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How to start an LLC: CA, NY, NJ and TX before your first hire

By Jason Seo, SHRM-CP®

Official sources checked: October 24, 2026; selected points rechecked October 28 and 30, 2026

If you register an LLC(state-law business entity) today, what else must happen before you can open your café and take money home? A hypothetical first-time owner is preparing to open a café, with no employees yet and no corporation tax election planned. Before paying a formation website, the owner needs to separate three questions: where to form, which approvals allow the café to open, and how business profit becomes personal income.

The working example assumes one individual owner who already has permission to work in the United States. Federal tax rules provide the common starting point, while the actual operating state decides the formation and local registration tasks. The state pages below carry the detailed filing instructions; use this overview to choose the right path and prepare one consistent set of records.

The original fact check was October 24, 2026. The filing distinctions and cross-links below were reviewed again on October 28, 2026.

Owning a company and working for it are two different things under immigration law. Forming an LLC doesn't give anyone permission to work in the US.

US citizens and green card holders can own and work in their business. If you're in the US on a visa, your status decides what you can do.

USCIS says B-1 visitors can't open and operate their own business here. F-1 students may start, own and work for their own business during their initial period of OPT. They need an approved work permit (EAD(employment authorization document)), and the work has to relate to their field of study.

Other paths exist for founders, such as E-2 for investors from treaty countries, L-1A(qualifying intracompany-transfer category), O-1A and international entrepreneur parole. Each one limits the role you can play.

No state filing office checks your work authorization. Working without it can put your status at risk.

In most cases, form the LLC in the state where you actually run the business. That's where your shop, your office or you as the only worker are.

You'll see ads for Delaware or Wyoming LLCs. If you then do business in your home state, you register that out-of-state LLC there too and pay both states' fees. California is the clearest example. For an ordinary default-taxed LLC doing business in California, the Franchise Tax Board generally applies the $800 annual tax even if the entity was formed elsewhere. Corporation-taxed LLCs and specific exceptions need separate treatment.

For a local business, forming somewhere else usually means paying twice.

Compare liability exposure, tax administration and financing plans before choosing a form. A one-owner service business, a café signing a lease and a company seeking outside investors may need different arrangements. An LLC does not replace suitable insurance, and an S corporation is a tax classification with eligibility rules, not a different formation fee in this table.

An LLC can limit your personal liability for business debts, though a personal guarantee on a loan or lease still binds you. For federal income tax, the IRS ordinarily treats a one-owner LLC as part of its owner unless it elects corporation taxation. An individual business owner generally reports operations on the applicable personal-return schedule; employment, excise and state filings remain separate questions.

Your structure sets your recurring federal and state filings.

Formation rules differ by state. Each state checks that your name is unique, asks who receives legal papers for the LLC, and charges a filing fee.

New York's publication rule is the one that surprises people. The county clerk picks the newspapers, and their charges vary a lot by county. Skip it and the state can suspend the LLC's authority to do business.

Step-by-step pages: California, New York, Texas, New Jersey.

An EIN identifies the business for federal tax administration. Form the LLC with the state first, then use the IRS EIN application. The IRS charges no application fee; any paid preparer charge is a separate service fee.

The online route requires a US or US-territory principal place of business and the responsible party's SSN(Social Security number) or ITIN(individual taxpayer ID), along with other eligibility conditions. If that route does not fit, use the IRS's alternative application instructions rather than entering an invented identifier. Approval can produce the EIN immediately, but approval is not guaranteed.

Have the approved legal name, formation date, addresses, owner information and business activity ready before starting. Save the confirmation letter when issued, then match it with the formation record before using the number for tax registration or payroll. A bank's document checklist is separate from the IRS application.

Every state runs its own sales tax and payroll tax accounts. The trigger and the deadline differ.

Sales tax isn't your money. If you forget to collect it, you still owe it.

Most small businesses need a mix of state trade licenses and city permits, not one business license. Cities control zoning and occupancy for your space. Before you sign a lease, check zoning and permits for that exact address with the city or county.

Workers' comp is the biggest state difference. New Jersey, New York and California require it once you have employees, and California's labor department says that means even one employee.

Texas lets most private employers opt out, but an employer without coverage loses the legal limit on what an injured worker can sue for.

Banks usually ask for your state formation document, your EIN letter and photo ID. Keep business money in this account and personal money out of it, so the LLC's records stay separate from yours.

None of these four states asks you to file your operating agreement with them, and New York requires you to adopt one within 90 days of forming. Write one in every state. It says who owns what, who decides and what happens if someone leaves.

A one-owner LLC taxed the default way doesn't put you on payroll. You take an owner's draw and pay tax on the profit, whether you take it out or not.

Here's the state-fee math for a one-owner LLC, before tax on your profit and before optional services like a registered agent.

The table compares specific state filing charges for the stated default-taxed, one-owner example. It is not a total business-cost ranking: local permits, agent services, insurance, income taxes and the owner's actual operating location remain outside the totals. The California and New York figures average biennial charges over two years rather than describing an annual invoice.

Texas has no individual income tax and may have no franchise tax due below the applicable revenue threshold. That is useful for an owner who actually operates there; it is not a reason to put a Texas address on a business run elsewhere. An out-of-state formation can add registration costs without removing obligations in the operating state.

Texas-specific filings and reporting: How to start an LLC in Texas.

Some rules are federal, so they apply in every state. The employee fills out Section 1 of Form I-9(employment-eligibility verification form) by the first day of work, and you complete Section 2 within three business days after the first day of work, or on day one for employment lasting fewer than three business days. You also collect Form W-4(federal withholding form). You and the employee each generally pay 7.65% for Social Security and Medicare on covered wages, and you pay federal unemployment tax.

State rules add wage, leave and reporting duties:

The full hiring steps for all four states are in How to hire your first employee in the US. To compare total cost by state, try the employee cost calculator.

Before paying a filing service, agree who will make operating decisions and sign for the business. A one-owner café and a business with a passive investor can need different management terms. Record the proposed member-managed or manager-managed arrangement and ask counsel to align the filing and operating agreement where necessary.

Then keep three completion dates: state acceptance, permission to open at the actual address, and readiness to pay an employee. The first date does not settle the other two. This guide compares the four states covered here; a business operating elsewhere needs that state's own formation, licensing and employment guidance.

Do I have to form my LLC in the state where I live? You form it where you do business. You can form in another state, but you then register in your home state too and pay both sets of fees.

Which state is cheapest to form an LLC in? Of these four, California has the lowest filing fee ($70), but it charges an $800 annual tax every year. Texas costs $300 to form and generally no franchise tax due at or below the applicable annualized-revenue threshold; required information reporting remains.

Do I need a registered agent? New Jersey, California and Texas require an agent with an in-state address. In New York, the Department of State receives legal papers for the LLC, so a separate agent is optional.

Do I need to file a BOI report? No, not for a company created in the US. FinCEN's final rule took effect August 14, 2026.

Can I start an LLC on a visa? Forming and owning an LLC is a different question from working in it. Whether you can work in the business depends on your immigration status, so check with an immigration attorney before you start working.