How Much Does It Cost To Start An LLC? (2024 Guide) (2024)

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A limited liability company (LLC) is one of the most powerful tools available to entrepreneurs. It protects the owners from business liabilities, so they cannot be held personally responsible, and provides tax flexibility. And for all its power, LLC startup costs are relatively inexpensive compared to other investments you’ll make in your business.

LLC costs can be split into two categories: LLC startup costs and LLC maintenance costs. An LLC’s startup costs are mostly a function of the state where it’s being registered. There are also ongoing costs to maintain your LLC. Here’s what you need to know about how much it costs to start an LLC.

LLC Costs: Quick Overview

Formation and maintenance costs associated with LLCs can add up. Handling the process yourself can keep costs low. Here is how much it costs to start an LLC:

  • Filing fees: $35–$500
  • Operating agreement: $0–$600
  • Publication: $40–$1,500
  • DBA fees: $10–$100
  • Registered agent: $0–$300
  • Business license fees: $50–$1,000-plus
  • Annual report fees: $10–$800
  • Total: $150–$4,000-plus

Other expenses including the startup and ongoing operational costs for an LLC should also be considered. These include website development, marketing initiatives and employee-related expenses. Based on the profitability of your LLC, taxes are another consideration.

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LLC Costs: Startup

There are several fees associated with the creation and filing of legal documents to form your LLC. There are also some tangential costs associated with registering your LLC with state and local authorities. For example, you’ll want to make sure you have all the proper permits, licenses and certificates required by local, state and federal governments. How much you spend, ultimately, is a function of your willingness (or capability) to do it yourself.

Filing Fees

For most entrepreneurs, filing fees will account for the majority of their LLC startup costs. You don’t need a lawyer to file articles of organization to form an LLC, but it doesn’t hurt to use an LLC filing service, especially when you consider the low costs associated with these services. There are several service providers that can register your LLC for less than $50 plus the state fee.

Using a legal services provider is well worth the cost. It can reduce the risk of improperly filing paperwork, which can lead to additional fees to fix the application or reapply—not to mention all that wasted time.

StateFiling FeesRecurring
Alabama$200 + $25 name reservation fee$10 annual report + $100 minimum for the Business Privilege Tax (yearly)
Alaska$250$100 (every two years)
Arizona$50None
Arkansas$50 paper / $45 online$150 (yearly)
California$70 + $20 Statement of Information$800 Annual Tax (yearly) + $20 Statement of Information (every two years)
Colorado$50$10 (yearly)
Connecticut$120$80 (yearly)
Delaware$110$300 (yearly)
Florida$100 + $25 registered agent fee$138.75 (yearly)
Georgia$110 paper / $100 online$60 paper / $50 online
Hawaii$50$15 (yearly)
Idaho$120 paper / $100 onlineNone
Illinois$150$75 (yearly)
Indiana$100 paper / $95 online$50 paper / $32 online (every two years)
Iowa$50$45 paper / $30 online (every two years)
Kansas$165 paper / $160 online$55 paper / $50 online (yearly)
Kentucky$40$15 (yearly)
Louisiana$100$30 (yearly)
Maine$175$85 (yearly)
Maryland$100$300 (yearly)
Massachusetts$500$500 (yearly)
Michigan$50$25 (yearly)
Minnesota$135 paper / $155 onlineNone
Mississippi$50None
Missouri$105 paper / $50 onlineNone
Montana$35$20 (yearly)
Nebraska$110 paper / $100 online$30 paper / $25 online (every two years)
Nevada$75$150 annual report + $200 annual business license fee
New Hampshire$100 paper / $102 online$100 (yearly)
New Jersey$125$75 (yearly)
New Mexico$50None
New York$200$9 (every two years) + $25 for the IT-204 LL (yearly)
North Carolina$125$200 (yearly)
North Dakota$135$50 (yearly)
Ohio$99None
Oklahoma$100$25 (yearly) + $40 annual registered agent fee
Oregon$100$100 (yearly)
Pennsylvania$125$7 (yearly)
Rhode Island$150$50 (yearly) + $400 annual RI corporate tax
South Carolina$110None
South Dakota$165 paper / $150 online$65 paper / $50 online (yearly)
Tennessee$300$300 (yearly)
Texas$300None
Utah$54$18 (yearly)
Vermont$125$35 (yearly)
Virginia$100$50 (yearly)
Washington$200$70 (yearly)
West Virginia$100$25 (yearly)
Wisconsin$170$25 (yearly)
Wyoming$100$60 (yearly)

Operating Agreement

Typical costs: $0 to $200

An operating agreement is an internal document that describes how your LLC will be run, the roles and contributions of the owners (members) and the way decisions will be made.

