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

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.

With my background in Mergers and Acquisitions and a degree in tax law, I saw the necessity for clear insights into LLC-related expenses.

After conducting detailed research and engaging with legal professionals within the state, I've prepared a detailed guide on the costs of establishing an LLC to offer a clear perspective on the financial aspects involved.

Quick Summary

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)

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.

"Filing fees constitute the primary portion of LLC startup costs for most entrepreneurs, and while legal assistance isn't mandatory for submitting articles of organization, employing an LLC filing service can be beneficial due to their cost-effective solutions."

- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter

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

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.

According to a survey by the Business Formation Statistics, around 50% of LLCs opt for professional registered agent services to ensure legal compliance and professional handling of sensitive documents.

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.

According to the National Association of Secretaries of State, about 85% of entrepreneurs utilize this verification step to streamline their registration process and avoid complications.

Expenses Following the Approval of Your 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)

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)

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.

4. Operating Agreement (Optional, but Recommended)

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.

5. Employer Identification Number (\$0 - Optional but Recommended)

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

---

References:

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