How much does it really cost to start an LLC? Are all state fees the same, or do they vary significantly? Should you consider hiring professional services or go the DIY route? These are critical questions for any entrepreneur planning to establish an LLC.
The cost of starting an LLC varies widely by state, with filing fees ranging from $50 to $500. Additional costs include hiring professional services, securing a registered agent, or reserving a business name, which can bring the total cost to $1,000 or more. For example, forming an LLC in Kentucky costs as little as $40, while Massachusetts can exceed $500 due to higher administrative fees.
In this article, we’ll cover:
- A state-by-state breakdown of LLC filing fees and annual costs.
- The hidden costs of forming an LLC, such as registered agents and professional services.
- Tips to minimize LLC costs without compromising on compliance.
- Answers to FAQs about forming and maintaining an LLC.
Ready to budget for your LLC and avoid costly surprises? Let’s explore the true cost of starting and running an LLC!
LLC Formation Costs: What to Expect
Starting an LLC involves both mandatory and optional costs, which can vary depending on your state and the services you choose. State filing fees typically range from $50 to $500, covering the legal registration of your LLC. Additional expenses, such as name reservations or professional services, may increase the total cost.
State Filing Fees for Starting an LLC
The state filing fees for starting an LLC vary significantly, ranging from as low as $50 in some states to over $500 in others. These fees are required to file the Articles of Organization, the document that officially establishes your LLC as a legal business entity. The cost often depends on state regulations and the administrative process.
For example, states like Kentucky and Arizona offer lower filing fees, making them appealing for entrepreneurs on a budget. On the other hand, states such as Massachusetts or California charge higher fees due to additional legal requirements. Some states also impose recurring annual fees or franchise taxes to maintain your LLC.
Understanding these costs upfront helps you budget effectively and choose the best state for your business. Below, we’ll break down the fees by state, explain why they vary, and provide insights into additional charges you might encounter when forming an LLC.
| 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 |
Low-Cost States for LLC Filing Fees
Certain states are known for their affordability when it comes to starting an LLC. For instance:
- Kentucky: Filing fees start at $40, making it one of the cheapest states.
- Arizona: Charges $50 for filing the Articles of Organization.
- Mississippi: Offers a low-cost option at $50.
These states are ideal for entrepreneurs looking to minimize upfront expenses while establishing a legal structure for their business.
High-Cost States for LLC Filing Fees
Some states impose higher fees due to additional compliance requirements. Examples include:
- California: Filing fees start at $70, but the state also requires an $800 annual franchise tax.
- Massachusetts: Charges $500 to file an LLC, one of the highest in the country.
- Texas: Filing fees are $300, reflecting its robust administrative processes.
Entrepreneurs should weigh these costs against potential benefits, such as market size or tax incentives.
Why Filing Fees Vary by State
The variation in filing fees across states is influenced by several factors, including:
- Administrative Costs: States with higher fees often allocate more resources to processing LLC applications.
- Economic Goals: Some states reduce fees to attract new businesses and stimulate economic growth.
- Recurring Requirements: States like Delaware charge low filing fees but make up for it with higher annual maintenance costs.
Additional LLC Formation Costs
Beyond state filing fees, forming an LLC can involve optional expenses depending on your business setup. Name reservation fees typically range from $10 to $50, allowing you to secure a unique name before filing. For businesses operating under a different name, DBA (Doing Business As) filings cost $10 to $200, depending on state requirements. Additionally, a business license, often necessary for legal operation, costs $50 to $100 on average. These costs vary based on your business needs and state regulations.
Do You Need Professional Services?
Forming an LLC can feel overwhelming, especially with complex state requirements and legal paperwork. While you can handle the process yourself, professional LLC formation services offer a hassle-free alternative. Starting at $0 plus state filing fees, these services simplify every step, ensuring accuracy and compliance.
For first-time entrepreneurs, using a professional service saves time, reduces errors, and provides peace of mind. We recommend Northwest Registered Agent, a trusted provider known for excellent customer support and reliability. Start your LLC confidently by choosing Northwest—click here to get started today.
Annual Costs of Running an LLC
Maintaining an LLC involves recurring annual costs to ensure compliance with state laws. These include franchise taxes, annual report fees, and license renewals, which vary by state. Typical expenses range from $50 to $800 per year, depending on your location and business requirements.
