How Much Does It Cost to Start an LLC? Complete Cost Breakdown for 2025

How much does an LLC cost in 2025? Your total LLC cost includes your state filing fee (often $50–$150, but some states run $200–$500+) plus ongoing annual report or franchise tax obligations. Optional items—like a registered agent (~$100–$300/yr), operating agreement templates, and name reservation—can raise the first-year spend, while your EIN is free if you apply directly with the IRS. Below you’ll find a state-by-state breakdown and practical ways to reduce LLC costs without risking compliance.

The True Cost of Starting an LLC in 2025

Launching an LLC isn’t just about a one-time filing fee; there are ongoing expenses that pop up every year or at key stages of growth. While these fees can feel like obstacles, they often provide valuable legal protections. Below, we’ll examine the core outlays, why cost to start an LLC can differ between states, and typical price ranges across the nation.

Understanding LLC Filing Fees

When you form an LLC with the state, you generally file Articles of Organization and pay a state filing fee. These costs required to form an LLC cover official administration. For some states, this sum is quite low; for others, it can be more than a few hundred dollars. Typically:

• The minimum LLC filing fee can be as low as $35 and commonly falls between $50–$150 in many states (with a nationwide average around $132).
• Additional fees might apply if you request expedited filing or form a foreign LLC.
• Some states have separate charges if you must also meet a publication requirement (for example, an LLC in New York or a notice for LLC in Nebraska).

Understanding your state’s baseline helps you gauge whether you should consider an alternative business structure or location to keep expenses manageable.

Why LLC Costs Vary by State and Business Needs

These differences don’t hinge solely on geography. Each jurisdiction sets unique rules for state filing fees and overall compliance. That’s why an LLC in New Mexico might cost less than an LLC in New York or LLC in Colorado. Also, depending on the complexity of your company, like if it has multiple members or you’re planning advanced ventures, your LLC operating agreement or licensing obligations may require more investment. If you foresee expansions, a robust setup at launch may also save you from additional costs down the road.

Average Cost of Starting an LLC Across the U.S.

While there’s no single average cost that fits every region, fees tend to fall within a broad bracket:

• $50 to $150 in states known for affordability
• $200 to $500 in higher-cost jurisdictions or those with a publication requirement
• Occasionally $0 when a state temporarily waives fees (e.g., California did so from July 1, 2022–June 30, 2023), though that’s rare today

Below are some typical line items you’ll see across the country:

• Initial LLC formation filing (your Articles of Organization)
• Optional DBA or trade name registration
• Local business license or permit fees
• LLC annual fee or recurring annual report / periodic report charges

By clarifying these charges in advance, you can realistically forecast the cost to form an LLC and minimize sticker shock, especially once you factor in a registered agent service and any annual report obligations.

Business credit — you also inherit potential pitfalls. The LLC might have hidden debts, pending lawsuits, or outdated tax filings. A negative reputation can hamper future growth. Knowing these issues, you must carefully evaluate every aspect, from outstanding tax liabilities to intangibles like staff morale or prior management mishaps. Proper due diligence is key to ensuring you buy a strong foundation rather than a sinking ship.

Filing Fees for LLCs: A State-by-State Comparison

Although your baseline cost to create an LLC largely depends on location, certain states stand out for affordability, while others demand heftier sums. Below, we’ll show you which ones rank as the cheapest for LLC formation and the priciest. We’ll also detail filing fees for all 50 states in 2025 — so you can see at a glance whether your LLC filing fee might cost more or less than you’d expect.

Cheapest States to Start an LLC: Where to Save Money

Some states truly shine in cost-effectiveness for new or small business setups. According to current data (updated for 2025), these are 10 budget-friendly picks, balancing a low Articles of Organization fee with manageable annual report or recurring costs:

1. LLC in Kentucky — $40 state filing fee; $15 annual report.
2. LLC in Michigan — $50 Articles of Organization; $25 annual statement.
3. LLC in Missouri — ~$50–$51 filing; no annual report for LLCs.
4. LLC in Iowa — $50 formation fee; $30 biennial report (online).
5. LLC in Montana — $35 formation; $20 annual report (2025 report was temporarily waived).
6. LLC in New Mexico — $50 filing; no annual report requirement.
7. LLC in Arizona — $50 Articles of Organization; no annual report for LLCs.
8. LLC in Mississippi — $50 formation fee; annual report due but $0 fee.
9. LLC in Hawaii — $50 filing; $15 annual report.
10. LLC in Colorado — $50 formation; $25 periodic report.

