Starting and running an LLC has a price. Luckily, the cost of starting an LLC is relatively affordable compared to future business expenditures down the road. Today’s guide explains how much an LLC costs and what you can expect when launching your first business. Here’s everything you need to know about how much does it cost to start an LLC.
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How Much Does an LLC Cost?
LLC costs can be divided into two categories: LLC setup costs and LLC maintenance costs. LLC setup costs relate to the state where you register your LLC. The maintenance costs are the ongoing expenses to sustain your Limited Liability Company.
Let’s take a closer look at both LLC cost categories.
LLC Costs: Setup
You are subject to several fees when creating and filing the legal documents needed to form your LLC. There are also costs when you register your LLC with state and local authorities. For instance, you must make sure you have all the proper business licenses, business bank accounts, certificates, and permits required by local, state, and federal governments.
Filing Fees
The main cost to set up an LLC is the fee for filing your LLC’s articles of organization with the secretary of state or other relevant state authority. The typical costs for filing fees range from $50 for legal services and $50 to $800 for filing fees, depending on which state you’re starting your business in.
For most new business owners, filing fees account for the majority of the LLC setup costs. Although you don’t need to hire a lawyer to file the articles of organization to form an LLC, we recommend using an LLC formation service.
There are several LLC services that can help form your LLC for less than $50 plus the additional state fee. Some notable service providers include ZenBusiness and Incfile. These LLC formation services offer excellent customer service and guide you through every step of the setup process.
Best of all, LLC formation services exponentially reduce the risk of improperly filing paperwork, which can cause additional fees to fix the paperwork or reapply. They also save you time by expediting the process and giving you all the information you are required to fill out.
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Operating Agreement
An LLC operating agreement typically costs $0 to $200, depending on if you create it yourself or use an interactive template from an LLC formation service provider.
Your LLC’s operating agreement is an internal document that describes your business’s daily operations, the owners’ roles and contributions, and how your LLC makes decisions. Although only required in five states (California, New York, Delaware, Missouri, and Maine), operating agreements are crucial for every business.
This document defines specific procedures and guidelines, such as how to divide profits and losses among owners. Therefore, unless you have a legal background, it’s important to use a legal service provider like ZenBusiness. These legal service providers offer interactive templates to ensure your operating agreement is catered to your specific needs.
You can find many free templates online if you don’t want to use a paid service. However, we don’t recommend drafting it by yourself. For a small fee of $50 to $200, a legal service provider can ensure your operating agreement is congruent with all members.
LLC Notice of Formation: Publication
Three states, including New York, Arizona, and Nebraska, require LLCs to publish a notice of their organization in the local newspaper. The fee for the publication ranges from $40 to $2,000, depending on your location. Consider this if you plan to set up your LLC in one of the three states mentioned above.
LLC Costs: Maintenanceo
After you file your articles of organization and register your business as an LLC, there are several costs associated with maintaining it. These fees include federal and state taxes, reporting costs, and the price of any services you use to maintain your LLC.
Taxes
Similar to any other entity or person, LLCs are subject to taxation. The exact tax costs vary from state to state. Read our state corporate tax guide for more information.
However, the federal government doesn’t take its portion of taxes directly from the LLC. Instead, the federal government collects taxes from the owners’ profits as a pass-through income. Nonetheless, LLCs can write off certain setup costs up to $5,000, including attorney fees, office space, equipment, and market research.
At the state level, most states tax LLC profits in the same manner as the federal government. However, a few states also have mandatory LLC franchise taxes. For instance, the annual franchise tax in California is a minimum of $800, and the franchise fee in Delaware is $300.
Furthermore, your LLC is subject to reporting fees at the state government level. These fees range from state to state, but you can expect to pay around $100 yearly.
Registered Agent
The typical costs for registered agents range from $0 to $300.
An LLC registered agent is the primary point of contact between your LLC and the state. As such, your registered agent receives all legal documents and accepts the service of lawsuits. Although any adult aged 18 or above can be a registered agent, they must reside in the same state as the LLC and be available during business hours.
Since there is a lack of restrictions on who you can designate as a registered agent, you can be your own registered agent or appoint someone else in the company. However, we recommend using a registered agent service from reputable providers like ZenBusiness, Northwest Registered Agent, or Incfile.
Registered agent services ensure your LLC never loses important legal documents and government notices in the mail. These service providers scan all the mail they receive locally and forward the documents to you as soon as they can. Depending on the registered agent service provider, you can expect to pay an annual fee of $100 to $300.
Cost to Form an LLC in All States
The table below states the filing fees in each state as well as any annual expenses. The LLC filing fee is a one-time fee paid to the state when you create your LLC.