Franchise Taxes and State Fees
Many states require franchise taxes or annual state fees to maintain an LLC in good standing. These fees vary significantly depending on the state. For example:
- California: Charges a minimum annual franchise tax of $800, one of the highest in the U.S.
- Delaware: Requires a minimum payment of $300, favored for its business-friendly regulations.
In most states, LLC owners can expect to pay between $100 and $500 annually to comply with state regulations. These fees cover the privilege of operating as a legal business entity and ensure ongoing compliance.
Annual Report Fees
Most states require LLCs to file an annual report or Statement of Information to keep business records updated with the Secretary of State. These reports typically include details such as the LLC’s address and member information.
Fees vary by state, ranging from $20 to $100 per year. For instance, states like Florida charge $138, while Arizona does not require annual reports for LLCs. Staying compliant with these filings ensures your LLC maintains good standing and avoids penalties.
Registered Agent Costs
A registered agent is essential for every LLC, acting as the official recipient for legal documents and compliance notices. You can serve as your own agent for free, but this comes with risks, such as missing critical filings or court documents.
Many LLC owners prefer hiring professional registered agent services for reliability and convenience. These services typically cost $99 to $299 annually and ensure you never miss an important notice.
For trusted and affordable registered agent services, we recommend Northwest Registered Agent, known for their excellent customer support and privacy protections. Simplify your compliance and gain peace of mind—get started here.
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
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.
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!
Frequently Asked Questions About LLC Costs
Starting an LLC involves various costs, from state filing fees to annual expenses. Below, we answer the most common questions entrepreneurs ask about LLC costs, helping you understand what to expect and how to minimize your expenses. Each answer is tailored to provide clear and actionable information.
Starting an LLC typically costs $50 to $500, depending on the state. For example, Kentucky charges as little as $40, while Massachusetts charges $500. Additional expenses, such as registered agent services or business licenses, may increase the total. Filing fees are mandatory to legally register your LLC as a business entity.
The cheapest states to start an LLC are:
- Kentucky: $40
- Arizona: $50
- Mississippi: $50
These states have low filing fees, making them budget-friendly for entrepreneurs. However, some states may impose additional annual fees to maintain your LLC, which vary based on local regulations.
Yes, maintaining an LLC involves recurring costs to stay compliant with state laws. These typically include:
- Franchise taxes: $100 to $800 per year, depending on the state.
- Annual report fees: $20 to $100 per year.
Some states, like Arizona, have no annual report requirements, while others, like California, charge higher franchise taxes. Understanding these recurring costs helps you plan your LLC's long-term expenses.
Yes, every LLC must designate a registered agent to receive legal documents and compliance notices. You can serve as your own registered agent, but this requires constant availability during business hours.
For peace of mind and reliability, most LLC owners choose professional registered agent services. These typically cost $99 to $299 annually. Trusted providers like Northwest Registered Agent ensure your LLC stays compliant with state requirements.
Yes, forming an LLC yourself is often the cheapest option, as you’ll only pay state filing fees, which range from $50 to $500. However, the process can be time-consuming and prone to errors if you’re unfamiliar with legal requirements.
Using professional LLC formation services, starting at $0 plus state fees, simplifies the process and ensures compliance. Trusted providers like Northwest Registered Agent offer a cost-effective and hassle-free alternative for first-time entrepreneurs.
Yes, certain LLC formation costs can be tax-deductible. Expenses like state filing fees, professional services, and legal consultations are often categorized as startup costs by the IRS.
You can deduct up to $5,000 in startup costs in your first year of operation. For specific advice, consult a tax professional or refer to the IRS guidelines on startup costs.
To start an LLC in Iowa, follow these steps:
- Choose a Name for Your LLC: Ensure the name is unique and complies with Iowa's naming requirements. Conduct a name search on the Iowa Secretary of State website.
- File a Certificate of Organization: Submit this document to officially form your LLC. Filing can be done online or by mail, with a $50 state fee.
- Appoint a Registered Agent: Designate a person or service to receive legal documents on behalf of your LLC.
- Create an Operating Agreement (optional but recommended): This outlines the ownership and management structure of your business in Iowa.
- Obtain an EIN from the IRS: Required for tax purposes, especially if your LLC has multiple members or employees.
Completing these steps will officially form your LLC in Iowa, allowing you to legally operate your business. Visit the Iowa Secretary of State for detailed instructions and resources.
