Forming a limited liability company (LLC) is one of the least expensive ways to start a business. But, each state does require business owners to pay certain LLC formation costs. The cost to form an LLC varies by state and may include a state filing fee, a name reservation fee, franchise taxes or annual report fees, and so on.
Read on to learn more about the costs associated with forming an LLC.
LLC Formation Costs
To form an LLC, you must file your Articles of Organization — a document called a Certificate of Formation or Certificate of Organization in some states. The filing fee for this document ranges between $40 and $500, depending on the state.
Beyond your state’s LLC filing fee, you may also need to consider several other costs and filing requirements to form an LLC.
Expedited Filing Fees
Some states offer expedited filing services for LLC Articles of Organization. In Georgia, for example, the cost of this speedy processing ranges from $100 to $1,000 based on how fast you want your document.
After you submit your LLC formation document to the appropriate state department for expedited filing, that department will review it and notify you if it filed or rejected your document. You should receive this notification within the time frame of your requested level of expedited service.
The expedited fee is in addition to the regular filing fee associated with the service you requested. Usually, expedited review periods occur only during business hours and don’t include weekends or state holidays.
Three states — Arizona, Nebraska, and New York — also require newly formed LLCs to publish a statement in a local newspaper that notifies the public of their formation. LLC owners must then provide the relevant state department with an affidavit of this publication. Publishing costs vary, depending on the state and the newspaper.
Assumed/Fictitious Name Fees
If you ever decide your LLC’s name no longer supports its brand, you can create an assumed name or fictitious name — also known as a “doing business as” (DBA) name. This’ll allow you to keep your existing LLC name while operating under a different trade name.
DBA name requirements vary by state, county, city, and business structure (e.g., an LLC). Registering a DBA name involves paperwork as well as filing fees that cost anywhere from $10 to $100.
Registered Agent Fees
A registered agent is a person or entity you assign to receive tax forms, legal documents, official notices, and any other documents or correspondence from the government on your business’s behalf. You, a friend or family member, another member of your business, or a hired registered agent service may serve as your LLC’s registered agent.
Registered agents — whether an individual or an entity — must:
- Have a physical street address (not a P.O. Box)
- Be available during normal business hours to accept service of process (official documents)
You must designate your registered agent on your Articles of Organization when you form your LLC.
Business Licenses and Permits
Once you pay all applicable LLC formation fees, you can start moving forward with launching your business. But, before you can start selling any products or services, hiring employees, or serving clients, you must first obtain a business license to operate within your state. In some states, you’ll also need to obtain certain permits. Check with your Secretary of State’s office for more details.
If you fail to properly file the appropriate paperwork with the appropriate state department, you may face financial penalties when your state learns you’re operating a certain type of business that requires a license and/or permit.
Registering In Other States
States like Delaware, Nevada, or Wyoming remain popular choices when it comes to forming LLCs. While forming an LLC in these states may provide some advantages, it’ll likely cost more in taxes and fees and require more time to maintain.
It’s usually best to form your LLC in the state in which you reside. Why? When you form an LLC in another state, you must pay the other state’s filing fee as well as the fee to register as a foreign LLC within your own state. This is on top of the additional fees you’ll likely face when dealing with multiple states.
Reserving an LLC Name
Before registering a business name, you must first check to ensure it’s unique by doing a business entity name search, a domain name search, a federal trademark search, or a web search.
After deciding on a business name, you may opt to reserve it to form your LLC. Every state offers entrepreneurs the option of reserving an LLC name for a fee. In Alabama, for example, name reservation filing costs between $25 and $28 based on an applicant’s subscriber status on the Alabama Secretary of State Online Services platform.
In conjunction with reserving a business name, you’ll also want to make sure it’s available as a URL to boost your LLC’s online presence. If another company already owns the “.com” URL, try adding modifiers to your desired name or use a different top-level domain (TLD) like “.co,” “.net,” or “.biz” until you find an available domain name.
Don’t skip this step. Even if you aren’t ready to build a website right now, it’s important to register your domain name so no one else can acquire it later on.
The total cost to buy and register a domain name will depend on the domain extension and/or your chosen domain registrar.
