Forming Your Business Like a Boss: A Step-by-Step DIY Guide to Creating a Legal Business Entity Without a Lawyer

Starting a business doesn’t have to mean spending thousands on legal fees or waiting on someone else to make your vision official. With the right guidance and a little initiative, you can form your own legal business entity—all by yourself. Whether you’re launching a side hustle, creative agency, or scaling to something bigger, this DIY guide breaks down every step you need to take, along with pro tips to help you do it right.

Step 1: Choose the Right Business Structure

Before filing anything, decide which structure best fits your goals. The most common entities are:

• Sole Proprietorship – Simplest setup, but no liability protection.

• Limited Liability Company (LLC) – Offers liability protection and flexibility. Great for most small businesses.

• Corporation (C-Corp or S-Corp) – Good for raising capital, offering shares, and separating ownership from management.

• Partnerships – For two or more owners. Variants include LP and LLP.

Pro Tip:

If you’re looking for flexibility and protection without too much red tape, an LLC is usually the best option for solo entrepreneurs or small teams.

Step 2: Choose a Business Name and Check Availability

Your business name needs to be unique within your state. Check:

• Your state’s Secretary of State website to confirm name availability.

• Trademark databases (USPTO.gov) to ensure no one owns the name nationally.

• Domain availability for your website (use GoDaddy, Namecheap, etc.).

• Social media handles to keep branding consistent.

Pro Tip:

Even if you’re not ready for a website, secure your domain name and social handles early—it’s a small investment that protects your brand.

Step 3: File Articles of Organization (or Incorporation) and Obtain Certification

This is the official document that registers your business with the state. Once you submit your application:

• The registering state will generate your Articles of Organization (for LLCs) or Articles of Incorporation (for corporations).

• The state will issue a certified copy of your Articles as legal proof of formation.

• Additionally, upon request or after good standing requirements are met, the state issues a Certificate of Good Standing (also called Certificate of Existence), which verifies your business is compliant with state laws and authorized to operate.

  
  

Alongside the Articles, prepare these internal legal documents:

1.   Operating Agreement (LLC) – Outlines member roles, ownership percentages, voting rights, profit distribution, and exit strategy.

2.   Shareholders’ Agreement (Corporation) – Defines rights and responsibilities of shareholders, share transfer restrictions, and buy-sell provisions.

3.   Promissory Note or Loan Agreement – If you’re investing your own funds into the business as a loan rather than equity, document it with a signed loan agreement. This formalizes repayment terms and protects your personal capital.

4.   Initial Resolutions & Meeting Minutes – Record initial decisions such as appointing directors/officers, authorizing bank accounts, and issuing shares or membership units.

Pro Tip:

Keep all your business formation documents securely saved—both digital and print copies are essential for opening bank accounts, applying for credit, or bringing on investors.

Step 4: Get an EIN (Employer Identification Number)

An EIN is like a Social Security number for your business. You’ll need it to:

• Open a business bank account

• File taxes

• Hire employees

• Apply for business credit

Apply for free at the IRS website: https://irs.gov/businesses

Pro Tip:

Avoid paying third-party services for an EIN. It’s completely free through the IRS and takes less than 10 minutes.

Step 5: Create an Operating Agreement or Corporate Bylaws

Though not always required by law, these internal documents define:

• Ownership structure

• Voting rights

• Profit sharing

• Management responsibilities

• Exit strategies

You can use free or low-cost templates from legal websites, then customize to fit your needs.

Pro Tip:

If you’re forming an LLC, an Operating Agreement is essential—even if you’re the only member. It proves separation between you and your business, which protects your liability status.

Step 6: Register for State & Local Licenses or Permits

Depending on your business type and location, you may need:

• A general business license

• Sales tax permit

• Zoning permits

• Health or safety permits

Check your state and city/county websites to see what’s required.

Pro Tip:

Use SBA.gov or your local Small Business Development Center (SBDC) to find out which licenses or permits apply to your business type.

Step 7: Open a Business Bank Account

To maintain liability protection and keep finances clean:

• Open a business checking account

• Get a business debit or credit card

• Keep all income and expenses separate from personal finances

You’ll need your EIN, Articles of Organization/Incorporation, and Operating Agreement.

