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How to Start an LLC with a Felony: The Complete 2026 Guide to Business Registration and EIN

This guide is published by Felon Friendly Jobs Now (FelonFriendlyJobsNow.com), a resource platform serving the 70+ million Americans navigating life with a criminal record.

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We've helped thousands of justice-impacted entrepreneurs understand business formation. This guide reflects that experience—verified fees, real processes, no made-up information.

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Building a legal foundation is the most critical step in moving from a "side hustle" to a legitimate company. And here's what most people don't know:

 

No state requires a background check to form an LLC. None.

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Your criminal record does not appear on LLC applications. The IRS does not run background checks for EINs. The path to legal business ownership is open—this guide shows you exactly how to walk it.

🚀 LLC + EIN QUICK START

Here's the fast track to legal business formation:

1. Check your business name (use state search tool — see directory below)

2. File Articles of Organization (with your Secretary of State — $35 to $500)

3. Get your EIN (FREE at IRS.gov — 15 minutes, instant approval)

4. Open a business bank account (see our Banking Hub)

Total time: 1-2 hours of work + state processing (instant to 2 weeks depending on state).

Why an LLC Matters for Second-Chance Entrepreneurs

An LLC (Limited Liability Company) is a legal "shield" that separates you from your business. For someone with a record, this protection is especially important.

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What an LLC Protects

  • Personal assets: If your business is sued or can't pay debts, your personal property (car, home, savings) is protected.

  • Privacy: With a registered agent service, your home address stays off public business records.

  • Credibility: Clients and partners take "ABC Services LLC" more seriously than an individual name.

  • Banking access: A business bank account requires a registered business. This separates your finances and builds business credit.

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What we see working: For justice-impacted entrepreneurs, the privacy benefit alone is worth the filing fee. Using a registered agent keeps your personal address out of public databases that anyone can search.

Step-by-Step: How to Form Your LLC

Step 1: Choose Your State

Most people file in the state where they live and operate. This is the most straightforward approach for taxes, licensing, and compliance.

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Step 2: Name Your Business

Your business name must be unique in your state. Requirements:

  • Must include "LLC" or "Limited Liability Company" in the name

  • Must be distinguishable from existing businesses in your state

  • Action: Use your state's Business Name Search tool (see directory below) to check availability before filing

 

Step 3: Appoint a Registered Agent

A registered agent receives legal documents on behalf of your business. This can be you, or a professional service.

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The Privacy Strategy: If you don't want your home address on public record (where anyone can look it up), hire a Professional Registered Agent Service (typically $50–$150/year). They provide a professional address for all your filings.

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Step 4: File Articles of Organization

This is the official document that creates your LLC. File it with your Secretary of State.

  • Cost: Filing fees vary by state—from $35 (Montana) to $500 (Massachusetts). See complete directory below.

  • Processing time: Instant to 2 weeks depending on state and filing method.

  • Pro tip: Most states offer a discount for filing online. Use the official state portal—avoid "middleman" websites that charge extra.

 

Step 5: Create an Operating Agreement

Even if you're the only owner, create this document outlining how your business is run. Many banks require it to open a business account. Templates are available free online.

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⚠️ Important: Filing fees change periodically. Always verify current fees on your state's official Secretary of State website before filing. The fees in this guide are accurate as of 2026.

Getting Your EIN (Employer Identification Number)

Think of an EIN as a Social Security Number for your business. It allows you to hire employees, pay taxes, and—most importantly—open a business bank account without using your personal SSN.

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Key Facts About EINs

  • It's FREE: Never pay a website to get an EIN. The official application is at IRS.gov.

  • No background check: The IRS does not run criminal background checks for EIN applications.

  • Timing: Apply AFTER your LLC has been approved by the state.

  • "Responsible Party": The IRS will ask for this—it's you. You'll need your SSN or ITIN to apply.

 

How to Apply for Your EIN Online

  1. Go to IRS.gov and search for "Apply for an EIN Online"

  2. Select "Limited Liability Company" as your business structure

  3. Choose "Started a new business" as your reason for applying

  4. Enter your information exactly as it appears on your Social Security card

  5. Download your confirmation immediately — the CP 575 letter is required for banking

 

⏰ Important: The IRS online EIN application is only available Monday–Friday, 7:00 AM to 10:00 PM Eastern Time. Weekend attempts will fail.

 

What we see working: Apply online during weekday business hours. The entire process takes about 15 minutes, and you receive your 9-digit EIN immediately. Download and save the confirmation letter right away—you'll need it for the bank.

📌 Got Your LLC and EIN? Next Step: Banking

Once you have your LLC documents and EIN, you're ready to open a business bank account. Our Banking Hub shows you which banks work for justice-impacted entrepreneurs.

→ [Link: Open the Banking Resources Hub]

LLC vs. Sole Proprietorship: Which Is Right for You?

