One day, your LLC is going to prosper, skyrocket into success, and line your pockets. Whether that day is in three years or three months, you’ve got the vision and drive to make it happen.
But as the old saying goes, you have to spend money to make money, and forming an LLC is no exception.
Up-front costs to start an LLC aren’t exorbitant, but depending on where you live, they can put a small dent in your finances. All 50 states have their own procedures regarding LLC formation and varying fees, ranging from fifty to several hundred dollars.
Start off on the right foot and avoid being surprised by startup costs by getting familiar with your state’s required fees.
Consider this guide your roadmap to state formation costs and ongoing compliance fees like annual reports, franchise taxes, and more. By the end, you’ll have a solid expectation of the costs involved with starting and maintaining an LLC, so you can confidently charge full steam ahead into your new endeavor.
What’s The Startup Cost to Form an LLC?
Try as you might, you won’t be able to escape LLC formation fees. Every state has one, even if you’re going the DIY route. Even though traversing the formation trail yourself is the most affordable option, but it’s also the most time-consuming.
So if you have a tight schedule and some budget flexibility, you might hire an LLC formation service or a lawyer to handle the particulars for you. Of course, while these options might be easier, they also carry additional costs (especially hiring a lawyer).
In any state, the primary cost associated with starting an LLC is a filing fee for the Articles of Organization. Certain states call this document the Certificate of Organization or Certificate of Formation, but all three of these forms accomplish the same thing. Peruse this list to see what kind of filing fee you should expect:
LLC Filing Fees by State
Alabama: $100 (plus $50 minimum probate judge fee)
District of Columbia: $220
Florida: $100 (plus $25 registered agent fee)
Maryland: $100 (plus 3% service fee)
Nebraska: $100 (plus $5 per page)
New Hampshire: $100
New Jersey: $125
New Mexico: $50
New York: $200
North Carolina: $125
North Dakota: $135
Rhode Island: $150
South Carolina: $110
South Dakota: $150
Tennessee: $300 (plus $50 per member, if you have more than six members)
West Virginia: $100
Arizona, Nebraska, and New York also require that you publish proof of your LLC formation in a local newspaper, and your business won’t be official until your ad has run in an approved publication. New York residents: you’ll need to pay the newspaper’s standard fees plus $50. While in Arizona and Nebraska, you just need to pay the newspaper’s advertising costs.
For many states, this is the only startup cost, so after filing your formation documents, it’s smooth sailing. But stay on your toes, because you’ll also need to keep track of certain ongoing maintenance fees.
How Much Does It Cost to Maintain an LLC?
Just like your car, your LLC will run smoothly for a lot longer if you keep up with its maintenance. You certainly don’t want it to “break down,” and most states have some type of reporting or maintenance fees that you’ll need to pay to keep your business in good standing. The most common is an annual report filing, a yearly document that keeps the state up-to-date on your business information. Several states also impose a franchise tax, an annual fee levied against your company’s net worth.
Each year, your LLC might make changes to its structure or contact information, and these maintenance filings typically serve to keep the state informed. New registered agent? New office address? New LLC name? You’ll need to report it. Even if you have no changes whatsoever, you’ll still need to file.
That said, reporting and tax requirements vary greatly from state to state, so check out the list below to find out how much you should factor into your budget each year.
