5 of the Best States to Start an LLC in the United States

It seems as good a time as any to start a business in America despite the economic challenges faced by the world. The business formation statistics report by the United States Census Bureau shows that there have been 465,906 new business applications in June 2023 alone. This is already an increase from the previous month, with major industries such as agriculture, information technology, retail, and construction seeing significant increases.

The tech industry, in particular, is still expected to see major leaps in growth in the next five years, with the overall outlook for revenue looking promising to close out 2023. Of course, there is still the matter of mass inflation and workforce shortages plaguing new businesses.

So, an uneven climate calls for savvy entrepreneurs to choose a limited liability company (LLC) as their business structure. This allows business owners to limit their legal liability and personal risk when starting a business. Make sure you read up on the best states to form an LLC in the US and why they are the top options.

1. Nevada

Nevada is largely considered the best state to start an LLC because it has no state income tax, little to no franchise tax, and no need for an operating agreement. This offers a lot of freedom and flexibility for new LLCs, especially as this type of business structure is legally allowed to remain anonymous on public records. The Secretary of State highlights The Nevada Advantage for potential business owners, citing the previously mentioned benefits along with no personal income tax, nominal annual fees, and a very competitive employer payroll tax of just 0.7%.

It’s also great for tech companies in particular because of its very forgiving regulatory environment. On top of that, the state is being touted as the “next Silicon Valley” because of its modern infrastructures and data centers.

2. Kansas

The simplicity of how to start an LLC in Kansas is what makes it so great. You simply have to appoint your registered agent, file your Articles of Organization, get an EIN, and apply for any relevant business permits and licenses that have a bearing on the nature of your business. As if the process wasn’t already simple enough, you can even do the majority of these steps online.

Kansas has a relatively efficient filing process, so you won’t have to wait long to get your requirements. The ease of formation makes this the state to choose if you want to get established right away. It also doesn’t hurt that the climate here is very business-friendly.

3. Delaware

Delaware is another great state for LLCs, being known for having the most flexible system for this type of business structure in the country. Its model is even the one that Nevada built theirs on, focusing on minimizing the cost and risk of commercial litigation. Basically, Delaware is the place to be if you really want to protect yourself from potential liabilities.

Asset protection and statutory limitations have been built to encourage LLCs to plant their roots in the state. Additionally, it’s very easy for business owners to choose their taxation here – be it as a sole proprietor, partnership, or corporation.

4. Wyoming

Wyoming consistently appears among the states ranked as the best to start an LLC. This can likely be attributed to its low cost of living, favorable business climate, and low taxes for businesses.

In terms of tech-leaning LLCs, the state is becoming even more capable of these avenues. The Wyoming Business Council has just announced its first venture capital fund investment in 2023, with its initial investment in business language translation software company Language I/O. Although self-funded pursuits can already benefit from the state’s central environment, it’s even more promising now that external funding can be accessed easily within the state.

5. South Dakota

South Dakota is another great state to start your LLC in because of its 0% corporate tax rate and state income tax. Although the filing fees here are slightly higher than in other states, it is immediately offset by a more forgiving business environment that minimizes cost in the long run.

Aside from the usual benefits like flexibility, asset protection, and freedom of contract, LLCs established in South Dakota do not have a residency requirement. This means that you can fully operate your business here without being a resident of the state. The South Dakota LLC Act also ensures that LLCs can be considered perpetual entities, meaning they can continue on in an unlimited capacity even if the owner is suddenly unable to continue on.


Finding the right place is just as important for your business planning as other aspects like budgeting, branding, and marketing. By making use of the right benefits, you can really set yourself up for success. For more useful information and helpful guides to business, tech, and other solutions, check out our other Tips and Tricks.

the authorABHIYAN
Abhiyan Chhetri is a cybersecurity journalist with a passion for covering latest happenings in cyber security and tech world. In addition to being the founder of this website, Abhiyan is also into gaming, reading and investigative journalism.