If you’re thinking about starting an LLC, you‘re probably wondering how much it will cost.
To start, you have to pay state filing fees, agency expenses and take care of various other costs. What’s more, expenses differ from one state to the next. Some states have more expensive requirements, while others are cheaper.
Read on as we give you a breakdown of the cost of starting an LLC in the United States.
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Why Knowing the Cost of Starting an LLC Is So Important
Knowing LLC formation cost is important for making informed business decisions.
You can weigh the decision as objectively as possible by analyzing the benefits of a course of action against the associated costs. You can determine the profitability of your operations and choose the best state to form and register your company in, as well as select the right LLC services—all without going over your budget.
These expenses are a crucial part of your business startup costs, which, in turn, are required for creating an accurate business plan; The more precise your prediction, the clearer the picture, and the better your decisions.
Besides, business owners often make business decisions without considering hidden costs, and starting an LLC is no different.
For instance, the LLC filing cost is $50 in Arkansas and $102 in Wyoming. Based on these numbers, you may prefer Arkansas over Wyoming. But while the annual LLC fee in Arkansas is $150, the state of Wyoming only charges $50. Therefore, starting an LLC in Wyoming would be cheaper than in Arkansas in the long run.
Knowing the cost of starting an LLC will also help you prioritize your investments, ensuring you focus on actions that return the most value first.
Quick Questions to Help You Determine the Cost of Starting an LLC
Below, we’ve listed a few tips to help you determine the cost of starting an LLC in your chosen state. Let’s take a quick look.
How Do You Want to Form Your LLC?
Do you want to hire a lawyer, do it yourself, hire an online incorporation service, or find assistance from online resources?
As you may have deduced, different choices have different costs.
If you form your LLC yourself, you only have to pay the state filing fees.
Hiring a lawyer to do it for you will cost you about $1000-$1500, whereas using an online incorporation service will be anywhere between $99 and $900. Both costs depend on the company/lawyer and package you select.
On the other hand, if you use free online resources, it won’t cost you anything.
Regardless of the LLC formation method you choose, you have to pay state filing fees. These charges typically range between $40 and $500, with the average filing fees for an LLC in the U.S. closing at $132.
Here’s a rundown of all 50 states’ filing fees:
Alabama
LLC Filing Cost: $212
LLC Annual Fee: $100 minimum
Alaska
LLC Filing Cost: $250
LLC Annual Fee: $100
Arizona
LLC Filing Cost: $85
LLC Annual Fee: No Annual Fee
Arkansas
LLC Filing Cost: $50
LLC Annual Fee: $150
California
LLC Filing Cost: $75
LLC Annual Fee: $20 Biennially + Annual franchise tax
Colorado
LLC Filing Cost: $50
LLC Annual Fee: $10
Connecticut
LLC Filing Cost: $120
LLC Annual Fee: $20
Delaware
LLC Filing Cost: $110
LLC Annual Fee: $300
Florida
LLC Filing Cost: $125
LLC Annual Fee: $138.75
Georgia
LLC Filing Cost: $100
LLC Annual Fee: $50
Hawaii
LLC Filing Cost: $50
LLC Annual Fee: $15
Idaho
LLC Filing Cost: $100
LLC Annual Fee: No Annual Fee
Illinois
LLC Filing Cost: $179
LLC Annual Fee: $75
Indiana
LLC Filing Cost: $98
LLC Annual Fee: $30
Iowa
LLC Filing Cost: $50
LLC Annual Fee: $45
Kanas
LLC Filing Cost: $160
LLC Annual Fee: $50
Kentucky
LLC Filing Cost: $40
LLC Annual Fee: $15
Louisiana
LLC Filing Cost: $105
LLC Annual Fee: $35
Maine
LLC Filing Cost: $175
LLC Annual Fee: $85
Maryland
LLC Filing Cost: $197
LLC Annual Fee: $300
Massachusetts
LLC Filing Cost: $520
LLC Annual Fee: $500
Michigan
LLC Filing Cost: $50
LLC Annual Fee: $25
Minnesota
LLC Filing Cost: $155
LLC Annual Fee: No Annual Fee
Mississippi
LLC Filing Cost: $53
LLC Annual Fee: No Annual Fee
Missouri
LLC Filing Cost: $52
LLC Annual Fee: No Annual Fee
Montana
LLC Filing Cost: $70
LLC Annual Fee: $20
Nebraska
LLC Filing Cost: $109
LLC Annual Fee: $10
Nevada
LLC Filing Cost: $425
LLC Annual Fee: $350
New Hampshire
LLC Filing Cost: $102
LLC Annual Fee: $100
New Jersey
LLC Filing Cost: $130
LLC Annual Fee: $75
New Mexico
LLC Filing Cost: $50
LLC Annual Fee: No Annual Fee
New York
LLC Filing Cost: $205
LLC Annual Fee: $9 Biennial
North Carolina
LLC Filing Cost: $127
LLC Annual Fee: $200
North Dakota
LLC Filing Cost: $135
LLC Annual Fee: $50
Ohio
LLC Filing Cost: $99
LLC Annual Fee: No Annual Fee
Oklahoma
LLC Filing Cost: $104
LLC Annual Fee: $25
Oregon
LLC Filing Cost: $100
LLC Annual Fee: $100
Pennsylvania
LLC Filing Cost: $125
LLC Annual Fee: No Annual Fee
Rhode Island
LLC Filing Cost: $156
LLC Annual Fee: $50
South Carolina
LLC Filing Cost: $150
LLC Annual Fee: No Annual Fee
South Dakota
LLC Filing Cost: $150
LLC Annual Fee: $50
Tennessee
LLC Filing Cost: $308
LLC Annual Fee: $300
Texas
LLC Filing Cost: $300
LLC Annual Fee: No Annual Fee
Utah
LLC Filing Cost: $76
LLC Annual Fee: $20
Vermont
LLC Filing Cost: $125
LLC Annual Fee: $35
Virginia
LLC Filing Cost: $100
LLC Annual Fee: $50
Washington
LLC Filing Cost: $200
LLC Annual Fee: $60
Washington D.C
LLC Filing Cost: $220
LLC Annual Fee: $300 Biennial
West Virginia
LLC Filing Cost: $125
LLC Annual Fee: $25
Wisconsin
LLC Filing Cost: $130
LLC Annual Fee: $25
Wyoming
LLC Filing Cost: $102
LLC Annual Fee: $50
Other expenses include:
- Filing Articles of Organization — $40-$500
- Reserving an LLC name (optional) — $10-$50
- Filing a fictitious business name application (optional) — $50-$100
Out of the above, only filing your LLC Articles of Organization is an unavoidable cost, as it is required. You won’t have the state’s go-ahead without the document, meaning your LLC won’t be registered. So make sure this document is carefully drafted and filed when starting your LLC.
