Formation: what the filing actually creates

The filing that creates an LLC, usually the articles of organization, does far less than most owners assume, and at least two of its choices are quietly far more consequential, and far less reversible, than the form itself lets on.

What it actually decides

The articles typically state the name, the registered agent, sometimes the address, and whether the company is member-managed or manager-managed. They do not set voting rights, profit splits, or exit terms; those come from your state’s default rules or from an operating agreement written on purpose.

The pre-formation trap

An owner who signs a lease or takes a client deposit before the state accepts the filing is, in most states, personally liable for that contract under promoter liability doctrine, and forming the LLC afterward does not retroactively erase it unless the other party specifically agrees to substitute the company in.

The insight buried in the management-structure checkbox

Self-employment tax generally does not apply to a limited partner’s distributive share of partnership income, a real exception written into the tax code for limited partnerships. Whether that same exception applies to a member of an LLC is one of the more genuinely unsettled questions in federal tax practice. The IRS has argued, and at least one Tax Court case has agreed, that an LLC member who is actively involved in management does not function like a passive limited partner no matter what the state filing calls them, and proposed regulations addressing this directly have sat unfinalized for years, leaving the actual rule to depend on functional analysis of what a member actually does, not on the member-managed or manager-managed label chosen on the formation filing.

The second insight: the series-LLC decision that formation quietly locks in

A handful of states let a company form from the outset as a series LLC, a single company with internal walls between named series, each holding its own assets and liabilities, covered from the doctrine side in series LLCs. Choosing this structure has to happen, in practice, at or very near formation, because converting an existing traditional LLC into a series structure after the fact is, in most series states, difficult or simply unavailable as a clean statutory path, often requiring the traditional LLC to dissolve and a new series LLC to form in its place, losing the continuity, the EIN, and the operating history the original company built. An owner who forms a plain single LLC today, planning to “convert to a series structure later once the portfolio grows,” is often planning for an option that won’t actually exist when the growth arrives. The decision, unlike almost everything else on this page, is close to irreversible at the moment of formation itself.

When the company actually exists

Legal existence generally begins the moment the state accepts the filing, or on a delayed effective date. Owners planning a clean January 1 start sometimes file in December with a January 1 effective date deliberately, so the fiscal year lines up exactly.

Formation fee by state (priority states, verified against current sources)

State	Formation filing fee
Wyoming	$100
Delaware	$110
Nevada	$75 (plus a required $150 initial list and $200 business license)
Alaska	$250
South Dakota	$150
California	$70
Florida	$125
Texas	$300
New York	$200 (plus a separate publication requirement, commonly $300 to $1,500 depending on county)
New Jersey	$125

Last verified: July 2026, against current secondary sources. Full 51-state table with primary-source citations: table coming with the state research project.

What to actually do

Do not sign anything on the company’s behalf before the filing is accepted. Treat the member-managed versus manager-managed choice as a real conversation with a tax advisor, not a default click. If a series structure is even plausibly in the company’s future, evaluate it before formation, since the door to add it cleanly later is often already closed by the time the need is obvious.