Note: Even if your home state isn’t on this list, sometimes it’s better to file where you operate, especially if forming an out-of-state LLC triggers extra compliance or corporate income tax obligations.

Note: Even if your home state isn’t on this list, it’s often best to form an LLC where you operate. Registering an out-of-state LLC usually triggers foreign LLC registration, extra filings, and taxes in your home state — erasing any upfront savings. For example, Delaware has a modest $110 filing but a $300 franchise tax each year; Wisconsin charges about $130 to file online; Arkansas has a low $45 formation fee but a $150 annual franchise tax.

States with the Highest Filing Fees: What to Expect

On the flip side, states like California or Massachusetts carry notably higher up-front costs. For example, an LLC in California pays $70 to file the Articles of Organization (plus a $20 Statement of Information within 90 days) and owes an annual $800 franchise tax to the Franchise Tax Board; the temporary first-year waiver applied only to tax years beginning 2021–2023 and has expired. Meanwhile, Massachusetts charges $500 to file a Certificate of Organization (and $500 for the annual report thereafter). Bear in mind that a higher filing fee doesn’t always translate to better benefits; it’s often tied to local tax structures or franchise-tax rules.

Filing Fees in All 50 States (2025)

Below is a snapshot of each U.S. state in alphabetical order. The details reflect the state filing fee to create an LLC, an official link for LLC formation references, and any relevant remarks. These state fees are updated for 2025 but can change if legislatures revise statutes, so always confirm on your Secretary of State website before filing.

Keep in mind, data cost varies if legislatures enact new policies or if specialized add-ons (like professional licensing) apply to your business.

Additional Costs When Forming an LLC

Beyond the mandatory state fees, a few optional or secondary expenses can pop up, especially if you’re leveraging professional help or require certain documents. Below, we’ll explore common add-ons like a registered agent service or an LLC operating agreement—and whether they’re worth the price, plus when an EIN matters.

Registered Agent Fees: What to Know Before You Choose

A registered agent service typically handles official mail, ensuring you never miss lawsuits or government notices. The cost might be:

• $0 if you act as your own agent (but that can hamper privacy)
• $100–$300 per year if using a professional agent
• Possibly higher for premium coverage, like 24/7 phone support

Most business owners prefer a professional to keep personal addresses off public records. Plus, you avoid risking loss of good standing if you’re unavailable to receive crucial documents.

Operating Agreement Costs: DIY vs Legal Services

While not always mandatory with the state, an llc operating agreement clarifies membership roles and distributions. Below is a table contrasting the standard approaches:

For many small business owners, a template suffices, but if your LLC has multiple partners or intricate profit-split structures, paying an attorney might ensure airtight clarity. For many small business owners, a template suffices, but if your LLC has multiple partners or intricate profit-split structures, attorney fees for creating an LLC might ensure airtight clarity.

EIN Registration: Is It Really Free Through the IRS?

Yes, the Internal Revenue Service issues an EIN at no cost when you apply directly on the IRS website. Some third-party platforms charge extra to “get an EIN,” but you can always do it yourself. An EIN is required if you have employees, and it’s commonly used for business banking; some banks let sole proprietors or single-member LLCs open accounts using an SSN, but having an EIN can expand your options. If you plan to have your LLC taxed as an S corporation, you’ll use IRS Form 2553 to make that election. Apply only on IRS.gov to avoid unnecessary fees or misleading ads.

Hidden Costs You Shouldn’t Overlook

A handful of smaller or less obvious expenses can take new owners by surprise. These may not appear at initial formation but pop up as your enterprise grows or changes. Planning for them — like a business license, an LLC operating agreement, or a trademark — means fewer stress points and a more realistic forecast.

Business Licenses and Permits: Are They Mandatory?