Do You Need a Registered Agent for Your LLC?
A registered agent is a person or company who agrees to be the point of contact between you and the state or federal government. They are someone you appoint to accept official documents or service of process on behalf of your LLC.
The state has outlined a few requirements for a registered agent that includes having a street address in the state. As long as you meet these requirements, you can be your own registered agent, but it’s highly recommended you opt for a third party for peace of mind.
If you decide to hire a third party, you have to hire a commercial registered agent. This will cost you between $100-$300 per year, depending on the service you use.
We highly recommend using ZenBusiness. It offers affordable and experienced registered agents to handle all your legal documentation and correspondence on behalf of your company.
Besides giving access to registered agents, ZenBusiness can also simplify the LLC formation process and provide expert attorneys at the tip of your fingers for legal advice—all without breaking the bank.
Do You Have to Pay For an Operating Agreement?
Your operating agreement will either cost extra money or come included in your package based on how you want to form your LLC.
For example, if you do it yourself, you’ll have to purchase an operating agreement online, which will cost you around $50-$200. Or you may be able to find an operating agreement template for free online–just make sure it includes everything you need.
You can also use an online incorporation service. Drafting the operating agreement may be included in your subscription (if you purchase a mid-level or premium package), or you’ll have to pay an additional charge ranging between $50 and $100.
It doesn’t matter whether you get your operating agreement for free. What matters is how it’s written. This document should be clear and concise, with less fluff and more substance.
The other option is to hire a lawyer, which most likely will be a part of a package deal. This can cost you up to $500.
Will You Apply for an EIN Yourself?
As a newly formed company, you’ll have to obtain an employee identification number or an EIN to open your business bank account. EINs also make it easier for the IRS to keep track of your business.
The good news is the IRS allows business founders to obtain an EIN for free. But if you hire a lawyer, an EIN may be included in their fees. Lawyers can cost about $50-$100, depending on their hourly rate. It’s the same case with an incorporation website, where the EIN may be included as a part of the package, or you can pay an additional charge and get it from the service. Fees range between $50 and $100.
Does Your State Have Annual LLC Fees?
Most U.S. states have annual LLC fees. LLC owners must pay this fee to keep their company in good standing. Failure to pay your annual LLC fees on time may result in a shutdown. Your state may even dissolve your company!
Annual fees range from $0-$800 depending on where you operate, with the average LLC annual fees rounding up to $91 (annualized).
Your LLP may also be required to renew its local or state business life and every year. The renewal fees are usually $20 to $100.
Long-Term Strategies to Form Your LLC
In this section, we’ll review a few tried-and-tested strategies to help you form an LLC stress-free.
Perform an LLC Name Search to Comply With State Requirements
Every state has specific LLC naming requirements that business founders must follow. This is in addition to the fact your business name should be unique and easy to find by potential customers.
Keeping these pointers in mind, start with a quick name search on your Secretary of State‘s website to ensure it isn’t already taken and that it complies with the naming guidelines. This simple step will save you a lot of unnecessary trouble.
Maintain a Separate Bank Account
We highly recommend setting up a bank account in your company name as soon as you file your LLC formation documents.
Use this account for any and all company transactions, ranging from significant purchase agreements to buying everyday office supplies. Payments to the company should also be made to the company account and not personal accounts.
You really need to maintain separate accounts if you want to stay in the IRS’s good books. Commingling of personal and business assets may result in courts taking away your company’s liability protection.
Draft an Operating Agreement
Most states don’t require LLCs to prepare an operating agreement. But it’s still vital you have one in place—even if you’re the company’s sole owner.
Your operating agreement outlines legal guidelines and a framework for running your company while simultaneously establishing your business as a separate legal entity. It also outlines company ownership, member/manager responsibilities, and the profit distribution ratio of the LLC owners.
Company management and dissolution procedure are other aspects covered.
With everything clearly documented and organized, chances of any misunderstandings between members get greatly minimized.
Next Steps
After understanding and planning your LLC budget, the next step is to file the necessary paperwork to make your LLC official.
For this, you’ll have to file your Articles of Organization, appoint a registered agent, and pay the required fees. Alternatively, you can sign up with an LLC service to take care of these tasks on your behalf.
We’ve compiled a list of the best online legal services to get you started on the right track. Once your LLC is registered and official, you then need to focus on maintaining it to set yourself up for success.
