How Much Does an LLC Cost? (Filing Fees Explained)

Delina Chantel Yasmeh
Published by Delina Chantel Yasmeh | Author
Last updated: February 5, 2024
Methodology
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Determining the LLC startup costs can be challenging. How much you will have to pay for your LLC depends on the state that you are in and what type of business entity you want to set up.

As a Mergers and Acquisitions specialist and degree holder in tax law, I recognized the need for clarity on LLC expenses.

After extensive research and consultations with legal experts in the state, I have compiled a comprehensive article on LLC formation costs to provide an understanding of the fees involved.

Quick Summary

  • The cost of starting an LLC can range from a few hundred to a few thousand dollars, which covers the filing fee for the Articles of Organization. The actual amount is determined by the specific state in which you start your business.
  • Once the LLC has been approved, additional expenses include a registered agent service, annual or biennial filing costs, permits and licenses, taxes, and other documents.
  • The average initial cost of forming an LLC across all states is about $200.
  • After having formed LLCs across most states, I find it a sound business practice to remain legally compliant to qualify for a Certificate of Good Standing. I also emphasize the importance of keeping certified copies of all documents for record and legal purposes.


Cost to Start an LLC

Before a business can legally operate, there are mandatory fees and optional expenses that should be covered. These include the following:

1. Formation Filing Fee ($35 - $500 - Mandatory)

US cash money of US Flag

LLC filing fees are paid to file LLC Articles of Organization with the Secretary of State. The cost varies by state but typically ranges between $35 and $500, depending on the location.

The cheapest state fees are in New Mexico, Arkansas, Iowa, Michigan, Indiana, Arizona, Colorado, and Hawaii ($50). The most expensive LLC filing fees are in Tennessee, Alaska, New York, Massachusetts, Washington, and Florida ($250-$500).

On the contrary, based on the LLCs that I helped form, Colorado, Montana, and Kentucky are among the states that collect the least amount of fees.

Before I advise my clients to opt for expedited processing, I tell them to take note of the difference against standard approval time.

2. Registered Agent Service ($80 - $300 - Optional)

man in formal wearing with his thumbs up

All the states require LLCs to appoint a registered agent to receive service of process on the company's behalf.

Registered Agent fees depend on the location and the services you need, so it's best to contact them directly before signing up to find out how their pricing works.

You can expect to pay anywhere between $80 to $300 for the registered agent service.

Keep in mind that you or LLC members can also act as registered agents so you can avoid this cost altogether.

However, if you have no experience in these legal matters, a professional, LLC registered agent is always the best option to provide legal or tax advice.

3. Name Reservation ($10 - $25 - Optional)

The service is offered in all states and the fee ranges between $10 to $25. The state agency will reserve the name for your company from 60 to 120 days, depending on the state.

Before filing, I make it a point to verify if the name is available through the Business Search Portal in order to avoid delays and complications.

Expenses Following the Approval of Your LLC

A man preparing the documents about the cost of an llc

Forming an LLC entails essential fees and costs. These expenses are vital for establishing a legally recognized business structure. These charges include:

1. Permits and Licenses (Depending on Line of Business - Mandatory)

person stamping papers

Certain industries require additional business licenses and permits, and their costs vary from state to state. Although some states don't require a special business license, you must check with the State Board.

The main factors that determine if a company needs a license or permit to operate include the type of business as well as the location of the entity. Having helped form LLCs across the states, the main line of businesses that require permits include alcohol, lodging, transportation, and tobacco to name a few.

Licenses are required for LLCs that provide professional services such as contractors, medical practitioners, engineers, plumbing and the like [1].

2. Annual or Biennial Report ($15 - $500 - Mandatory)

man using a calculator while reading expenses

Annual or biennial filing fees depend on the state where your LLC is located.

These fees are typically paid to state agencies such as the Secretary of State or the Department of Commerce. Filing it as timely as possible will help keep your LLC in Good Standing and maintain its liability protection.

The states that do not require an annual fee include:

  • Idaho
  • Minnesota 
  • Missouri
  • New Mexico
  • South Carolina
  • Texas

3. Taxes (Depending on Income Bracket- Mandatory)

An LLC is the preferred structure of most business owners due to pass-through taxation, the company itself is not subject to taxes and the members simply have to file their individual returns.

The taxes due are proportional to the annual generated income of the company and is subject to penalties if paid or applied late.

office people in a meeting

An LLC operating agreement should contain all the rules that govern the day-to-day operations, member responsibilities (such as managing finances), how profits are distributed, and the process for making decisions.

If you are not confident drafting an operating agreement, you can download templates online for $100 to $200 or hire a lawyer to draft one for you.

For clients who have budget to spare, I advise them to employ a legal professional to ensure the document's legality.

The EIN is issued by the Internal Revenue Service (IRS) for free, primarily for tax purposes.

When forming an LLC, I make it a priority to obtain an EIN since it is necessary to open a business bank account, obtain loans, and hire employees in the future.

6. Other Documents (Cost Depends on the Needs and Preferences - Optional)

Once the LLC is operational, I oversee that each company is compliant with the requirements of the state.