Anyone can create an operating agreement on their own for free. But when you are doing something like dividing profits and losses amongst ownership, you want to get professionals involved to make sure everything is done correctly. Legal service providers can handle the task for anywhere between $50 to $200, or you can hire a local lawyer. It’s a small cost to pay to ensure everyone is on the same page and avoid future disputes.

Publication

Typical costs: Varies based on state and local newspapers’ rates therein

Entrepreneurs in New York, Nebraska or Arizona are subject to additional LLC costs in the form of publication. In short, LLCs in these states have to publish notices for a specified period of time in one or more newspapers across one or more cities or counties.

StateLength of RunTypical Cost
ArizonaDaily, for three consecutive weeksVaries by newspaper
NebraskaDaily, for three consecutive weeksVaries by newspaper
New YorkSix consecutive weeksVaries by newspaper, but includes a $50 filing fee with the state

EIN Application

Typical costs: $0

An EIN application is used to apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is a unique nine-digit number assigned to businesses and other entities for tax purposes.

You can apply for your EIN through various channels, including online or by fax or mail with the Form SS-4. The online application is the most preferred and efficient way to get an EIN.

Applying for an EIN requires specific details about your business, such as its legal name and address, entity type, names of member(s), Social Security numbers and business activity. Once the IRS approves, an EIN will be assigned. If done online, the approval is instant.

Acquiring an EIN is free, with applications being accepted directly by the IRS website. You can pay a small fee to use an authorized third-party service provider to apply for you if you wish. Be mindful when applying for your EIN that accurate and up-to-date information is provided when filling out applications to avoid potential compliance issues in the future.

DBA Fees (if Using)

Typical costs: $10 to $100

DBA, which stands for Doing Business As, is a trade name a business uses that differs from its legal one. Every state has a different application and filing fee for a DBA. These fees can consist of:

  • Filing fee
  • Publication costs
  • Renewal fees
  • Notary fees

In addition to the initial registration fees, getting a DBA may require additional business licenses, which can add to the total of how much it costs to set up an LLC. If you want exclusive rights over the name of your DBA beyond its local area, trademark registration might be worth exploring, which requires separate fees at both federal and state levels.

Specific information regarding the cost of a DBA can be found on your secretary of state’s website or business registration office website.

LLC Costs: Maintenance

Once you’ve registered, you’ll have to take care of LLC costs associated with maintaining it. This includes state and federal taxes, reporting fees and the cost of any services used to maintain the LLC.

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Taxes

Typical costs: Varies from state to state

Like any other person or entity, LLCs are subject to taxation. The federal government doesn’t take its cut directly from the LLC. Rather, it’s collected from the profits of the owners as a pass-through income. But LLCs can write off certain startup costs—up to $5,000—including attorney fees, market research, office space, equipment and so on.

Most states tax LLC profits in the same way as the federal government—profits pass through to members’ personal tax returns. However, some states also have mandatory LLC franchise taxes. For example, the franchise fee in Delaware is $300, while California has a minimum $800 annual franchise tax.

At the state government level, LLCs may also be subject to reporting fees. Reporting fees are variable from state to state, but average somewhere around $100 a year.

Registered Agents

Typical costs: $0 to $300

A registered agent is the main point of contact between the LLC and the state. The registered agent accepts service of lawsuits and other legal documents and can accept office mail. Any adult can be a registered agent, so long as they reside in the state in which the LLC is registered and are available during business hours. This lack of restrictions means that businesses don’t have to endure any costs to declare a registered agent. With that said, there are service providers that will serve as your registered agent for $100 to $300 per year.

