Starting a small business in the US: LLC, EIN and tax basics

People who want to open their own business in the US usually start with two things: choosing a business structure (often an LLC — a limited liability company) and getting an EIN (a federal tax number) from the IRS. Below, business types, how an LLC is registered, how an EIN is obtained, how tax works and the rules for non-citizens are set out using only official sources — the Small Business Administration (SBA) and the Internal Revenue Service (IRS). This is general information, not legal or tax advice.

Business structures

According to the SBA, the main business structures are: sole proprietorship, partnership, LLC (limited liability company) and corporation (C-corp and S-corp). The key difference is liability: a sole proprietor and general partners have unlimited personal liability, meaning personal assets answer for business debts; an LLC and a corporation provide limited liability — the owner's personal assets are protected and generally only the company itself is liable.

What an LLC is and how it is registered

An LLC is formed at the state level: you file articles of organization with the relevant state office — naming the company, its address, its members and a registered agent. Under SBA rules, an LLC, corporation or partnership must have a registered agent in the state, located in that state. In many cases an operating agreement — the document setting the company's internal rules and finances — is drawn up; most states do not require one, but it is recommended.

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State fees

The LLC registration fee varies from state to state. As of 2025–2026 it can run from about $35–$40 (the cheapest states) to $500 (the most expensive), with most states in the $50–$200 range. Check the exact amount with the Secretary of State of the state where the business is registered.

The EIN — federal tax number

An EIN (Employer Identification Number) is a nine-digit federal tax ID the IRS assigns to a business. The IRS warns explicitly: getting an EIN is completely FREE — you never have to pay a fee for one. You can get it online on the IRS's official site (issued immediately), or by faxing/mailing Form SS-4. An EIN is needed for a partnership, an LLC, a corporation, a business with employees, or organizations that pay employment or excise taxes.

How tax works

According to the IRS, a single-member LLC is usually treated not as a separate taxpayer but on the owner's personal tax return (a disregarded entity), while a multi-member LLC is taxed as a partnership; either can elect corporate treatment via Form 8832. So an LLC's profits and losses usually pass through to the owners' personal income. As the SBA notes, LLC members are considered self-employed and pay self-employment tax toward Social Security and Medicare.

Can non-citizens own an LLC

Citizenship or permanent-resident status is not required to own an LLC in the US — foreign nationals and non-residents can own a US LLC. A person without an SSN (Social Security number) can still get an EIN: on Form SS-4, if the responsible party has no SSN/ITIN, line 7b is marked 'Foreign'. International applicants with no legal residence or principal place of business in the US can get an EIN by phone: the IRS number is 267-941-1099 (Monday–Friday, 6 a.m.–11 p.m. Eastern; not toll-free). An ITIN is not required to get an EIN.

Important: ownership is not work authorization

Owning an LLC does not by itself grant permission to work in the US, a visa or immigration status — company ownership and the right to work in the US are two separate legal questions. A person on a non-immigrant visa can usually own a business, but performing day-to-day work (providing services) inside it requires work authorization appropriate to their status; passive ownership or investment is generally allowed. This is status-specific and nuanced, so consult USCIS or an immigration attorney.

Licenses and permits

According to the SBA, most businesses may need federal, state, county and local licenses and permits depending on the activity and location (for example, regulated activities such as alcohol, firearms, agriculture, aviation and broadcasting require federal licenses). Check the permits you need with state agencies.

Separating business and personal money

The SBA recommends opening a separate business bank account once you have your EIN: it keeps business funds apart from personal money, reinforces the limited-liability protection and helps track business expenses clearly.