while you have the information in front of you. You will not remember it in eleven months.

4. Open the Business Bank Account

This is the step that makes the rest real, and it is the first point at which the LLC does something a sole proprietorship could not. Bring four things: the stamped formation document from the state, the EIN confirmation notice, the operating agreement, and personal ID for every owner. Most providers also want a business address — and a registered agent's address or a PO box is a known reason for an application to be declined, so use an address where the business genuinely operates.

The SBA's short explanation of opening a business bank account covers why it matters; the practical part is which provider will actually take you. Eligibility varies much more than the marketing suggests. Several of the online options are open only to registered entities — which, as of this week, you are — while others take sole proprietors as well. A few exclude residents of particular countries entirely, regardless of where the company is registered. If you want the answer for your own situation rather than a list, our business bank account finder is a five-question quiz that includes "you are not eligible for this one" among its answers.

Mercury is one honest option among several and it is the one we are a disclosed referral partner for. It requires a US LLC or corporation — sole proprietorships cannot open an account — and it is unavailable to residents of a published list of countries. If that fits you, our walkthrough of how to open a Mercury account covers the documents and the reasons eligible companies still get declined. If it does not, the finder above will say so and point somewhere else.

5. Re-Paper Your Clients

Your clients are paying an entity that no longer matches their records, and they will not fix it for you. Three things change, and all three should go out together rather than as three separate emails:

• A fresh Form W-9 showing the new name and the EIN. The W-9 instructions are specific about which name belongs on which line for a single-member LLC, and it is not the line most people guess — read them rather than filling it in from memory, because a mismatch between the name and the taxpayer ID is what produces a backup-withholding notice a year later.
• The payee name on your invoices. Use the LLC's exact legal name, including the "LLC", plus your trading name if you use one.
• New remittance details pointing at the business account from step 4.

One timing warning worth more than the rest of this section: at anything larger than a few people, changing a payee name means creating a new vendor record, and that can take weeks of someone else's time. Send the new W-9 and the new details between projects if you can, not attached to an invoice you need paid this month. Ask explicitly whether they need anything else to set up the new vendor — that question saves the invoice that would otherwise sit unpaid while two departments wait for each other.

In InvoiceBloom, the business name on an invoice is pre-filled from your profile, so updating it there means new invoices carry the LLC's name; invoices you have already sent keep the name they went out with, which is correct — you should not retroactively rewrite a document someone has already paid.

6. Point the Payment Rails at the Entity

Changing the payout bank account is the obvious half of this step and the smaller half. The part people miss is the legal entity and tax ID on the processor account itself. If your Stripe or PayPal account is still registered to you as an individual with your SSN, that is the name on the information returns at year end, no matter whose bank account the money landed in — and reconciling a form issued to the wrong taxpayer is a genuinely annoying way to spend a January.

So for every rail that touches client money: update the business type to the LLC, enter the EIN, re-verify whatever they ask you to re-verify, and only then change the payout account. Platforms and marketplaces that pay you have their own tax-information forms and need the same treatment. If you are weighing up which rails you need at all, our comparison of payment software for freelancers covers the cost and timing trade-offs.

7. Start the Separation Habits

Here is the part no filing can do for you. The liability protection an LLC offers depends on the company being treated as a company — and the facts that decide it are mostly bookkeeping facts. Paying personal expenses straight out of the business account is the single most common way owners undermine their own structure.

The working rules are simple and almost entirely mechanical:

• Client money arrives in the business account. All of it, every time.
• You pay yourself by transferring money to your personal account — an owner's draw — and then spend it from there. Not by buying groceries with the business card.
• Business expenses come out of the business account, so your records assemble themselves instead of needing reconstruction in April.
• Sign contracts in the LLC's name, with your title, not as yourself.
• Keep the records. The IRS sets out what it expects in its recordkeeping guidance, and the SBA's notes on managing business finances cover the bookkeeping side.

If you want the longer version of why the daily habits matter more than the certificate, how to track business expenses as a freelancer goes through the mechanics. This is general information rather than legal advice — if you have real exposure, the hour with a lawyer is worth more than any article.

8. Settle Your Tax Position Before the Next Quarterly Deadline

Forming an LLC, on its own, changes nothing about what you owe. By default a single-member LLC is taxed as a disregarded entity — business income and expenses land on your personal return exactly as they did as a sole proprietor — and a multi-member LLC is taxed as a partnership. Self-employment tax on your net earnings is unchanged, and so are the quarterly estimated payments. The IRS Self-Employed Individuals Tax Center is the starting point, and Publication 334 is the long form.

What the LLC does give you is the option to be taxed differently, by electing S-corporation treatment. Above a certain level of profit that can reduce self-employment tax, at the cost of running payroll for yourself and filing an extra return — which is why it is a modelling exercise with an accountant rather than a default. Two things to know before you file it away as "later":

• The election has a deadline measured from the start of the tax year, not from when you decide. Miss it and you are generally waiting for the next year.
• The arithmetic only works above a profit threshold — below it, the payroll and filing costs eat the saving. Get the number run on your actual figures.