Business License Fees

Typical costs: Varies depending on the type of license

Costs associated with a business license for an LLC can depend on many factors. Below are some factors that affect the costs associated with LLC business license fees:

  • Location
  • Type of business
  • License duration
  • Revenue of your LLC
  • Licensing at multiple levels

Some permits and licenses can be more costly due to complex regulatory requirements or the nature of a business activity. Here are some of the more expensive business licenses:

  • Liquor license: Liquor licenses can be one of the more costly permits, particularly in areas with a high demand for alcohol-related businesses. Their costs can range anywhere from several hundred to several hundred thousand dollars.
  • Casino license: When operating a casino or other gambling establishment, licensing and regulatory costs can quickly amount to millions of dollars depending on your jurisdiction. Take Nevada, for example, which has an Operator of Interactive Gaming License that costs $500,000 for the first two years.
  • Environmental permits: Businesses involved in heavy manufacturing, mining or other industries with substantial environmental impacts may require costly environmental permits for compliance with environmental regulations, and costs can add up over time.
  • Healthcare facilities: Establishing and operating healthcare facilities such as hospitals or nursing homes often involve extensive licensing fees and strict regulatory compliance requirements.
  • Transportation and trucking: Commercial transport companies that run large fleets of trucks need various permits and licenses that incur fees and compliance costs that add up quickly.

To accurately assess your LLC’s license fees, contact your local city/county government and state business regulatory agency. They can provide details regarding required licenses, associated costs and any special requirements unique to your type of business.

Annual Report Fees

Typical costs: $10 to $800

State filing fees are the primary cost associated with annual reports, and they vary significantly by state, from as little as zero to several hundred dollars or even more depending on an LLC’s revenue or number of members. Be mindful of your annual report due date in your state. Missing this deadline can incur late fees, penalties, administrative dissolution or the rescission of your limited liability protection.

If you need to update your LLC’s information, you may be required to amend it with its annual report or file an amendment. Changes such as hiring a new registered agent, shifting member structure or updating the business address could all incur separate fees.

Foreign LLCs registered outside their home state may need to file annual reports in both jurisdictions where they qualify as foreign LLCs. Each state has different filing fees associated with this process.

If your LLC falls out of good standing due to failure to file annual reports and you decide later to reinstate it, additional reinstatement fees may need to be considered.

Frequently Asked Questions (FAQs)

What are the benefits of filing an LLC?

Many entrepreneurs set up LLCs because they are often more affordable than corporations with some liability protection. For instance, LLC finances are treated as separate from individual assets. They’re also typically treated as pass-through tax entities, allowing you to claim them on your taxes. The exceptions are LLCs whose members choose to be taxed as corporations.

What kind of tax flexibility does an LLC provide?

LLCs can be taxed as sole proprietorships, partnerships, C corporations or S corporations. This choice allows members of an LLC to minimize their tax burden.

Is it possible to set up an LLC for free?

While the cost to register an LLC varies by state, there is a fee to register in every state. So, while there are some companies that advertise “free” LLC formation, what this really means is that the company will fill out the LLC paperwork for you for free. But again, you will still be responsible for the state’s filing fee.

What's the fee to register an LLC?

Fees to register an LLC vary depending on the state. It can be as low as $35 in Montana or as expensive as $500 in Massachusetts.

What state has the lowest LLC fees?

These three states have the lowest LLC fees:

  • Montana
  • Kentucky
  • Arkansas

How much is insurance for an LLC?

Most states do not require LLCs to have insurance. However, depending on your type of business, you may want one or more of the following insurances:

  • General liability insurance
  • Professional liability insurance
  • Business interruption insurance
  • Workers’ compensation insurance
  • Directors and officers (D&O) insurance

These insurances can range from hundreds to thousands of dollars depending on your business’s size, location, risk associated with your business and annual revenue.

What's the cheapest LLC filing service?

The cheapest way to file your LLC is to do it yourself through the state’s website. If you are looking for an LLC filing service, fees can vary depending on the services offered. Some of the best options are LegalZoom, ZenBusiness, and Incfile.

How Much Does It Cost To Start An LLC? (2024 Guide) (2024)
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