In most states, certain professions—like contractors, real estate agents, or health providers—need state or local licenses. Even everyday services might require a local permit. To inspire your naming process, explore our LLC names examples to find the perfect name for your business. These fees can be minimal or quite steep, depending on your field. Some municipalities require a city business license that you renew annually, though renewal rules and costs vary by location. If you skip these, you risk fines or forced closures, so confirm requirements with local offices.

Trademarking Your Business Name: How Much Does It Add?

If your brand is unique or national in scope, a trademark can protect it. As of 2025, the USPTO uses a single base application fee of $350 per class (Sections 1 or 44), with possible extra charges if your application is incomplete or uses free-form identifications—attorney help adds more. This replaces the old TEAS Plus/Standard split. Filing with the USPTO is optional for starting an LLC but smart if you plan multi-state expansion.

Premium LLC Formation Services: Are They Worth It?

Numerous providers bundle convenience features like expedited filing, compliance reminders, or specialized docs. Some owners value these perks; others view them as upsells. If you’re comfortable filing yourself, skipping add-on packages can slash costs. If you’re short on time or prefer a hands-off approach, an LLC formation service can be worth paying for to reduce errors and keep deadlines on track.

Ongoing Costs of Maintaining an LLC

Forming your company is just the first step. You’ll likely face recurring fees, which can include an annual report, a franchise tax, or renewal costs. Understanding them ensures you can maintain an LLC in good standing year after year.

Annual Report Fees: How They Vary by State

Filing an annual report (or periodic report) can range from $0–$500+ depending on the jurisdiction, most fall roughly between $20–$200, but notable outliers exist. For example, LLC in Mississippi files at $0, LLC in Colorado currently pays $25 per periodic report, LLC in Florida pays $138.75, LLC in D.C. pays $300 biennially, and LLC in Massachusetts pays $500 annually. Missing deadlines can trigger late penalties and even administrative dissolution; once dissolved, you’re no longer in good standing and may need reinstatement (often with back fees and penalties).

Franchise Taxes: States That Require Them

A handful of states impose a franchise tax separate from income tax. An LLC in California owes an $800 annual tax regardless of income. An LLC in Texas may owe margin/franchise tax depending on revenue (no-tax-due threshold $2.47M for 2024–2025; rates generally 0.375% or 0.75%). An LLC in Delaware pays a flat $300 annual alternative-entity tax, and Tennessee imposes franchise & excise taxes (franchise tax 0.25% of the base, $100 minimum). High-tax regions can push yearly costs to several hundred dollars or more.

Compliance Costs: Staying in Good Standing

Beyond paying renewals, you may need to update your Articles of Organization (e.g., name change), confirm your registered agent/address, or file a short statement of information/annual update. Skipping these can lead to fines or administrative dissolution; dissolved entities often must reinstate and pay delinquent fees before resuming normal business. Plan for these minor filings to protect your liability shield and avoid interruptions.

Cost Breakdown for Online LLC Formation Services

Multiple online services compete to help you start an LLC, each offering a variety of plans. Some keep it bare-bones; others add advanced features for an extra fee. Understanding what these packages include — like a registered agent service, LLC formation service, or document add-ons — can keep you from overspending.

Comparing Popular Platforms: LegalZoom, ZenBusiness, Harbor Compliance, Rocket Lawyer

LegalZoom

Known for brand recognition. They’ll file your Articles of Organization and can bundle a registered agent service and compliance subscriptions. Expect additional offers such as compliance alerts or legal plans, which can raise the overall price compared with budget providers.

ZenBusiness

Offers LLC formation service with clear tiers (Starter/Pro/Premium) and a user-friendly dashboard. Higher tiers may add items like an operating agreement, EIN, and annual report support, often at lower overall pricing than legacy brands.

Harbor Compliance

Tailored for heavier compliance needs, especially in regulated industries. Their registered agent service ties into software for reminders (e.g., annual report deadlines) and broader compliance management; formation help and expedited filing options are available.

Rocket Lawyer

Focuses on ongoing legal services via membership, plus LLC formation with an option for a $0 first filing (state fees extra). Useful if you want broader documents, like an operating agreement, and access to attorneys; discounted registered agent service is available to members.

