The 10 Most Mistakes When Forming a US LLC
Forming a US LLC offers many benefits: tax advantages, anonymity, and a professional image.
However, many founders make mistakes that can become costly or problematic later on.
In this article, you’ll learn about the 10 most common mistakes when forming a US LLC – and how to avoid them.
1. Choosing the Wrong State
Not every state is the right fit for every founder.
Many simply choose Delaware or Wyoming because they’re frequently mentioned – without checking which state actually suits their individual situation best.
2. No Clear Business Address
A reliable business address in the US is essential.
Some use private or untrustworthy addresses, which can lead to issues with banks or government authorities later on.
3. No Registered Agent
Every US LLC is legally required to have a Registered Agent.
Without one, your LLC will be classified as “non-compliant,” which can lead to penalties or even dissolution.
4. Incorrect Information in the Formation Form
Even small mistakes in the formation form – like typos in the name, an incomplete address, or an incorrect business name – can cause major problems later.
This information goes directly into the official public register and cannot be easily corrected.
In the worst case, your formation gets delayed or extra costs arise.
So take your time – or seek professional guidance – to ensure everything is correct from the beginning.
5. Failing to Apply for an EIN
The Employer Identification Number (EIN) is required to open a business bank account and issue invoices.
Many founders skip this step or apply too late.
6. Not Opening a Business Bank Account
Without a US or international business bank account, it’s difficult to operate your LLC professionally.
Some founders skip this step and mix personal and business finances – a critical mistake to avoid.
7. Missing Deadlines
A US LLC must file certain forms and pay annual fees.
Missing these deadlines can lead to penalties or even the dissolution of your company.
8. No Operating Agreement Between Members
If your LLC has multiple members, an Operating Agreement is essential.
Without clear rules on responsibilities and ownership shares, internal conflicts are almost guaranteed.
9. False Expectations About Tax Exemption
Many assume that a US LLC is automatically tax-free.
That’s only true under specific conditions – and only if you also comply with local tax laws.
Proper consultation is essential here.
10. No Professional Guidance
The biggest mistake: trying to do everything on your own without expert support.
An experienced agency can save you a lot of time, effort, and money – and help you avoid serious legal or financial missteps.
Conclusion: Avoid Mistakes & Start Successfully
With proper preparation and professional support, you can avoid these common mistakes and make the most of your US LLC.
We’re happy to help you set everything up correctly – right from the start.
LLC formation
Start your own US LLC – ideal for online entrepreneurs, freelancers, and digital nomads.