How to Legally Start a Business in 9 Simple Steps (Without Wasting Money)
Wondering how to legally start a business without missing an important step or wasting money on things you don’t actually need?
Starting a business in the United States is surprisingly straightforward — but only if you know what’s required and what’s optional.
As a business lawyer, I’ve seen too many beginner entrepreneurs overpay for formation packages, skip basic compliance steps, or assume an LLC alone will magically protect them.
In this guide, I’ll walk you through how to legally start a business in 9 simple steps, including choosing the right entity, forming your LLC, getting your EIN for free, opening a business bank account, and putting the right contracts and terms in place.
Whether you’re searching for how to legally start a business with no money, how to legally start a business from home, or you’re just looking for a starting a business checklist PDF you can actually follow — this will give you clarity.
By the end, you’ll understand the real requirements to start a business in the US and how to set it up properly from day one.
This post is all about how to legally start a business so you can operate confidently without wasting money or cutting corners.
How to Legally Start a Business: Ultimate Guide
How to Legally Start a Business from Home
1. Make Sure You’re Actually Ready to File
If you’re searching for how to legally start a business, you’re probably ready to set things up properly.
But one of the biggest mistakes I see is people forming an LLC before they’re clear on what they’re actually selling.
Before you file anything, you should be able to answer:
What exactly am I selling?
Who is it for?
How will I deliver it (1-on-1, digital product, online course, consulting, etc.)?
How will I price it?
How will I get paid?
These are business decisions — but they directly affect your legal setup.
For example, if you want to start a coaching business, have you decided whether you will:
Offer a fixed 6-week program or ongoing monthly coaching?
Start with 1-on-1 only, or also offer group coaching?
Sell digital products like eBooks or workbooks?
Launch an online course with live Q&A sessions or workshops?
Each of these requires different terms, different refund structures, and different boundaries.
If you can clearly answer these questions, you’re ready to move to the legal steps.
If you’re still figuring out what you want to do and thinking, “I want to start a business but have no ideas,” pause here. You need clarity on your offer before worrying about LLC formation or the requirements to start a business.
If you want a structured way to think through your offers first, use my Coaching Business Checklist.
It walks you through the decisions you should make for your coaching, courses, and digital products before selling — so your legal setup supports something concrete.
2. Choose a Business Name (and Buy the Domain)
Before you form your LLC, make sure the name you want is available.
I’m not saying you need to pay an expensive lawyer to trademark your brand. You don’t. It doesn’t even make sense for a lot of businesses, and it definitely doesn’t make sense when you’re just starting out. No one knows you well enough yet to start copying you.
But here’s what you do need to do at the very least:
Step 1: Check if the domain name is available
First, go to GoDaddy and search for your domain name.
Ideally, you want the .com, because people automatically type that first.
If it’s available, move on to step 2 before you buy it.
If it’s not available, that’s not your business name.
Even if it’s a completely different type of business and you wouldn’t technically be infringing on anyone’s IP, you still don’t want to share a name. You don’t want clients confusing your company with someone else’s.
Step 2: Check if the LLC name is available in your state
LLC names are registered at the state level.
So, the next step is to run a name search at your State’s level (where you want to form your LLC).
ZenBusiness makes this easy by including a business name search directly in their setup flow (we’ll walk through that in Section 4).
If the name is taken — or even too similar — go back to Step 1 and repeat the process.
Step 3: Buy the domain name
Once you’ve confirmed that:
Your .com domain is available, and
Your state LLC name search looks good,
Buy the domain immediately. Don’t wait. Secure your domain before anyone else snatches it!
3. Choose the Right Business Entity (LLC vs Sole Proprietorship vs Corporation)
When it comes to how to legally start a business, this is where people get stuck.
They start Googling the requirements to start a business and suddenly feel like they need a law degree.
You don’t.
Let’s keep this simple.
Option 1: Sole Proprietorship
If you do nothing and just start selling, you are automatically a sole proprietor.
There’s no separate legal entity. You and the business are the same.
That means:
If your business is sued, your personal assets are exposed.
There’s no legal separation between your personal and business finances.
It’s simple — but there’s no liability protection.
For very low-risk side projects, some people start here.
If you truly don’t have a dollar to your name, you’re truly desperate, and you’re trying to figure out how to start a business without money, you could start as a sole proprietor. But I don’t recommend it for most cases. It’s an unnecessary financial risk you’re taking.
If you really want to know how to legally start a business with no money, scroll down to the end of this post.
But if you’re serious about building a real business, this usually isn’t where you want to stay.
Option 2: LLC (Limited Liability Company)
This is how to start a business for beginners.
An LLC creates a separate legal entity. That means:
Your business is legally separate from you.
Your personal assets are generally protected (if you operate properly).
It’s flexible and relatively simple to maintain.