Standard Plans vs Premium Features: Which Offers Better Value?

Many providers’ base packages cover essential tasks, like verifying the process to start your LLC and filing your Articles of Organization, while skipping niceties like an official binder or expedited shipping. If you prefer a quick, no-frills approach, standard tiers might suffice. Premium plans may add ongoing compliance reminders, business website tools, or document management. Weigh convenience against paying for benefits you could replicate yourself with a simple LLC formation service setup.

How to Avoid Upsells and Hidden Fees in Online Platforms

A little vigilance keeps you from paying for extras you don’t need with a cost to form an LLC package. Watch for “free” offers tied to memberships, add-ons to registered agent service, and post-purchase subscriptions.

To dodge surprising charges:

• Inspect the checkout screen carefully for pre-checked add-ons.
• Understand cost to maintain after year one (some freebies expire).
• Compare final totals across at least two platforms.
• Look for disclaimers on “free” filings that require a monthly membership (e.g., first filing $0 with membership).

A little vigilance ensures you pay only for the cost to form an llc service you genuinely want.

Reducing LLC Costs Without Sacrificing Quality

While forming an LLC can be pricey, you can cut corners responsibly. Below, we’ll highlight how to handle a do-it-yourself approach for llc formation, pick budget-friendly agent services, or exploit unique state programs that lighten the financial load.

Filing Your LLC Yourself: Steps and Potential Savings

By skipping a middleman, you handle the process to start your business personally:

1. Gather and complete your articles of organization from the official website
2. Submit them through your state’s e-file system or mail them in
3. Pay the standard state filing fees directly—no markup
4. Confirm receipt from the state, finalizing your registration
5. Create or sign an llc operating agreement

This self-service route typically saves you ~$50–$300 compared to some formation services. However, it might take a bit more time to research state forms. If you’re looking to minimize expenses, consider using a cheap LLC service that offers essential features without unnecessary add-ons.

Choosing Affordable Registered Agent Services

If you prefer not to handle official mail at your home or office, consider a cheaper agent service. Many reputable options run about $100–$125/year (e.g., $119–$125 from well-known providers), while some “$0” promos require other paid add-ons later. Prioritize fast document forwarding, clear pricing, and accurate filings to keep your LLC in good standing.

Taking Advantage of State-Specific Discounts

Some states occasionally promote new businesses with reduced state filing fee periods. For example, an LLC in Colorado could be formed for $1 during the fee-relief program starting July 1, 2022; that program ended, and Colorado now lists standard fees again (e.g., $50 to file Articles of Organization; $25 periodic report). Always check your state’s official site for current pricing before you file.

Advanced Strategies for Cost Management

For some businesses, even small cost differences can add up. Entrepreneurs operating across state lines—or seeking the most favorable tax environment—may consider more intricate tactics. Below, we’ll look at multi-state LLC planning, when a foreign LLC filing is triggered, and ways to reduce burdens from franchise tax and overhead.

Forming an LLC in a Cost-Friendly State: Pros and Cons

Registering in a low-fee place, like an LLC in New Mexico or an LLC in Wyoming, can shrink initial outlays (New Mexico filing ≈ $50; Wyoming filing ≈ $100). Yet if your physical operations remain in another jurisdiction, you’ll usually need to register there as a foreign LLC, which brings its own fees and paperwork. This can still be beneficial, but weigh upfront savings against ongoing compliance in both states; many owners find the extra filings outweigh short-term breaks.

Multi-State LLC Costs: How to Optimize for Savings

Expanding beyond your home base may require separate filings, each with unique annual report or franchise tax obligations. If you plan to do business in multiple areas, consider:

• Centralizing operations in the most efficient state you can realistically operate from (staff, logistics, taxes).
• Using local contractors instead of hiring employees when appropriate, but know that employees or a physical office typically trigger foreign LLC registration. States define “doing business” differently; e.g., Texas lists activities that don’t require registration, while California treats “repeated and successive transactions” as transacting intrastate business.
• Checking revenue thresholds that drive franchise tax (e.g., Texas’s $2.47M no-tax-due threshold for 2024–2025).