The LLC ongoing costs are ongoing mandatory fees you must pay every one to two years, depending on your state. This is because most states require LLCs to file a regular report and pay an annual fee. These ongoing fees keep your LLC in compliance and in good standing. In most states, they will shut down your LLC if you fail to pay the ongoing fees.
State
LLC Filing Fee
LLC Ongoing Costs
Alabama
$200
$100 minimum (annually)
Alaska
$250
$100 (every two years)
Arizona
$50
$0
California
$70
$800 (annually) + $20 (every two years)
Colorado
$50
$10 (annually)
Connecticut
$120
$80 (annually)
Delaware
$90
$300 (annually)
Florida
$125
$138.75 (annually)
Georgia
$100
$50 (annually)
Hawaii
$50
$15 (annually)
Idaho
$100
$0
Illinois
$150
$75 (annually)
Indiana
$95
$30 (every two years)
Iowa
$50
$45 (every two years)
Kansas
$160
$50 (annually)
Kentucky
$40
$15 (annually)
Louisiana
$100
$35 (annually)
Maine
$175
$85 (annually)
Maryland
$100
$300 (annually)
Massachusetts
$500
$500 (annually)
Michigan
$50
$25 (annually)
Minnesota
$155
$0
Mississippi
$50
$0
Missouri
$50
$0
Montana
$70
$20 (annually)
Nebraska
$105
$10 (every two years)
Nevada
$425
$350 (annually)
New Hampshire
$100
$100 (annually)
New Jersey
$125
$75 (annually)
New Mexico
$50
$0
New York
$200
$9 (every two years)
North Carolina
$125
$200 (annually)
North Dakota
$135
$50 (annually)
Ohio
$99
$0
Oklahoma
$100
$25 (annually)
Oregon
$100
$100 (annually)
Pennsylvania
$125
$70 (every ten years)
Rhode Island
$150
$50 (annually)
South Carolina
$110
$0
South Dakota
$150
$50 (annually)
Tennessee
$300
$300 (annually)
Texas
$300
$0
Utah
$54
$18 (annually)
Vermont
$125
$35 (annually)
Virginia
$100
$50 (annually)
Washington
$99
$60 (annually)
West Virginia
$100
$25 (annually)
Wisconsin
$130
$25 (annually)
Wyoming
$100
$60 minimum (annually)
Best LLC Formation Services
When creating an LLC for the first time, we recommend using a business registration service provider. These services are designed to make your LLC setup as simple as possible. Here are the top two LLC formation services you can use right now.
ZenBusiness is the best all-in-one LLC formation service that’s been helping businesses with LLC formation for over a decade. As such, ZenBusiness has assisted over 300,000 businesses and carries an excellent reputation for speed and transparency.
In addition to LLC formation services and same-day filing, ZenBusiness also provides registered agent services and EIN (employer identification number) assistance. You can even opt for ZenBusiness’ worry-free compliance, domain name registration, web design, and business banking services. Read our ZenBusiness review to find out why it’s our top pick.
- Trustworthy online LLC formation services
- Excellent customer service
- User-friendly website
- Affordable tier-based plans
- Registered agent service auto-renews for $99 each year
- Cheaper options for web hosting and domain name registration exist
Pricing
ZenBusiness offers three pricing tiers for its LLC formation services:
- Starter: $49 per year
- Pro: $199 per year
- Premium: $299 per year
Inc Authority is another LLC formation provider that offers free business registration services. This service provider offers the best customer support out of all the options available. This is because you can access 24/7 US-based support when you create your LLC with Inc Authority.
Helping businesses for over three decades, Inc Authority has established itself as one of the most worthy players in the LLC formation space. Inc Authority has thousands of positive reviews and an innate understanding of how to get your LLC up and running as soon as possible. Read more about Inc Authority in our review.
- Extensive range of LLC services
- Outstanding customer service
- Excellent free plan
- Lots of marketing upsell
- Paid plan pricing is confusing
- Lack of BBB accreditation
Pricing
Although Inc Authority offers free LLC filing services, you can opt for a premium bundle:
- Starter: Contact Inc Authority for pricing
- Fast Track: Contact Inc Authority for pricing
LLC Cost Frequently Asked Questions (FAQs)
Here are a few common questions we receive from our readers about how much does it cost to start an LLC.
Bottom Line on LLC Cost
Starting an LLC is an important part of establishing a flourishing business in the United States. However, some people may shy away from forming an LLC because of the LLC costs. In general, you can start an LLC with less than $1,000. The most expensive part of the process is filing your LLC registration documents with the secretary of state.
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