It works well for service providers, coaches, consultants, course creators, and digital product sellers.
You can legally start a business from home with an LLC. There’s no requirement to rent office space.
For most people searching for how to legally start a business, this is the right structure.
Option 3: Corporation (C-Corp or S-Corp Election)
Corporations are more complex.
They make sense if you:
Plan to raise venture capital,
Want to issue stock,
Or have a very specific tax structure in mind.
For most beginners, this is unnecessary at the start. It requires a lot of admin and is unnecessarily expensive at the beginning.
It really only makes sense when you start making some real money, and you can actually utilize the tax benefits that come with these structures.
You can always restructure later if your business grows to that level.
So, what should you choose?
If you are:
Selling services online,
Starting a coaching or consulting business,
Launching digital products or online courses,
Building a small to mid-size online business,
Don’t need capital from investors (yet),
An LLC is usually the practical choice.
It gives you the structure and protection you need without unnecessary complexity and costs.
4. Form Your LLC the Smart Way (Using ZenBusiness)
Now, it’s time to actually form your LLC.
You’re probably thinking, “Oh, this is where she tells me to hire her for business formation services.”
No, actually, I’m urging you not to hire a lawyer to set up something as simple as an LLC.
You can file directly with your state. Or you can use a formation service like ZenBusiness to simplify the process, which costs $0 + state fees.
(Yes, okay, I’m an affiliate. I earn a small commission if you use my link. But even if you don’t, you still don’t need to hire a lawyer for this.)
But, make no mistake: even though it’s easy to set up, you need to make sure you do this correctly to avoid some costly mistakes.
So, here’s exactly what to do.
Step 1: Select Your State
Choose the state where you actually live and operate.
For most people, this is their home state.
You do not need to form in Delaware or Wyoming just because someone on YouTube said so. If you’re running a normal online business, forming in your home state is usually the simplest and most practical option.
Step 2: Enter Your Business Name
ZenBusiness runs the state availability search during the setup process.
If your name is available, move forward.
If not, go back to section 2 of this post and adjust.
Step 3: Business Purpose (If Required)
Some states require you to enter a business purpose. Others don’t.
In most cases, this language is broad and generic — and that’s perfectly fine.
You do not want to narrowly describe your business.
For example, if you write “health coaching services,” and two years later you start selling digital products or hosting events, your official purpose becomes unnecessarily restrictive.
If your state requires a purpose statement, use broad language that allows flexibility.
A common example is:
“To engage in any lawful business activity for which a limited liability company may be organized in this state.”
But always follow your state’s formatting requirements.
Broad is better than specific here. If you ever end up in court, you’ll find out why.
Step 4: Choose a Registered Agent
A registered agent is simply the person or company that receives official legal mail on behalf of your LLC.
You have options:
You can act as your own registered agent (if your state allows it).
You can use ZenBusiness.
You can use another registered agent service.
If you don’t want your home address publicly listed, using a service could make sense.
But is it really worth the extra $200? I don’t think so.
If you’re comfortable using your home address publicly, acting as your own registered agent is usually fine.
Step 5: Skip What You Don’t Need
Let me be very clear:
You do not need the Pro package.
You also do not need to pay extra just to get your EIN or compliance reminders.
Formation services make money on upsells. That doesn’t mean those upsells are required.
For most beginners, the basic package ($0 + State fees) is enough.
You can:
Get your EIN directly from the IRS for free (I’ll show you in the next step).
Set your own calendar reminders for annual reports.
Manage compliance without paying an extra $200+ per year.
Don’t overcomplicate this and spend extra money you don’t need to.
Step 6: Submit and Wait for Approval
Once you’ve reviewed everything and submitted, your state will process the filing.
Processing times vary by state.
Once approved, your LLC is official!
5. Get Your EIN for Free (Directly from the IRS)
Once your LLC is approved, you need an EIN.
An EIN (Employer Identification Number) is your business’s federal tax ID.
You’ll need it to:
Open a business bank account.
Set up payment processors like Stripe or PayPal.
File taxes
If you Google it, you’ll get ads for third-party services that charge you to file for an EIN. DON’T DO THAT!
Go directly to the IRS website using this link.
Click through to the EIN Assistant and complete the application yourself.
It’s free. It literally takes about 10–15 minutes. And you receive your EIN immediately at the end of the process (make sure you write it down immediately because you can’t log in somewhere to find it).
If you’re trying to figure out how to legally start a business for free or how to start a business without money, this is where you save it.
6. Open a Business Bank Account Immediately
If you form an LLC and continue using your personal bank account, you’re defeating the purpose of forming the LLC.
One of the core requirements to start a business properly is separating your personal and business finances.
If you mix funds:
You blur the legal separation between you and your LLC.
You make bookkeeping harder.
You create problems if you’re ever audited or involved in a dispute.
