Do these four steps in this order. Doing them out of order is what creates the rework.
The sequence
- Form your entity. File Articles of Organization with your Secretary of State.
- Get your EIN. Go directly to IRS.gov and apply. It's free and takes about 5 minutes online. You need this before almost anything else, banking, hiring, taxes.
- Open the business bank account. Do this once your EIN is in hand.
- Pull your city or county licenses. Typical cost runs $50 to $300 depending on your location and business type.
Most first-time owners try to open the bank account or start hiring before they have the EIN in hand. That's the step that forces you to redo the earlier ones.
The 5-document bank checklist
Bring these to open your business account, and call the branch ahead of time to confirm what they need:
- EIN confirmation letter (the one the IRS emails or mails you)
- Backup: the 147C letter, which is the IRS's official EIN verification letter if you've lost your original confirmation
- Articles of Organization
- Operating Agreement (for an LLC)
- Business license or permits, plus a valid personal ID with your SSN, date of birth, and home address
Calling ahead to confirm the bank's exact list before you go saves you a wasted trip.
Your launch check-off
Tick each step as you finish it. This list saves in your browser, so you can come back mid-launch.
Why commingling funds is a legal problem, not just a messy one
Mixing your personal and business money is one of the fastest ways to "pierce the corporate veil." Here's what that means in plain language: your LLC exists to separate your personal assets (your house, your savings, your car) from your business's liabilities. If you mix funds, a court can decide that separation was never real, and go after your personal assets to cover a business debt or lawsuit.
The LLC paperwork alone doesn't protect you. A separate bank account, kept genuinely separate, is what makes the protection hold up.
Once the paperwork is done, the harder question is what to do in your first 90 days. The Scale Plan turns your answers into a personalized growth plan, and the free pricing calculator on worksmartadvisor.com covers your first pricing decision.
FAQ
What comes first, the LLC or the EIN?
The entity comes first. File Articles of Organization with your Secretary of State, then apply for the EIN at IRS.gov. The IRS application asks for your entity information, so doing it backwards means redoing it.
How much does an EIN cost?
Nothing. Applying directly at IRS.gov is free and takes about 5 minutes online. Third-party sites that charge for an EIN are charging you for a form you can file yourself.
What documents does a bank need to open a business account?
Commonly five things: your EIN confirmation letter (or the 147C backup letter), Articles of Organization, an Operating Agreement for an LLC, any business license or permits, and a valid personal ID. Call the branch ahead to confirm their exact list.
Can I use my personal bank account for my business at the start?
You can, and it's the mistake that costs the most later. Commingling funds can pierce the corporate veil, which means a court can treat your LLC's protection as never real and reach your personal assets. Open the separate account as soon as the EIN arrives.
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