Pro Tip:

Choose a bank that reports to business credit bureaus and offers tools for growth (e.g., business lines of credit or merchant services).

Step 8: Set Up Business Accounting and Bookkeeping

Even if you’re just starting, keeping good financial records is key.

• Use accounting software like QuickBooks, Wave, or Xero

• Track income, expenses, receipts, and invoices

• Set aside funds for taxes (consider quarterly payments)

Pro Tip:

Open a separate savings account for taxes so you’re not caught off guard during tax season.

Step 9: Protect Your Business Legally

Now that your entity is official, make sure you’re covered:

• Get business insurance (liability, property, professional, etc.)

• Draft contracts for clients, vendors, and team members

• Consider filing for a trademark for your business name or logo (but see the note below about startup costs)

Pro Tip:

Use platforms like LegalZoom, Rocket Lawyer, or HelloSign for contract templates and simple legal documents without hiring a full-time attorney.

Step 10: Build Your Brand & Go Public

You’re now a legal business owner—time to show the world.

• Design a professional logo and website

• Create a Google Business Profile

• Launch social media pages

• Announce your launch with email marketing, ads, or a press release

Pro Tip:

Build authority fast by offering something free or exclusive at launch—like a downloadable resource, discount, or giveaway. It attracts early customers and builds your mailing list.

Best States to Start Your Business (and Why)

Some states offer advantages in terms of filing costs, low red tape, and favorable tax treatment.

State	Benefits	Ideal For
Colorado	Very low filing cost (as low as $1), efficient online system, fast approval	Startups, creatives, small business owners
Wyoming	No state income tax, low fees, strong asset protection, anonymous ownership	Real estate investors, privacy-conscious owners
Delaware	Business court (Court of Chancery), favorable for corporations raising capital	Startups, corporations raising capital
Texas	No corporate income tax (franchise tax applies), fast-growing economy	Mid-sized companies, logistics, tech
Florida	No personal income tax, growing market, especially for online and service businesses	Service-based and online businesses
Your Home State	Easier compliance and no foreign registration fees	Local service or brick-and-mortar businesses

Pro Tip:

While forming in a “business-friendly” state sounds great, if you live and operate elsewhere you’ll likely need to register as a foreign entity in your home state, which adds costs and paperwork.

Registered Agent Fees & Importance

Every business entity needs a registered agent—a person or company designated to receive official legal and tax documents.

• Many states require a physical address in the state of formation (no P.O. boxes).

• You can be your own registered agent if you have a physical address and are available during business hours.

• If you prefer privacy or don’t live in the state of formation, you’ll need to hire a registered agent service.

Pro Tip:

Registered agent fees typically range from $100 to $300 per year. Choosing an affordable, reliable agent saves money and ensures you don’t miss important deadlines.

Recommended Registered Agent Services:

• RegisteredAgents.com

• Northwest Registered Agent

• Incfile Registered Agent Service

• Harbor Compliance

Important Tax & Legal Structure Tips

• LLCs are flexible and can choose to be taxed as sole proprietorships, partnerships, or S-Corps.

• S-Corps offer tax benefits by allowing you to pay yourself a reasonable salary and take the rest in distributions—often reducing self-employment tax.

• C-Corps are best if you plan to go public or bring in venture capital, but watch out for double taxation.

Pro Tip:

Avoid holding real estate inside an S-Corp or C-Corp. These entities don’t allow step-up basis and create complicated tax consequences when selling. Use an LLC instead, which provides pass-through taxation and better exit options.

Don’t Get Caught Up in the Small Stuff That Drives Up Startup Costs

When you’re just getting started, avoid spending unnecessarily on:

• Trademarking your brand (unless you have an immediate risk of infringement)

• Expensive marketing campaigns

• High-cost product lines (like apparel, shoes, or fashion) before market testing

• Overpriced website designs—start simple and scale

• Unnecessary or overly expensive legal fees

Keep your startup lean and focus on building a solid business foundation first.

Final Thoughts

Creating a legal business entity yourself isn’t just doable—it’s empowering. It puts you in the driver’s seat and saves you thousands in setup fees. With the right steps and smart planning, you’ll not only be official but also positioned to scale with confidence.

Like a boss.