We recommend registering your domain name with GoDaddy®, which offers a one-month, free trial period.
LLC Filing Costs By State
Every state has a different fee structure so make sure you know where you want to run your business when you form your LLC. Many people consider forming a company in Delaware or Nevada because of the low operational costs and tax loopholes. But, it’s best to stick to your home state to avoid added processing time and expenses.
|State||LLC Filing Costs||LLC Reporting Costs & Type|
|Alabama||$200||$100 Minimum – Annual|
|Alaska||$250||$100 – Biennial|
|Arizona||$50 + Publishing Requirement||None|
|Arkansas||$45||$150 – Annual|
|California||$70||$20 – Biennial (Statement of Information) + Annual Franchise Tax|
|Colorado||$50||$10 – Annual (Periodic Report)|
|Connecticut||$120||$80 – Annual|
|Delaware||$90||$300 – Annual Franchise Tax|
|Florida||$125||$138.75 – Annual|
|Georgia||$100||$50 – Annual Registration|
|Hawaii||$50||$15 – Annual|
|Illinois||$150||$250 to $300 – Annual|
|Indiana||$95||$50 – Biennial|
|Iowa||$50||$30 to $45 – Biennial|
|Kansas||$160||$50 to $55 – Annual|
|Kentucky||$40||$15 to $30 – Annual + Annual Entity Tax|
|Maine||$175||$85 – Annual|
|Maryland||$100||$300 – Annual|
|Massachusetts||$500||$500 – Annual|
|Michigan||$50||$25 – Annual|
|Minnesota||$155||Annual Partnership Tax|
|Montana||$70||$20 – Annual|
|Nebraska||$100 + Publishing Requirement||$10 to $13 – Biennial|
|Nevada||$75||$125 – Annual|
|New Hampshire||$100||$100 Annual + Annual Enterprise Tax|
|New Jersey||$125||$50 – Annual|
|New York||$200 + Publishing Requirement||$9 Biennial + Annual Filing Fee|
|North Carolina||$125||$200 – Annual|
|North Dakota||$135||$50 – Annual|
|Ohio||$99||Annual Commercial Activity Tax|
|Oklahoma||$100||$25 – Annual|
|Oregon||$100||$100 – Annual|
|Rhode Island||$150||$50 – Annual|
|South Dakota||$150||$50 – Annual|
|Tennessee||$300||Annual Franchise & Excise Tax|
|Texas||$300||Annual Franchise Tax and Public Information Report fee|
|Utah||$70||$20 – Annual|
|Vermont||$125||$35 – Annual|
|Virginia||$100||$50 – Annual|
|Washington||$180 to $200||$60 – Annual|
|West Virginia||$100||$25 – Annual|
|Wisconsin||$130 to $170||$25 – Annual|
|Wyoming||$100 to $102||$50 or 0.02 Percent of Overall Asset Value – Annual|
Ongoing LLC Maintenance Costs
After you form an LLC, you’ll also need to budget for several ongoing maintenance costs.
Some states require LLCs to file franchise taxes (also called privilege taxes). Franchise taxes vary based on your LLC’s annual earnings in your state. A franchise tax is not a tax on franchises. It also differs from the federal and state income tax returns you must file annually. The filing fees for franchise taxes vary depending on the state in which you do business.
Annual and Biennial Reports
Most states require LLCs to file annual or biennial reports. States require these reports in order to update the information they have on file regarding an LLC’s name, address, ownership, registered agent, company structure, and more. The filing fees for annual or biennial reports vary by state.
Business Insurance Fees
It’s important to carry the proper insurance for your LLC. A few of the most common business insurance policies include:
- General Liability Insurance: This type of insurance protects against claims of personal injury, physical injury, or property damage. It’s required if you plan to bid on certain jobs and lease property, such as an office or warehouse space.
- Professional Liability Insurance: This coverage protects against claims of inaccurate or negligent work. It’s most common in the “professional” space where businesses offer services or advice to other businesses or consumers.