Once you have your EIN (required by most banks), open a dedicated business bank account in your LLC’s name.
ZenBusiness partners with Bank of America and sometimes offers cash bonuses when you open a business account. So, you can actually earn back the money you had to spend on state fees and legal documents! So, technically, that could be how to legally start a business with no money!
7. Understand Ongoing Compliance (So Your LLC Stays Active)
Now you know how to legally start a business from home. The next step is making sure you keep it.
Most states require an annual report (sometimes called a “biennial report”, or something similar) to keep your LLC in good standing.
Some states charge an annual state fee. Some don’t. It depends on where you formed your LLC. This fee is separate from your taxes.
If you ignore the reporting requirement or the fee, your LLC can fall out of good standing or be administratively dissolved, but that’s easily avoidable and nothing to really worry about. They’ll send you a letter with sufficient time to correct that before they actually kill off your business.
You’ll also need an operating agreement. Even if your state does not require you to file one, you should have it. All it’s supposed to do is confirm ownership and define how the LLC is managed.
For a single-member LLC, this does not need to be complicated. Many states provide a simple free template, and I would not recommend buying one. You’ll sign it, put it in your drawer, and forget about it.
So, all you need to do is take the following steps:
Look up your state’s filing requirements.
Confirm whether there is an annual or biennial report.
Check if there is a fee.
Put the deadline in your calendar.
Set a reminder 30 days before it’s due.
And you do not need a $200 compliance package to manage it.
8. Put the Right Contracts and Terms in Place
An LLC can protect your personal assets in case of liability, but...
It does not prevent clients from asking for their money back.
It does not stop someone from claiming they “didn’t know” what was included.
And it does not stop you from losing revenue because you never defined the rules.
Without proper terms, you can end up dealing with situations like:
A client demanding a full refund after completing 80% of your program.
Someone disputing a payment with their bank because they claim they “didn’t understand” what they were buying.
A coaching client expecting unlimited access because you never defined session limits.
A course student asking for a refund after downloading all materials.
A no-show insisting they’re entitled to reschedule for free.
If you’re selling services, digital products, or courses, you need written terms that clearly set out:
What the client is getting
What they are not getting
How payments work
If and under what conditions refunds are available
What happens in case of cancellations or no-shows
And what you are not responsible or liable for
The right contract for your business and niche handles this for you.
If you’re offering:
1-on-1 coaching → you need a proper 1-on-1 Coaching Contract that’s fully customizable to your niche.
Digital products → you need clear Terms and Conditions tailored to the type of content you sell.
An online course → you need Online Course Terms and Conditions with customizable disclaimers based on what you teach.
Subscribe to my newsletter and get instant access to my free Coaching Business Checklist — the ultimate checklist for structuring your coaching services, digital products, and online courses before you sell.
It walks you through the key decisions you need to make.
Once those decisions are made, your contracts simply formalize them.
Starting a business in a different niche?
👉 You can find the right contract template for your business in my Contract Shop.
9. Launch Your Website (or Landing Page) the Legal Way
This is the final part of how to legally start a business for beginners.
Whether you have a full blog or just one simple landing page for your digital products, you need proper legal pages on your site.
At a minimum, you’ll need:
A Privacy Policy, which is required by law (yes — even if you just have one landing page).
Website Terms and Conditions, which protect your content and other intellectual property.
A Disclaimer Page, with proper disclaimers (depending on what you sell and teach) that protect you against liability.
Copy-pasting a random template from Google is not a solution.
Your legal pages need to reflect:
Your niche and content
What you sell
How you collect data
What you promise
What you don’t promise
That’s exactly why I created my Legal Website Bundle, which includes all three essential legal pages, fully customizable to your business and niche.
So your website is structured correctly from day one.
That’s How To Start a Business for Beginners
So, now you know how to legally start a business. You’ve learned that:
You don’t need a lawyer to file your LLC.
You don’t need expensive formation packages.
And you don’t need to overcomplicate compliance.
All you need to do is:
Choose the right entity,
Keep your finances separate,
Stay compliant, and
Put the right contracts and legal pages in place,
If you want to make sure you don’t miss any important decisions before selling, download my free Coaching Business Checklist.
And when you’re ready to formalize those decisions, you’ll find the right contract templates and bundles in my Contract Shop — fully customizable to your business and niche.
How to Legally Start a Business with No Money (If You Really Don’t Have Any)
Now you know how to legally start a business.
But what if you truly don’t have a dollar to your name?
What if you can’t even cover the state filing fee for your LLC?
If you genuinely don’t have any cash, and you want to know how to start a business without money, I’ve got you covered.
I really don’t recommend starting a business without an LLC and a proper contract, but if that’s really not an option...
Read this blog post in which I break down exactly how to start a business without money online.
This post was all about how to legally start a business in 9 simple steps without wasting money.
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