This qualifies the limited liability company to request for a certificate of good standing. Investors, potential clients, and credit companies generally prefer to conduct business if the LLC has this document.

It is advisable to keep a certified copy of all business documents for record and legal purposes. This would include articles of organization, annual report, operating agreement, certificate of good standing, and tax records, to name a few.

How Much Does It Cost To Start An LLC - Choose Your State:

State Filing Fees Recurring
Alabama $200 + $25 Name Reservation Certificate $10 Annual Report + $100 Business Privilege Tax
Alaska $250 Articles of Organization + $50 State Business License $100 Biennial Report
Arizona $50 Articles of Organization + $300 Publication Notice $45 Annual Report
Arkansas $45 Online/$50/ Paper Articles of Organization $150 Annual Franchise Tax
California $70 + $20 Statement of Information $800 Franchise Tax + $20 Statement of Information (every two years)
Colorado $1 + $16 License Tax $10 Periodic Report
Connecticut $120 Certificate of Organization $80 Annual Report
Delaware $90 + $75 State Business License $300 Franchise Tax
Florida $125 Articles of Organization $138.75 Annual Report
Georgia $100 Online/$110 Mail Articles of Organization $50 Annual Registration
Hawaii $50 + $1 State Archive Fee $50 Annual Report
Idaho $100 Online/$120 Paper Articles of Organization None
Illinois $154 Articles of Organization $75 Annual Report
Indiana $100 Articles of Organization $30 Biennial Report + $25 Tax Clearance Certificate
Iowa $50 Certificate of Organization $60 Mail/$45 Online Biennial Report
Kansas $165 Articles of Organization $50 Online/$55 Mail Annual Report
Kentucky $40 Articles of Organization $15 Annual Report
Louisiana $100 Articles of Organization $30 Annual Report
Maine $175 Certificate of Formation $85 Annual Report
Maryland $100 Articles of Organization $300 Annual Report
Massachusetts $500 Mail/$520 Online Certificate of Organization $500 Annual Report
Michigan $50 Articles of Organization $25 Annual Statement
Minnesota $135 Mail/$155 Online Articles of Organization None
Mississippi $50 Certificate of Formation None
Missouri $105 Mail/$52 Online Articles of Organization None
Montana $35 Articles of Organization $20 Annual Report
Nebraska $100 Online/$110 In Person + $25 Publication Fee $25 Biennial Report
Nevada $75 + $200 State Business License + $150 Initial List of Members $150 Annual Report
New Hampshire $100 Certificate of Formation $100 Annual Report
New Jersey $130 Online/$125 Mail Certificate of Formation $75 Annual Report
New Mexico $50 Articles of Organization None
New York $200 + $50 Certificate of Publication Annual report fee depends on LLC's Gross Income
North Carolina $125 Articles of Organization $203 Online/$200 Paper Annual Report
North Dakota $125 Articles of Organization $50 Annual Report
Ohio $99 Articles of Organization $25 Annual Report
Oklahoma $100 Articles of Organization $10 Annual Certificate
Oregon $100 Articles of Organization $100 Annual Report
Pennsylvania $125 Certificate of Organization $70 Decennial Report
Rhode Island $150 Articles of Organization $50 Annual Report
South Carolina $110 Articles of Organization None
South Dakota $150 Online/$165 Paper Articles of Organization $50 Online/$65 Paper Annual Report
Tennessee $300 Articles of Organization $20 Annual Report
Texas $300 Certificate of Formation None
Utah $54 Certificate of Organization $18 Annual Report
Vermont $125 Articles of Organization $35 Domestic/$140 Foreign Annual Report
Virginia $100 Articles of Organization $50 Annual Registration
Washington DC $220 Articles of Organization $300 Biennial Report
Washington $180 Email/$200 Online Articles of Organization $60 Annual Report
West Virginia $125 + $30 Business License $25 Annual Report
Wisconsin $130 Articles of Organization $25 Annual Report
Wyoming $100 Mail/$102 Online Articles of Organization $50 Annual Report

FAQs

Is LLC for Free Legit?

LLC for free is not legit, and any party offering LLC formation services for free is a scam. In many states, the filing fee can range from $50 to $500.

What Can You Write Off on Taxes With an LLC?

You can write off legal fees, professional services for accounting and attorneys, and any other costs on taxes with an LLC.

LLCs can reduce their tax obligations by claiming write-offs for business-related expenditures, including rental expenses, advertising, travel, and shipping costs.

LLC Formation Cost

The cost of forming an LLC varies by state and depends on many other factors, such as the filing fee for legal documents.

How much you spend on forming your LLC will depend on company structure, tax jurisdiction, and incorporation complexity.

The total cost typically ranges from a few hundred to a few thousand dollars. It is essential to consult with a qualified online legal services or business advisor to understand the specific requirements and costs associated with forming an LLC in your jurisdiction.


References:

  1. https://obamawhitehouse.archives.gov/sites/default/files/docs/licensing_report_final_nonembargo.pdf

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