Many people start as a Sole Proprietor because it's free. But for second-chance entrepreneurs, the LLC is usually better for long-term safety.

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Our recommendation: For most second-chance entrepreneurs, the LLC is worth the filing fee. The liability protection and privacy benefits outweigh the cost, especially as your business grows.

Keeping Your LLC Active: The "Paper Trail" Checklist

Setting up your LLC is only half the battle. To keep your personal assets protected (the "corporate veil"), you must avoid mixing personal and business money.

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Avoid "Piercing the Corporate Veil"

  • Separate bank account: Once you have your EIN and LLC papers, open a business account immediately. Never pay for personal groceries with your business card.

  • Keep records: Save every receipt and invoice. Use QuickBooks, Wave (free), or even a dedicated Google Drive folder.

  • Operating Agreement: Keep it on file. Banks often won't let you withdraw money without it.

  • Annual Reports: Most states require a simple form every 1-2 years to keep your LLC active.

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Ongoing Compliance Requirements

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💡 BOI Reporting: A federal requirement. Most LLCs must file a Beneficial Ownership Information report with FinCEN (Financial Crimes Enforcement Network). This is a one-time filing unless ownership changes. File at fincen.gov/boi.

2026 State-by-State LLC Filing Directory

Below is the complete directory of LLC filing costs for all 50 states, D.C., and Puerto Rico. Use the name search column to verify your business name is available before filing.

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Pro tip: Always check "Online" vs. "Mail-in" pricing. Most states offer a discount for filing digitally through the official portals. Avoid third-party sites that charge extra fees.

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⚠️ Publication Requirement: Arizona, Nebraska, and New York require you to publish a notice in a local newspaper after forming your LLC. This adds $100–$500 to the total cost.

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States A–M

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States M–W + D.C. + Puerto Rico

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📌 Find More Resources in Your State

Our state-by-state guides cover employment laws, felon-friendly employers, licensing, and local programs specific to where you live.

→ [Link: Browse State Employment Guides]

Troubleshooting: Common LLC and EIN Rejections

Filing paperwork can be intimidating, and many applications are rejected for simple, fixable errors. A rejection isn't a "No"—it's just a request for correction.

 

LLC Filing Rejections (Secretary of State)

Error: "Name is not distinguishable" or "Deceptively Similar"

  • Problem: Your name is too close to an existing business. (e.g., "Clean Slate Landscaping" but "Clean Slate Landscapes LLC" already exists)

  • Fix: Change your name. Add a unique word or geographic location: "Clean Slate Landscaping of [Your City]" or "Clean Slate Professional Greenery."

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Error: "Invalid Registered Agent Address"

  • Problem: You listed a P.O. Box or an address outside the state where you're filing.

  • Fix: A Registered Agent must have a physical street address within the state. Hire a professional Registered Agent Service if needed.

 

Error: "Missing Entity Identifier"

  • Problem: You wrote "Clean Slate" instead of "Clean Slate LLC."

  • Fix: Every document must include the designator (LLC, L.L.C., or Limited Liability Company). Review and ensure "LLC" appears in every instance of the name.

 

EIN Application Errors (IRS Reference Numbers)

Reference Number 101: "Name Conflict"

  • Meaning: The IRS found a similar business name somewhere else in the country. Their system is national, not state-based.

  • Fix: You cannot fix this online. Apply using Form SS-4 via fax or mail. Include a copy of your approved state LLC documents to prove you have the legal right to the name.

 

Reference Number 102: "SSN/TIN Mismatch"

  • Meaning: The name you entered for the "Responsible Party" doesn't match IRS records for that Social Security Number.

  • Fix: Use your legal name exactly as it appears on your Social Security card (including middle initials). Check for typos. Wait 24 hours before trying again.

 

Reference Number 109: "Technical Difficulty"

  • Meaning: The IRS website is overwhelmed or down.

  • Fix: Clear your browser cache or try Chrome. Remember: The EIN system is only open Monday–Friday, 7 AM to 10 PM Eastern. Weekend attempts will fail.

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How to File an Amendment

Already filed but made a mistake (like misspelling your name)?

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6. Don't start a new LLC. This wastes money.

7. File "Articles of Amendment." Most states have a simple one-page form to correct errors on your original filing.

8. Update the IRS if needed. For EIN errors, send a letter to the IRS explaining the correction.

Business Team Discussion

How to Start an LLC with a Felony: The Complete 2026 Guide to Business Registration and EIN

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The Path Forward

Forming an LLC and getting an EIN are the foundational steps to legitimate business ownership. They're also steps where your criminal record simply doesn't matter.

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No background check on the LLC application. No criminal history question for the EIN. The path is open.

Take it step by step: check your name availability, file your Articles of Organization, get your EIN, open your business bank account. Within a few weeks, you can have a legally registered business.

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The paperwork is simpler than it looks. The opportunity is real. Now it's about doing it.

Continue Your Journey

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