Clarity on these points helps you avoid surprise filings and fees.

Leveraging Tax Deductions to Offset LLC Formation Expenses

Business start-up costs can be deductible at the federal level. Under the Internal Revenue Service rules, you may deduct up to $5,000 of startup costs in the year your active trade or business begins (phased out when total startup costs exceed $50,000), with the remainder amortized over 180 months. For most LLCs taxed as partnerships, separate organizational expenses may also get a first-year $5,000 deduction (with the same phase-out) and 180-month amortization. Track every dollar — filing fees, a basic LLC operating agreement, early legal/accounting — for potential write-offs.

Special Cost Considerations for Different Business Types

Not all LLCs operate the same. If you’re in real estate, e-commerce, or freelancing, each domain has distinct cost variables. Understanding these can help tailor your budget and ensure your llc with the right strategy for your field, whether that means a tighter LLC operating agreement or smarter tax planning.

Real Estate LLCs: Unique Fees and Expenses

Real estate often calls for specialized business license requirements and robust insurance to shield personal assets. Expect:

• Additional local business license or property-use permits
• Higher landlord insurance premiums if you’re renting out properties (often ~25% more than homeowners insurance)
• Potential foreign LLC registration if you own or manage income-producing property across state lines

These add up, but many investors pay them to limit personal liability and isolate different properties via separate LLCs. In states like California, operating in-state can also trigger the $800 franchise tax even if you formed elsewhere, so factor that into multi-state plans.

E-Commerce Businesses: Costs to Start and Scale

Digital sellers might face fewer location-based rules, but you’ll likely invest in:

• E-commerce platform fees (e.g., Shopify/Amazon) and payment-processor charges
• Sales tax registrations where you have nexus (post-Wayfair economic-nexus standards)
• Marketplace rules where the platform, as a marketplace facilitator, collects/remits tax on your sales

A well-structured e-commerce LLC helps you stay organized for taxes, inventory, and expansions — start with clear records and confirm where you must collect/remit sales tax.

Freelancers and Gig Workers: Is an LLC Financially Viable?

Freelancers often begin as a sole proprietorship because it’s quick and cheap. But as your gig grows, LLC liability protection may be worth modest annual state filing/report fees. Evaluate revenue stability, your risk profile (client contracts, IP, etc.), and whether a simple registered agent service plus basic compliance keeps you protected without overspending.

Expert Insights: Is Starting an LLC Worth the Cost?

While fees can appear daunting, forming an LLC typically pays off in liability protection and tax flexibility. Below, we’ll look at a few deeper considerations: from immediate protections to the break-even point on your LLC expenses.

Balancing the Benefits of Liability Protection Against Costs

One major perk of an LLC is protecting personal assets from business lawsuits. If your brand fails or faces claims, the corporate veil usually shields your home or savings. To preserve that shield, keep finances separate (business bank account), use an LLC operating agreement, and follow basic compliance. Weighing that peace of mind against a few hundred in fees usually leans in favor of forming an LLC.

Tax Advantages of an LLC: Do They Justify the Expenses?

For many, an LLC is taxed via pass-through taxation, bypassing entity-level corporate income tax in most cases. Some owners elect LLC taxed as an S corporation to reduce self-employment tax by taking a reasonable salary plus distributions (file Form 2553). Though the LLC annual fee is an outlay, the right election can offset it—an accountant can confirm if the S-corp route fits your revenue and payroll realities.

ROI Analysis: How Quickly Can You Recover LLC Costs?

If you anticipate robust revenue soon after launching, the money spent on your Articles of Organization and setup can return quickly via brand credibility or contract eligibility. Many vendors prefer contracting with a formal business entity, viewing it as more professional. In some industries, that structure helps you land bigger deals that overshadow the initial startup fees, accelerating payback on your LLC costs.

Frequently Asked Questions About LLC Costs

Still wondering if a do-it-yourself approach is feasible or if each state’s fees differ drastically? Below are concise, high-impact answers to common questions about the cost to form an llc. Each is designed to pop up in Google’s featured snippet, giving you quick clarity on forming your LLC in 2025.