Annual Report and Franchise Tax Costs by State
Alabama: $100 minimum annual franchise tax
Alaska: $100 biennial report
Arizona: No fee
Arkansas: $150 annual report
California: $20 biennial report, plus $800 minimum annual franchise tax
Colorado: $10 annual report
Connecticut: $20 annual report, plus $250 biennial business entity tax
Delaware: $300 annual tax
District of Columbia: $300 biennial report
Florida: $138.75 annual report
Georgia: $50 annual report
Hawaii: $15 annual report
Idaho: No fee
Illinois: $75 annual report
Indiana: $30 biennial report
Iowa: $60 biennial report
Kansas: $55 annual report
Kentucky: $15 annual report, plus $175 minimum annual limited liability entity tax
Louisiana: $30 annual report
Maine: $85 annual report
Maryland: $300 annual report
Massachusetts: $500 annual report
Michigan: $25 annual report
Minnesota: No fee
Mississippi: No fee
Missouri: No fee
Montana: $20 annual report
Nebraska: $10 biennial report
Nevada: $150 annual report, plus $200 business license fee
New Hampshire: $100 annual report
New Jersey: $50 annual report
New Mexico: No fee
New York: $9 biennial report, plus $25 minimum annual LLC filing fee
North Carolina: $200 annual report
North Dakota: $50 annual report
Ohio: No fee
Oklahoma: $25 annual report
Oregon: $100 annual report
Pennsylvania: $70 decennial report
Rhode Island: $50 annual report
South Carolina: No fee
South Dakota: $50 annual report
Tennessee: $300 minimum annual report (plus $50 per member, if you have more than six members), plus $100 minimum franchise tax
Texas: Annual franchise tax (varies depending on net surplus)
Utah: $20 annual report
Vermont: $35 annual report
Virginia: $50 annual report
Washington: $60 annual report
West Virginia: $25 annual report
Wisconsin: $25 annual report
Wyoming: $25 minimum annual report
Should I Hire an LLC Creation Service?
If you have some flexibility in your budget and you want to ensure that everything gets filed properly and expediently, you might consider hiring a reputable LLC service provider to form and maintain your business.
These companies excel at forming LLCs, it’s second nature to them, and they can simplify and streamline the process for you. Many of them can even take care of your yearly maintenance filings (like annual reports) and offer registered agent service as well. This takes due dates, service of process, and other responsibilities off your hands entirely.
Take a look at these 3 popular options:
- ZenBusiness: $39 – ZenBusiness is one of the most affordable LLC services available while also having great overall features. Even though they don’t have the extensive track record as the two options below, they have excellent customer reviews and have formed thousands of businesses since their founding.
- IncFile: $0 – IncFile not only will form an LLC for free, but they also include a full year of registered agent service with any LLC formation package. Throw in the fact that they also receive fantastic customer feedback, and IncFile is usually our top option for LLC formation service.
- Northwest Registered Agent: $79 – Like IncFile, Northwest bundles in a year of registered agent service, but they up the ante by locally scanning every document they receive on your behalf, while their competitors only scan the government docs they’re required to keep. Northwest’s premium customer support is unmatched among its competitors, making them well worth the extra money.
Looking for assistance with ongoing compliance? These are some solid options for Annual Report service:
- MyCompanyWorks: $49 – MyCompanyWorks is one of the most affordable annual report services out there. Plus, they have a 100% satisfaction guarantee and if you send their customer support a message, they’ll likely respond in under 20 minutes. This is a great option if you’re looking for excellent responsiveness for a low price point.
- Harbor Compliance: Price Varies – Want to sit back and relax – maybe sip some lemonade on a deck chair – while someone else handles the entire reporting process? give Harbor Compliance a look. Their fully-managed service takes care of every annual report step so you won’t have to worry about a thing.
Do you want the best of both worlds? A great LLC formation service and someone to handle your annual reports? Check out MyCorporation.
- MyCorporation: $99 – At this very reasonable price point, MyCorporation will not only form your LLC, but they’ll also include a year of their managed annual report service. You won’t even need to keep track of your own due dates!
Now that you’ve added a couple more lines to your LLC formation budget, you’re ready to take on the costs associated with starting your business. The good news is that it often doesn’t cost an arm and a leg to form and maintain this type of business entity, as there are only a few fees to consider.
The stress that might come with making these payments is enough, and you can avoid compounding it with deadlines and due dates by handing everything off to an LLC formation service. But, of course, you’re totally capable of doing it on your own too!
Equipped with the knowledge in this guide, you’re ready to get started, but since particular formation requirements can vary quite a bit from state to state, it’s a good idea to check out our in-depth state-specific guides too. This way, you’ll be able to tackle the formation process with confidence, one step closer to your LLC’s future success.