The cost of starting an LLC is not as simple as straightforward as you would first imagine.
Not only is the cost of your LLC determined by the state you choose (with state filing fees varying between $50 and $3,000!), but you could hire an attorney, an LLC service, a registered agent service, or other professional services to reduce some of the work involved in forming an LLC and those will also drive up the cost.
Below is a breakdown of the costs you need to consider when starting an LLC with the state filing fees listed below.
NOTE: If you want a step-by-step breakdown of the process for forming an LLC, check out our guide on how to start an LLC or our state-specific guides below:
LLC Formation Costs
No matter which state you live in or conduct business in, you can expect to incur some costs when you start an LLC. Whether these costs come in the form of LLC filing fees, fees for professional services, or state fees you can expect to shell out some money. Here is a list of some of the more common fees that business owners encounter when forming an LLC:
1. File Formation Documents
Depending on the state where you form your LLC, the main formation document could be called the Articles of Organization, a Certificate of Organization or a Certificate of Formation. Most states require that you file this document with the appropriate business filing office in that state, which is usually the Secretary of State. You can also expect to pay either an LLC filing fee or the state filing fee of between $50-$100 to file this document.
2. Reserving An LLC Name
Every LLC must have a unique name and is not registered to any other business entity in the state. To find out if another business is using the name that you had chosen for your company, you can perform a business name search on the Secretary of State website. Once you have found a business name that you like and is available, you'll need to file a name reservation form. While you will be asked to list the name of your LLC on the Articles of Organization form, you are not required to fill out and file a name reservation form at the same time that you file your Articles of Organization form.
By filing the name reservation form, you can reserve the proposed name of your LLC for between one to three months. There is a fee to file the name reservation form with the Secretary of State which costs between $10 and $50 depending on which state you're filing in.
3. Filing A Fictitious Business Name Application
If you dislike the name that you have officially registered for your LLC with the Secretary of State, you can apply for what is known as a fictitious name, trade name, or DBA (Doing Business As) name. This is not something you are required to do and you can just use your registered LLC name, which would avoid this LLC cost entirely.
To use a DBA name, trade name, or fictitious name, you may have to apply to register the name at a state level with the Secretary of State. However, your state may require that LLCs register trade names at a county level with the County Clerk instead. Some states don't even require LLCs to register for fictitious name use. It may be required for you to publish your fictitious name in a newspaper. The total costs between newspaper publication and state fees are between $10 and $200.
4. Obtaining Business Licenses
Depending on the state your LLC is in, you are likely to need a business license so that it is legal for your company to do business in the state. Some states require LLCs to acquire business licenses from the county or local government agencies, while other states allow LLCs to acquire a statewide business license. The fee for an LLC business license is between $50 and $100.
5. LLC Formation Services
LLC formation services can help you find, fill out and file all of the documents necessary to form your LLC and get it established in your state. They take a lot of the guesswork out of LLC formation and bear a lot of the workload, so it’s well worth the cost to pay the fee for their services. They typically charge a fee as low as $0 plus LLC filing fees.
However, you’re not required to use an LLC formation service. You can file all of the necessary documents yourself.
Annual Costs Of Running An LLC
Once your LLC is formed, there will be a number of annual fees for you to keep up with every year so that your business remains in good, legal standing. Here is a look at the cost of running an LLC and some of the fees you can expect to pay per year.
1. Annual Taxes
These annual LLC taxes are also referred to as a franchise tax. This is a minimum fee that all LLCs in the state have to pay regardless of their income. California is the state with the highest, minimum, annual franchise tax, charging $800 per year. The average minimum annual LLC taxes nationwide are between $100-$500.
2. Annual Report Filing Fees
In many states, LLCs are required to file an annual report or statement of information to ensure that the information registered with the Secretary of State for the LLC is kept up-to-date. Some states do not require an annual report or statement filing. There is a fee to file the annual report that costs between $20 and $100.
3. Registered Agent Fees
Every LLC must name a registered agent for their business when they form an LLC. A registered agent is an individual or professional service who will receive mail, legal documents, and service of process on behalf of your business.
