Chapter 2 · Forming the Business

The step-by-step, do-it-in-a-weekend path to make your LLC real: Articles of Organization, an EIN, and a separate bank account.

Learning objectives

• Know the exact steps to form an LLC in your state.
• Get a federal Employer Identification Number (EIN).
• Open a business bank account and understand why separation is non-negotiable.

Why this order

There's a clean sequence. Each step gives you what the next one needs:

Step 1 · Form the LLC (the state filing)

Every state lets you register an LLC through its Secretary of State (or equivalent) website. The process is the same everywhere:

1. Pick a business name. Must be unique in your state and can't be too similar to an existing LLC. Usually you can check availability free on the Secretary of State website.
2. File your Articles / Certificate of Organization. This is a short form: your name, your registered agent, the business purpose. Online in most states, takes minutes.
3. Pay the filing fee — roughly $50–$300 depending on state (some states have ongoing annual fees too, notably California).
4. Get a Registered Agent. A person or company designated to receive official legal mail for the LLC. You can usually be your own registered agent (using your business address), or pay a service ~$100–$300/yr for privacy/an address.

Step 2 · Get an EIN (the federal number)

An Employer Identification Number (EIN) is the business's federal tax ID — like a Social Security number for the business. You need it to open a bank account, pay taxes, and if you ever hire anyone.

• Where: Free, directly from the IRS at irs.gov (the "Apply for an EIN online" tool).
• Cost: $0 — never pay for an EIN.
• Time: Minutes, online, instant.

Step 3 · Open a business bank account

This is the single most important money habit, and it directly protects your legal status. You need a separate business checking account (and ideally a business credit card) with the LLC as the account owner.

• Why it matters legally: If you mix personal and business money, a court can "pierce the corporate veil" and hold you personally liable despite having an LLC. Separation is what keeps your personal assets protected.
• What you'll need: the LLC paperwork and your EIN. A bank can open a business account with these.
• Business banking options: big banks, local credit unions, or online business banks (e.g., Mercury, Relay, Novo). Some have fees; some are free for small businesses — shop around.

Optional but smart: get the paperwork together

• Operating Agreement — even single-member LLCs should have one (a short doc stating who owns it and how it runs). Free templates exist; many banks and states recommend it.
• Keep your EIN confirmation, LLC filing, and registered-agent info in one folder — you'll need them for the bank, the lease, insurance, and taxes.

Summary

Forming the business is a straightforward three-filing sequence: register the LLC with your state (with a registered agent and a filing fee), get a free EIN from the IRS, and open a dedicated business bank account. Together these make the business real, legal, and financially separate from you.

Checklist

• ☐ Checked name availability and filed Articles/Certificate of Organization with your state.
• ☐ Appointed a registered agent (yourself or a service).
• ☐ Obtained a free EIN from irs.gov.
• ☐ Opened a business checking account under the LLC name.
• ☐ Saved a simple Operating Agreement.
• ☐ Kept all formation paperwork in one folder.

Looking ahead

Your LLC exists — but opening a public shop also needs the permits and licenses covered in Chapter 3 (business license, arcade/vending permit, sales tax permit).

Chapter 2 · Forming the Business · Claw Machine Business Guide