One day, your limited liability company (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.
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Want a closer look at how much it costs to form an LLC in your state? Check out our detailed rundown in any state through the drop-down menu below.
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, 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.
Want to form an LLC for free? ZenBusiness will file all LLC formation paperwork for $0 + state fee (normally $49 + state fee). No catch, just savings.
LLC Filing Fees by State
District of Columbia: $99
Florida: $100 (plus $25 registered agent fee)
Maryland: $100 (plus 3% service fee)
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
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.
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.
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 annual report required
Arkansas: $150 annual report
California: $20 biennial report, plus $800 minimum annual franchise tax
Colorado: $10 annual report
Connecticut: $80 annual report, plus $250 annual 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 annual report required
Montana: $20 annual report
Nebraska: $13 biennial report
Nevada: $150 annual report, plus $200 business license fee
New Hampshire: $100 annual report
New Jersey: $75 annual report
New Mexico: No annual report required
New York: $9 biennial report, plus $25 minimum annual LLC filing fee
North Carolina: $200 annual report
North Dakota: $50 annual report
Ohio: No annual report required
Oklahoma: $25 annual report
Oregon: $100 annual report
Pennsylvania: $70 decennial report
Rhode Island: $50 annual report
South Carolina: No annual report required
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: $60 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.
If you want to use a service to form your LLC, there are dozens of options. We invite you to check out our full list of the best available LLC formation services, but we’ll also share a couple of the most popular options below. ZenBusiness is the best LLC formation service available. That said, ZenBusiness receives outstanding customer feedback, with more than 9,800 reviews available online and very few negative reviews among them. For most people, LegalZoom is the first name that comes to mind for LLC services due to their massive advertising budget. LegalZoom’s pricing and features may not compete on an equal playing field with ZenBusiness, but its brand power is notable and it receives good customer reviews. For a side by side comparison, check out our LegalZoom vs ZenBusiness review.
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If you want to use a service to form your LLC, there are dozens of options. We invite you to check out our full list of the best available LLC formation services, but we’ll also share a couple of the most popular options below.
ZenBusiness is the best LLC formation service available. That said, ZenBusiness receives outstanding customer feedback, with more than 9,800 reviews available online and very few negative reviews among them.
For most people, LegalZoom is the first name that comes to mind for LLC services due to their massive advertising budget. LegalZoom’s pricing and features may not compete on an equal playing field with ZenBusiness, but its brand power is notable and it receives good customer reviews.
For a side by side comparison, check out our LegalZoom vs ZenBusiness review.
Frequently Asked Questions
When Is the Best Time to Start an LLC?
We think you should start an LLC before you begin conducting business. While it is entirely legally acceptable to operate your business as a sole proprietorship or general partnership before forming an LLC, doing so subjects you to a number of risks that LLCs don’t have to worry about.
For example, informal business structures don’t have limited liability protection, so any lawsuit filed against the business can include the owner’s personal assets as well as the business assets.
Should I Use an LLC Service, Hire an Attorney, or Form My Own LLC?
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be formed by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
How Do Online LLC Services Work?
Using an online LLC service removes much of the hassle from the business formation process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your registered agent.
The service then creates your articles of organization and files them with your state to create your new LLC.
Are LLC Formation Websites Legit?
Absolutely. There are quite a few reputable companies offering LLC formation services these days, including the three best LLC services we discussed earlier.
In fact, while we certainly have our opinions about which ones offer the best pricing and features, every one of the incorporation services we discuss on this website is entirely legitimate and trustworthy.
Does Using an LLC Service Give Me More Legal Protection or Privacy?
In some ways, using an LLC service does protect your privacy, especially if you choose to also have that company serve as your registered agent.
This is due to the fact that, if you serve as your own registered agent, your personal address will often become part of the public record. Using a registered agent service not only provides the privacy of using the agent’s business address as your own, but it also significantly cuts down on junk mail.
This is why we’re such big fans of companies like Northwest Registered Agent that include a year of registered agent service with their LLC formation packages.
Should I Form an LLC or Corporation?
This is an impossible question to answer in an across-the-board manner, as each business type has its own advantages and disadvantages. That said, the LLC is typically the more suitable option for small businesses and solo entrepreneurs, while the corporation is usually a better fit for large companies. For more info, check out our complete comparison guide between LLCs and corporations.
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.