How to Start an LLC for Government Contracting: From State Filing to SAM.gov

How to start an LLC: the steps and what you need

Forming an LLC is mostly paperwork, and nearly all of it can be done online. The order matters because each step feeds the next: the state filing creates your legal name, the EIN ties that name to a taxpayer ID, and SAM.gov checks both before it will let you bid.

1. Choose a formation state and a name that’s available there.
2. Appoint a registered agent with a street address in that state.
3. File articles of organization with the state.
4. Sign an operating agreement that sets out ownership and control.
5. Get an EIN from the IRS.
6. Open a business bank account and register for state taxes and licenses.
7. Register in SAM.gov, choose NAICS codes and apply for any certifications you qualify for.
8. File annual reports and renew SAM.gov every year so both stay active.

What you need and where you get it

Step 1: Choose your state and your LLC name

For most small businesses, the right state to form an LLC in is the one where you live and work. Forming somewhere else (Delaware and Wyoming get a lot of attention online) usually means registering as a “foreign” LLC in your home state too, which doubles your filings, fees and registered agents.

Take a two-person HVAC company in Columbus. Formed in Ohio, it files once and reports once. Formed in Delaware, it still has to register in Ohio to work there, and every annual report and agent fee comes in pairs. The same question comes up later if federal work puts your employees or an office in another state.

Pick a name that will survive SAM.gov

• Include the designator. States generally require “LLC,” “L.L.C.” or “Limited Liability Company” in the name.
• Check availability. Search your secretary of state’s business database; your name has to be distinguishable from companies already on file. A quick trademark search is worth doing too.
• Choose one exact spelling and never vary it. “Summit Air LLC” and “Summit Air, LLC” are different strings to a computer. Whatever appears on your state filing should appear character for character on your EIN application, bank account and SAM.gov registration.
• Use a DBA for branding. A trade name (“doing business as”) lets you market under a shorter name. Your legal name stays the same on every official record.

Step 2: Appoint a registered agent

A registered agent accepts lawsuits, subpoenas and official state mail on your LLC’s behalf. Every state requires one, and the agent must be located in the state where you register, generally at a street address where someone is available during normal business hours. Some states use a different term; Massachusetts, for example, calls it a resident agent.

You can be your own registered agent if you have an address in the state, or you can pay a commercial registered agent service. The agent’s name and address become public record, which is why many owners who work from home choose a service.

Step 3: File your articles of organization

The articles of organization are the filing that actually creates your LLC. The form is short: the LLC’s name and address, the registered agent, whether members or managers run it, and the organizer’s signature. Some states call it a certificate of formation or a certificate of organization, but it’s the same step.

Many states let you file online through the secretary of state’s website, and online filings usually move faster than paper. Once the state approves it, save the stamped articles or certificate as a PDF. Your bank, SBA and prime contractors may ask for it.

How much LLC filing costs

The state sets the fee, and it varies widely. SBA says the total cost to register a business is under $300 in most cases, but some states charge more. As of October 2026, Kentucky lists $40 for LLC articles of organization, while Massachusetts lists $500 for an LLC certificate of organization. Fees change, so check your state’s current fee schedule before you file.

Watch for state-specific extras. New York, for example, requires most new LLCs to publish a notice in two newspapers within 120 days of formation and file proof with the state; skip it and the LLC’s authority to do business is suspended. Your state’s LLC page will list requirements like this.

Member-managed or manager-managed?

Member-managed means the owners run the business directly, which fits most small firms. Manager-managed means designated managers run it, which is common when some owners are passive investors. If you plan to apply for a woman-owned or veteran-owned certification, the qualifying owner has to hold real control, so choose with that in mind.

Step 4: Write an operating agreement

An operating agreement is the internal contract among the owners: who owns what share, who makes which decisions, how profits are split, and what happens if someone leaves, sells or dies. It generally isn’t filed with the state, and many states don’t require one, but you want one even as a single-member LLC.

For a company that plans to win government contracts, it does extra work:

• Certifications read it closely. SBA’s women-owned and veteran-owned programs require qualifying owners to directly and unconditionally own at least 51% of each class of member interest, and to control the company. A clause giving a minority owner a veto over ordinary business decisions can sink an application.
• Banks ask for it. Banks commonly want to see ownership agreements before they open a business account.
• It settles who can sign. Name who may sign bids, contracts and certifications for the LLC. The person certifying your SAM.gov representations should actually have that authority.

A template is a fine start. If you have co-owners or plan to apply for certifications, have an attorney review it.

Step 5: Get an EIN for your LLC (it’s free)

An Employer Identification Number (EIN) is your LLC’s federal tax ID. Multi-member LLCs and any LLC with employees need one. A single-member LLC without employees can sometimes use the owner’s Social Security number for income tax, but get an EIN anyway: banks ask for it, you’ll put it on W-9s instead of your SSN, and SAM.gov matches your registration against the name and number the IRS has on file.

How to apply

• Apply directly on IRS.gov. The online application is free and issues the number immediately once approved.
• Mind the hours. The online tool runs Monday through Friday from 6 a.m. to 1 a.m., Saturday from 6 a.m. to 9 p.m., and Sunday from 6 p.m. to midnight, Eastern time.
• Have the responsible party ready. The applicant must be the LLC’s responsible party or an authorized representative, with that person’s SSN or ITIN. The IRS issues only one EIN per responsible party per day.
• Finish in one sitting. You can’t save your progress, and the session expires after 15 minutes of inactivity.
• Copy the legal name exactly. Enter the name as it appears on your articles of organization, then download and keep the EIN confirmation letter.

