Auto and business services · LLC guide · updated
How to start an LLC for a staffing agency
Staffing agencies employ workers and place them with clients, which makes the agency responsible for payroll taxes, workers' comp and often joint liability with the client. An LLC is the employer of record and holds the client agreements, separate from your personal assets.
Our registered agent is optional: $74.25 a year, the same at renewal. Questions first? Ray or Vinny picks up at (954) 470-8356.
- EIN
- Payroll accounts
- I-9 and E-Verify
- Workers' comp
- Client staffing agreements
Staffing Agency businesses in the U.S.
Source: U.S. Census Bureau, County Business Patterns 2022 (NAICS 561320), the latest U.S. totals.
Why staffing agency owners form an LLC
Worker injuries
Workers' comp for placed workers is the agency's.
Joint employer claims
Wage, discrimination and safety claims can name both the agency and client.
Payroll cash flow
You pay workers before clients pay you.
An LLC keeps the company's debts and claims away from your personal assets when you run it as its own business: its own bank account, contracts signed in its name, and no mixing of money. It does not cover your own negligence, and lenders often ask for a personal guarantee. Insurance comes first.
Licenses and registrations for a staffing agency
Federal items link to the agency's own page. State and local rules vary, so pick your state at the top for your state's business portal. Tick items off as you go; the list remembers your progress on this device.
- We do thisForm the LLC and get its EINAlmost every registration above asks for the company's legal name and EIN, so this comes first. We file the LLC with your state for $123.75 plus the state fee, and can get the EIN for $41.25; the IRS also issues it free online.
Insurance and taxes to plan for
Insurance
- Workers' compensation
Your largest insurance cost.
- Employment practices liability
Covers discrimination and harassment claims.
- General and professional liability
Covers client claims.
Taxes
- Trust fund taxes
Never use withheld payroll taxes for operating costs; owners can be personally liable.
- Factoring
Many agencies factor invoices to cover payroll; factoring agreements belong to the LLC.
Staffing agreements should say who trains, supervises and provides safety equipment at the client's site. OSHA treats agencies and clients as sharing responsibility.
Forming the LLC itself: 7 steps in every state
- 1. Check the name
- 2. Name a registered agent
- 3. File with the state
- 4. Sign an operating agreement
- 5. Get an EIN
- 6. Open a bank account
- 7. Keep it in good standing
The filing office, fee and yearly report change by state. Open your state's step-by-step guide.
What it costs to form a staffing agency LLC
| Cost | File it yourself | With Vermilion Vitez |
|---|---|---|
| State filing fee (paid to the state) | $35 to $520 | $35 to $520 |
| Filing service, operating agreement included | $0 | $123.75 |
| EIN from the IRS | $0 | $0 yourself, or $41.25 if we get it |
| Registered agent, per year (optional) | $0 if you serve yourself | $74.25 |
State fees as charged at our checkout. Industry licenses, permits, bonds and insurance above are separate and set by each agency. Checkout shows the card processing fee before you pay.
Frequently asked questions
Do I need a license to start a staffing agency?
Some states license employment agencies; others only require normal business and payroll registrations.
Is the agency or the client the employer?
The agency is usually the employer of record, but both can be joint employers for some claims.
Does an LLC protect me from unpaid payroll taxes?
Not fully. The IRS can hold owners personally liable for unpaid withheld payroll taxes.
What insurance does a staffing agency need?
Workers' comp, employment practices liability and general liability.
How much does it cost to form an LLC for a staffing agency?
Your state's filing fee ($35 to $520 depending on the state) plus $123.75 if we file it, with the operating agreement included. Industry licenses, bonds and insurance are extra and set by each agency.
Is this page legal or tax advice for my staffing agency?
No. It summarizes public rules in general terms, with links to the agencies that set them. For your situation, talk to a licensed attorney or CPA, or book a free call with us.
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Ready when you are
Have us file your Staffing Agency LLC
$123.75 plus your state's filing fee, with the operating agreement included. Checkout shows the full total, card processing fee and all, before you pay.
Rather talk first? Call Ray or Vinny at (954) 470-8356.