Confirm the current rules and dates with the IRS or your accountant rather than any article, including this one. If you want a rough sense of the numbers first, our freelance tax deductions guide covers what reduces the taxable figure in the first place.

9. Calendar What Repeats

The EIN never expires and the operating agreement does not renew, but three things do, and all three are easy to miss because nothing arrives to remind you:

• The state annual report or franchise tax, on its own schedule and with its own fee.
• The registered agent, if you are paying a service for one.
• Local licences and permits, which often renew on the calendar year rather than your formation date.

Missing the annual report is not a parking ticket. States typically apply a late fee, then mark the company delinquent, and eventually administratively dissolve it — at which point the entity whose protection you are relying on has stopped existing, usually without you knowing. Reinstatement is normally possible and always more expensive and slower than the filing would have been. Put every date in a calendar with a two-week warning, today, while you still have the state's website open.

What Forming an LLC Did Not Change

Worth being blunt about, because the gap between what people expect and what an LLC does is where the unpleasant surprises live:

• Your responsibility for your own work. An LLC separates business debts from personal assets. It does not make you personally un-suable for your own negligence or professional mistakes — that is what professional liability insurance is for.
• Personal guarantees. Anything you have personally guaranteed — a lease, a loan, a line of credit — you still personally owe.
• Contracts you signed before formation. Those are agreements with you. New work goes under the LLC; existing agreements need assigning or re-signing if you want them to sit with the company.
• Your tax bill, by default. See step 8.
• The need to invoice properly. Clients still want a correct document with the right payee, the right terms and a usable invoice number. If anything the standard goes up, because the name on the invoice is now a registered entity.

None of this makes the LLC a bad decision. It makes it a structure that works when you operate it as one — which is, in the end, what the nine steps above are for.

Frequently Asked Questions

Do I need an EIN if my LLC has no employees?

Not strictly, if you are the only member: a single-member LLC with no employees and no excise-tax obligations can often use the owner's Social Security number for federal purposes. Get one anyway. It costs nothing, it is issued in minutes, it keeps your SSN off every W-9 you hand to a client, and business accounts and payment platforms ask for it as a matter of course. The one rule to follow is to apply directly on the IRS site rather than paying a service to type the same form for you.

How soon after forming an LLC should I open the business bank account?

Before the next client payment arrives, and after the EIN confirmation is in hand — those two conditions set the window. In practice that means the same week you form, because a payment that lands in your personal account is a commingling problem you then have to document your way out of, and because a pending EIN is one of the common reasons an otherwise eligible application is declined. Have the formation certificate, the EIN notice, the operating agreement and your ID ready before you start the application.

Do I have to change my invoices after forming an LLC?

Yes, and the change is bigger than the name. The payee becomes the LLC's exact legal name, the remittance details point at the business account, and your clients need a new W-9 carrying the new name and EIN. Send all three together, and send them between projects where you can: at a company of any size, a changed payee name means a new vendor record, and that is a slow internal process you do not want sitting in front of an invoice you need paid this month.

Does forming an LLC lower my taxes?

By itself, no. A single-member LLC is a disregarded entity by default, so the income and expenses land on your personal return exactly as before, and self-employment tax is unchanged. What the LLC adds is the option of electing S-corporation treatment, which can reduce self-employment tax above a certain level of profit — at the cost of payroll and an extra return. The election has a deadline measured from the start of the tax year, so if it is interesting, it is worth modelling with an accountant now rather than in December.

Can I keep using my personal bank account for the LLC?

Technically nothing stops you, and doing it undercuts the main reason you formed the company. The liability separation an LLC provides is evaluated on whether you actually treated the business as separate, and a single account for both is the clearest possible evidence that you did not. It also makes bookkeeping, tax preparation and any future financing conversation much harder than necessary. Open the business account, route all client money there, and pay yourself by transfer.

Do I need an operating agreement if I am the only member?

Most states do not require one, and you should still have one. It is routinely requested during bank and payment-platform onboarding, it settles questions about ownership and distributions before they become arguments, and it is part of the paper record that the LLC is a distinct entity rather than a renamed you. If a formation service generated one for you, read it — the templates sometimes assume multiple members or distribution rules that do not match what you intended.

What happens if I miss my state's annual report?

The usual sequence is a late fee, then a change of status to delinquent or not in good standing, then administrative dissolution if it goes unaddressed long enough. The last of those is the one that matters: the entity you are relying on for liability separation stops existing, often without anybody telling you, and anything you signed in its name afterwards is on shakier ground. Reinstatement is normally available and always costs more than the original filing. Calendar the date with a two-week warning the day you form.

Related Reading

• → Sole Proprietor vs LLC for Freelancers
• → Business Bank Account Finder (5 questions, honest answers)
• → How to Open a Mercury Account
• → Freelancer vs Contractor: Key Differences for Tax & Invoicing
• → Free Invoice Generator (no account needed)