Use cases

An LLC, by what you actually do

I want to hold a rental property, work as a freelancer, or sell online, and I need to know whether an LLC fits that work, where to form it, and what to check first. Start here. Each guide below answers that question for one use case, in the order the decisions arrive, with the official source behind each rule.

Short answer

Form in the state where the business physically operates, in the company name you will contract, invoice, and bank under. An LLC separates the business from the owner in most instances. It does not, by itself, change the default tax treatment for a one owner business, replace a license or an insurance policy, or settle sales tax duties for a seller. The three guides below show where each of those lines falls for your use case.

Real estate investing LLC for real estate investing One company or one per property, forming in the property state, and the lender, insurer, and title checks to run before title moves. Includes the default tax reporting for rent by member count. First check: Price every company over five years in the property state. Read the guide Freelancers and consultants LLC for freelancers and consultants What formation changes for a solo practice and what it does not: contracts and banking in the company name, the EIN, the disregarded tax default on Schedule C, and licenses that stay with the person. First check: Accept the five year recurring total before you file. Read the guide E-commerce sellers LLC for e-commerce sellers Where to form when customers are everywhere, why sales tax is a separate system from formation, and how to keep marketplace, payment, and bank accounts in one exact legal name. First check: List every state where inventory, people, or premises are. Read the guide

The three use cases, side by side

The formation filing is the same. Almost everything around it differs. Use this table to find your row, then read the full guide for that row before you file. Click a column heading to sort.

Decision	Real estate investing	Freelancer or consultant	E-commerce seller
Where to form	The state where the property sits	The state where you work	The state where you work and hold inventory
Second registration risk	Forming elsewhere adds a foreign registration in the property state	Working regularly in another state can add one	Inventory, employees, or premises in another state can add one per state
Default tax picture	One owner: disregarded, rent generally on Schedule E. Two or more owners: partnership by default	One owner: disregarded, business activity generally on Schedule C, self employment tax as a sole proprietor	Follows member count, like the other columns. Sales tax is a separate system and is not settled by formation
First document after formation	Operating agreement with capital call and buyout points, plus leases in the company name	Client contract template in the company name, plus the company W-9	Marketplace and payment accounts in the exact legal name, plus the EIN letter
What the LLC does not do	Does not remove a personal guarantee, and does not replace landlord insurance	Does not lower tax by itself, and does not replace a professional license or liability insurance	Does not create or remove a sales tax duty, and does not settle product or platform rules
Recurring trap	Missing one report among several property companies	Mixing personal and company money after formation	Letting inventory move to a new state without updating registrations

Tax rows state the federal defaults described by the IRS for LLC classification. Elections can change them. See the sources in each guide, checked October 16, 2026.

Not sure which row is yours?

Use the physical test. Where is the property, where do you do the work, and where does inventory or a person sit? That state is your starting state in every row. Run its five year total in the calculator, then read the guide for your use case with that total in hand.

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Legal information, not legal advice.

These guides state general rules and the checks to run. They do not decide liability, tax treatment, or licensing for a specific property, practice, or store. Confirm the current fee and deadline with the filing office before you pay.

Read the disclaimer

Already formed? The post-formation checklist collects the recurring duties for any use case. Still choosing a structure? Read LLC vs. sole proprietorship and LLC vs. S corporation tax treatment first.