- Workers’ Compensation Insurance: This type of insurance protects your employees from on-the-job injuries or illnesses. All states — with the exception of Texas — require LLCs to carry workers’ compensation insurance.
The cost varies based on the type of policy and several other factors, including the number of employees you have and your specific coverage needs. Each policy protects against different types of risk, and insurers factor these differences into their policy rates.
Business License Renewal Fees
Most states require LLCs to renew their business licenses in order to maintain their “active” status with the Secretary of State in the state where they operate.
Renewing your business license also helps ensure your LLC remains in good standing with the state. Carefully tracking and complying with your state’s requirements — including reporting — will enable you to keep your business up and running. Failure to renew your business license and pay any applicable fees can result in penalties and fines. In Michigan, for example, LLCs must pay to renew their business license — a document this state calls a Certificate of Authority.
LLC Service Provider Costs
A professional LLC formation company can simplify the process of forming your LLC. While you certainly don’t have to hire one, these service providers offer convenient access to features that’ll streamline the entire process.
Formation Package Fees
A basic package from an LLC formation company will include the essential services needed to legally establish your LLC in your state. These companies also may opt to pair additional services with your formation package, such as:
- Serving as your registered agent
- Creating your LLC Operating Agreement
- Obtaining your LLC’s Employer Identification Number (EIN) from the Internal Revenue Service (IRS)
Registered Agent Service Fees
All states require LLCs to designate a registered agent when forming their business. You do this as part of filing your Articles of Organization (also known as a Certificate of Formation or Certificate of Organization in some states).
A registered agent is a person or entity representing your business that can receive tax forms and other correspondence from the government as well as accept properly served documents like a legal summons. Professional registered agent providers offer registered agent services for a fee to assist you in managing your company, maintaining compliance, and safeguarding your company records.
Operating Agreement Development Fees
An LLC Operating Agreement is a governing document that outlines your business and management structure. It protects the interests of all parties involved in the event your LLC encounters any legal or other issues in the future. Without this document in place, the state may intervene to settle any disputes involving your LLC.
Having an LLC formation service create a custom Operating Agreement for your LLC is an easy way to ensure you’ll have a detailed, legally binding document governing your new business.
Development of a custom Operating Agreement typically costs between $40 and $99.
EIN Registration Fees
An EIN essentially acts like a Social Security number for your LLC. The IRS issues EINs, and then uses them to keep track of each business’s tax reporting.
After forming your LLC, you’ll need to obtain its EIN. This is another task you may opt to entrust to an LLC formation company for an extra fee. These service providers typically charge $60 to $70 to register an EIN on behalf of their clients.
Do you have to pay ongoing fees for an LLC every year?
Some states require LLCs pay an annual franchise tax and/or annual report fee. Visit our How Much Does It Cost To Start an LLC? guide and select your state to learn exactly which ongoing fees your state requires.
What’s the cheapest way to form an LLC?
The least expensive way to form an LLC involves filing it yourself. You’ll still have to pay your state’s LLC filing fee, but that’s required whether you file on your own or use an LLC formation company. For more information on forming an LLC, check out our How To Start an LLC page.
Can you form an LLC for free?
No. All applicants must pay a state filing fee in order to form an LLC.
What states do I need to pay LLC publication fees?
Only three states require newly formed LLCs to publish a statement in a local newspaper that notifies the public of their formation: Arizona, Nebraska, and New York. These publication fees vary by state.
Do I need to pay a franchise tax for my LLC?
Most states require LLCs to file franchise taxes, but some states only require the filing of annual or biennial reports. Filing fees apply for both LLC franchise taxes and reports, which vary by state.
How much does an LLC formation service provider cost?
It depends on the LLC formation company you choose. We recommend ZenBusiness, which starts at $39 plus the applicable state fees.
How much does a business license cost to legally operate my LLC business?
The cost of your LLC business license will depend on the type of business you operate and the state in which it operates.
Information on this page has been gathered by a multitude of sources and was most recently updated on July 2021.
Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. StateRequirement and its members and affiliates are not responsible for any losses, monetary or otherwise. StateRequirement is not affiliated with any state, government, or licensing body. For more information, please contact your state's authority on insurance.
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