The One-Afternoon Setup: LLC, EIN, Bank Account

The default setup for a one-person service business is a single-member LLC in your home state, a free EIN straight from irs.gov, and a separate business checking account. Done in that order, the whole thing fits in one afternoon and costs whatever your state charges to file — typically somewhere between $50 and $500. This page is that afternoon, step by step, plus the three situations where the default is wrong.

One framing note before the steps: this is orientation, not legal advice. For the default case — one owner, no investors, ordinary service work — the path below is genuinely this simple. If you hit one of the exceptions at the bottom, a lawyer’s or CPA’s hour is worth it, and this page will have done its job by telling you which hour to buy.

Step 1: File the LLC (60–90 minutes)

Go to your state’s Secretary of State website — search “[your state] Secretary of State LLC filing” and make sure the domain ends in .gov — and file Articles of Organization online. You will need:

• A business name. Search the state’s database first; the filing bounces if it’s taken. You can operate under a different public-facing name later (a “DBA”), so don’t agonize.
• A registered agent. Be your own. It’s a person at a street address in the state who can receive legal mail during business hours. If you live and work in-state, that’s you, for free. The exception: if you work from home and the registered agent address being public bothers you, a service runs roughly $100–$300 a year. That’s the one upsell on this page that’s sometimes worth it — the rest aren’t.
• The filing fee. States range from under $50 to about $500; check your state’s own fee page rather than any third-party chart, because these change. Most states also charge an annual or biennial report fee afterward — put that renewal date in your calendar today, because the late penalties are pure waste.

File in your home state. You will read that Delaware or Wyoming is “better.” For a solo service business it isn’t: you’d pay two states’ fees and still register in your home state anyway, because that’s where you actually work. Delaware is for the investor exception below, not for you.

Skip every add-on the filing flow or a formation site offers: “expedited EIN,” “operating agreement package,” “compliance kit,” “certified copies.” A one-page operating agreement template (your state bar or SBA site has free ones) saying you own 100% is plenty for a single member — sign it, file it in a drawer.

Step 2: Get the EIN — free, from the IRS only (15 minutes)

Once the state confirms the LLC (instant to a few days, depending on state), go to irs.gov and search “apply for EIN online.” The application is free, takes about fifteen minutes, and issues your number immediately during business hours.

The trap worth a paragraph: search “get an EIN” and the top results are middleman sites charging $75–$300 to submit the same free form, dressed up in IRS-looking design. The decision rule is absolute — if a website asks for payment to issue an EIN, you are on the wrong website. The only address that should take your information is irs.gov.

When the form asks, a single-member LLC with no employees is a “disregarded entity” — that’s normal, not a problem. It means the IRS taxes you like a sole proprietor while the state treats the LLC as a separate legal shell. Print the confirmation letter (CP 575) to PDF the moment it appears. The bank wants it in step 3, and reprints from the IRS take weeks.

Step 3: Open the business checking account (60 minutes)

Same afternoon if you can. Bring (or upload): the stamped Articles of Organization, the EIN letter, and your ID. Any bank works; a free business checking account with a debit card is the entire requirement. Decline merchant services, credit lines, and payroll add-ons for now.

Then adopt the one rule that makes the LLC worth having: every business dollar in, every business expense out, through this account only. The LLC’s liability shield depends on the business being separate from you; the account is what makes that separation real, and it’s also what makes taxes and the tax set-aside mechanical instead of forensic. If you need money for groceries, transfer it to your personal account first — that’s an owner’s draw, and page 2.4 turns it into a system.

While you’re there, open a second savings account at the same bank and label it “taxes.” It costs nothing today and chapter 02 depends on it.

The three situations where the default is wrong

You have a partner. A multi-member LLC is a different animal: you need a real operating agreement covering ownership splits, what happens when one of you wants out, who can sign what, and how profits actually divide — and the tax filing changes (a partnership return, due a month earlier than personal returns). Do not file the cheerful online form and sort it out later; “later” is when you’re no longer speaking. Spend the few hundred dollars on a lawyer’s hour first.

You’re taking investors, or building toward them. Investors generally want a C-corporation (usually Delaware), not an LLC, and converting later is expensive. Merely planning to hire employees someday does not put you in this bucket — an LLC hires employees fine — but raising outside money does. If that’s the plan, get startup-specific legal advice before filing anything.

You’re in a licensed profession. Doctors, lawyers, accountants, architects, therapists, and similar licensed fields often can’t use a standard LLC — many states require a PLLC or professional corporation instead, and your licensing board’s rules control, not the Secretary of State’s. Check the board’s website before you file; filing the wrong entity means paying to dissolve and refile.

If-this-then-that, on one line each

• Solo, ordinary services → single-member LLC, home state, today.
• Solo but barely started, under ~$1,000 revenue, still testing → staying a sole proprietor for a few months is a defensible choice; the flip point is the first real client contract or the first liability-shaped risk. Get insured either way.
• Partner(s) → lawyer first, filing second.
• Investors now or soon → startup lawyer, probably a Delaware C-corp.
• Licensed profession → licensing board’s entity rules before anything.

What you have when the afternoon ends

A legal entity, a tax ID, and a clean financial boundary between you and the business — the three things every later page assumes. Calendar the state’s annual report date, file the operating agreement and EIN letter somewhere findable, and move on. The next dollar you earn goes through the new account, and the next page makes sure one bad day can’t take the whole thing down.