You can choose to be the registered agent for your business, or choose a third-party individual over 18 whom you trust, though most businesses choose to hire professional registered agent services. Most of these professional services charge an annual fee of between $99-$299 a year. It's worth paying the annual fee for many business owners because of the peace of mind they get knowing that they will receive every piece of mail and legal documents sent to their business.
Here's an article to make your search for the right South Carolina registered agent for your LLC a bit easier: Best Registered Agent in South Carolina
4. License Renewal Fees
You will need to renew the business license for your LLC periodically. The business license may need to be renewed annually. The cost of business license renewal varies from state to state, but state fees for business license renewal cost between $20- $100.
5. Operating Agreement
LLCs in your state are probably not required to draft and file an operating agreement, but it is highly recommended that every LLC create and file one regardless of state requirements. There are several free options to help LLC owners create an operating agreement such as free operating agreement templates. But if you are not experienced with creating an operating agreement, you can hire an LLC formation service or an attorney to ensure the wording is legal and correct.
State LLC Formation Costs
Here is a breakdown of the costs associated with LLC formation in each state. These numbers do not include the fee for optional services, such as registered agent services, reservation of name, fictitious business name nor the fee for business licenses because these fees vary widely from state to state.
| State | LLC Filing Fees | Annual LLC Fees |
| Alabama | $180 | $100-$200 |
| Alaska | $250 | $150 |
| Arizona | $50 | $0- $100 |
| Arkansas | $45 or $50 | $150 |
| California | $90 | $810 |
| Colorado | $50 | $10 |
| Connecticut | $120 | $270 |
| Delaware | $90 | $300 |
| District of Columbia (D.C.) | $220 | $300 |
| Florida | $263.75 | $138.75 |
| Georgia | $100 | $50 |
| Hawaii | $50 | $15 |
| Idaho | $100 | $0 |
| Illinois | $150 | $75 |
| Indiana | $50 | $32 |
| Iowa | $50 | $35 |
| Kansas | $165 | $50 |
| Kentucky | $40 | $15 |
| Louisiana | $100 | $30 |
| Maine | $175 | $85 |
| Maryland | $450 | $300 |
| Massachusetts | $500 | $500 |
| Michigan | $50 | $25 |
| Minnesota | $135 | $25-$45 |
| Mississippi | $50 | $25 |
| Missouri | $50-$105 | $0 |
| Montana | $70 | $20 |
| Nebraska | $110 | $18 |
| Nevada | $75 | $350 |
| New Hampshire | $100 | $100 |
| New Jersey | $125 | $125/LLC member + $50 |
| New Mexico | $50 | None |
| New York | $275 | $25-$4500 |
| North Carolina | $125 | $200 |
| North Dakota | $135 | $50 |
| Ohio | $99 | $0 |
| Oklahoma | $100 | $25 |
| Oregon | $100 | $100 |
| Pennsylvania | $125 | $0 |
| Rhode Island | $150 | $450 |
| South Carolina | $110 | $0 |
| South Dakota | $150 | $50 |
| Tennessee | $300-$3000 | $300-$3000 |
| Texas | $300 | $0 |
| Utah | $70 | $20 |
| Vermont | $125 | $35 |
| Virginia | $100 | $50 |
| Washington | $259 | $79 |
| West Virginia | $130 | $25 |
| Wisconsin | $130 | $25 |
| Wyoming | $100 | $50 |
If you'd like to read a complete step-by-step breakdown of how to start an LLC in each state, click on your chosen state below:
Conclusion
Forming your LLC yourself may be the cheapest option but it often requires a lot of work and a lot of time. Hiring an attorney to form your LLC for you is another option but it could be costly. Hiring the best LLC service is typically the cheapest and most efficient way to form an LLC. They charge as little as $0 plus state filing fees.
If you choose to form your LLC yourself without the use of an attorney or formation service this can be a very rewarding experience. Check out my article on how to form an LLC here: How to start an LLC
And congratulations on choosing to form an LLC in your state!