Wait about two weeks before SAM.gov

A new EIN works right away for most purposes, but the IRS’s own procedures say it takes roughly two weeks to post to IRS records for name/TIN matching. Until it posts, SAM.gov’s taxpayer check will fail. Use that window to open your bank account and gather your registration details.

Tax classification and the S corp question

By default, the IRS treats a single-member LLC as a disregarded entity (income goes on the owner’s return) and a multi-member LLC as a partnership. An LLC can elect to be taxed as a corporation on Form 8832 or as an S corporation on Form 2553. An S corp election can trim self-employment tax for a profitable business, but you must then pay yourself a reasonable salary through payroll. It’s a tax decision, not a contracting one, so run the numbers with a CPA.

What about FinCEN beneficial ownership reports?

Older advice says every new LLC must file a beneficial ownership information (BOI) report with FinCEN. That changed: under a final rule effective August 14, 2026, companies created in the U.S. and their U.S. owners are exempt. Reporting now applies only to certain foreign companies registered to do business in a state. Be skeptical of anyone charging to file a BOI report for a U.S.-formed LLC.

Step 6: Open a bank account and register for state taxes and licenses

Open a business checking account in the LLC’s exact legal name once you have the EIN. Banks commonly ask for the EIN, your formation documents, your operating agreement and any business license. Run all business money through it; mixing personal and business funds can weaken the liability protection the LLC gives you. SAM.gov will also ask for this account so agencies can pay you electronically.

State and local registrations

• State tax accounts. Depending on what you sell and whether you hire, you may need to register for sales tax, employer withholding and unemployment insurance.
• Licenses and permits. Trades like HVAC, electrical and plumbing usually need state or local licenses, and many cities and counties require a general business license. Licensing follows the work, so check what applies before you bid on a job in another state or city.
• Insurance. General liability, workers’ compensation once you have employees, and professional liability for consulting work. Contracts and subcontracts often set minimum coverage, so get quotes early.

Step 7: Register your LLC in SAM.gov

SAM.gov, the System for Award Management, is where you register to do business with the federal government. A full registration is what lets you bid on federal contracts, and it assigns your Unique Entity ID (UEI), the 12-character identifier agencies use for your company. Registration is free.

What SAM.gov checks

• Legal business name and physical address. SAM.gov validates both against outside records before it issues your UEI. Use the exact name from your articles of organization and a street address; a P.O. box isn’t accepted as a physical address.
• Taxpayer ID and taxpayer name. You sign a consent that lets the IRS match your EIN and taxpayer name against its records. This is why you copied the name exactly when you applied for the EIN.
• State and date of formation. SAM.gov asks for your state and date of incorporation; for an LLC, use the state and date on your approved articles.
• Everything else. Bank details for electronic payment, points of contact, NAICS codes, size information, and representations and certifications about your company.

Allow at least ten business days after you submit for the registration to go active. If the taxpayer check fails, SAM.gov emails your government business point of contact with instructions, and you may need to fix your record with the IRS before resubmitting. Once active, the registration must be renewed every 365 days. For a screen-by-screen walkthrough, see the SAM.gov registration guide.

Step 8: Set up NAICS codes, size status and certifications

In SAM.gov you list NAICS codes, the six-digit industry codes that describe what you do. Choose a primary code for your main line of work and add others only for work you can actually perform. The HVAC company might lead with 238220 (plumbing, heating and air-conditioning contractors); a solo IT consultant might lead with 541512 (computer systems design services). The NAICS codes guide covers how to choose.

SBA assigns each NAICS code a size standard, measured in average annual receipts or employees, and your size includes your affiliates. Forming a second LLC doesn’t make you smaller if the same people control both companies. If you’re under the standard, you can compete for small business set-asides.

Certifications open more doors: women-owned (WOSB and EDWOSB), veteran-owned (VetCert), HUBZone and 8(a). You apply through MySBA Certifications at no cost, and SBA reviews your formation documents and operating agreement to confirm who owns and controls the company. The women-owned, veteran-owned and 8(a) programs all start from at least 51% ownership and control by the qualifying owners. See SBA certifications for government contracting for each program’s rules.

Step 9: Stay in good standing and keep your records consistent

Forming the LLC is a one-time filing; keeping it active is a recurring one. Most states require an annual or biennial report that confirms your address, agent and managers, and some add a yearly fee or franchise tax. Kentucky, for example, charges $15 for an LLC annual report due by June 30, and administratively dissolves LLCs that miss the deadline.

A dissolved LLC is a problem when a bank, a prime contractor or SBA asks for proof that you’re in good standing. Put your state report deadline on the calendar next to your SAM.gov renewal date.

One name, one EIN, one address, everywhere

The habit that saves the most trouble is using the same legal name, EIN and physical address on every record: state, IRS, bank, SAM.gov, SBA, invoices and proposals. When something changes, update in this order:

1. The state. Amend your articles for a name change or file an update for a new address or agent.
2. The IRS. Use Form 8822-B for a new address or responsible party (responsible party changes are due within 60 days). Report a name change by letter or on your next return.
3. SAM.gov. Update your registration right away; you don’t have to wait for the annual renewal.
4. Everyone else. SBA certifications, your bank, insurers and any primes you work with.

Once your registration is active, the work shifts to finding the right opportunities. You can search SAM.gov yourself, or use a tool like BidForge to match new SAM.gov notices to your NAICS codes and capabilities. The guide to finding government contracts covers both, and free government contracting help lists the APEX Accelerators, SBDCs and SCORE mentors who can review your setup at no cost.

Frequently asked questions