Overall Guide to LLC costs
Starting an LLC is a sound decision if you’re a small business owner or individual entrepreneur who wants to scale your business. In comparison to sole proprietorships and similar business structures, limited liability companies provide better personal assets and limited liability protection. It also makes sense for tax purposes in many states as LLCs are exempt from corporate profit taxes, and you are only liable for personal income tax.
However, like any business structure, starting an LLC comes with its own set of filing costs. The following guide will explain how much it costs to start an LLC.
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The cost to form an LLC varies significantly depending on your state, ranging from $35 to $500 for the state filing fee alone. Beyond the filing fee, there are ongoing costs to consider, including annual reports, registered agent fees, and potentially franchise taxes. This guide breaks down every LLC cost so you can budget accurately, whether you are forming your LLC on your own or using a formation service.
LLC Filing Fees by State
Every state charges a one-time filing fee to form an LLC. Most states also charge an annual or biennial fee to keep your LLC in good standing. Here is a complete breakdown for all 50 states and Washington D.C.:
| State | Filing Fee | Annual/Biennial Fee |
|---|---|---|
| Alabama | $208 | $100/year (minimum business privilege tax) |
| Alaska | $250 | $100/biennial |
| Arizona | $50 | $0 (no annual report) |
| Arkansas | $45 | $150/year |
| California | $70 | $800/year (franchise tax) + $20 biennial report |
| Colorado | $50 | $10/year |
| Connecticut | $120 | $80/year |
| Delaware | $90 | $300/year |
| District of Columbia | $99 | $300/biennial |
| Florida | $125 | $138.75/year |
| Georgia | $100 | $50/year |
| Hawaii | $50 | $15/year |
| Idaho | $100 | $0 (no annual report) |
| Illinois | $150 | $75/year |
| Indiana | $95 | $31/biennial |
| Iowa | $50 | $30/biennial |
| Kansas | $160 | $55/year |
| Kentucky | $40 | $15/year |
| Louisiana | $100 | $35/year |
| Maine | $175 | $85/year |
| Maryland | $100 | $300/year |
| Massachusetts | $500 | $500/year |
| Michigan | $50 | $25/year |
| Minnesota | $155 | $0 (no annual fee) |
| Mississippi | $50 | $0 (no annual report) |
| Missouri | $50 | $0 (no annual report) |
| Montana | $70 | $20/year |
| Nebraska | $100 | $10/biennial |
| Nevada | $75 | $350/year (annual list + business license) |
| New Hampshire | $100 | $100/year |
| New Jersey | $125 | $75/year |
| New Mexico | $50 | $0 (no annual report) |
| New York | $200 | $9/biennial |
| North Carolina | $125 | $200/year |
| North Dakota | $135 | $50/year |
| Ohio | $99 | $0 (no annual report) |
| Oklahoma | $100 | $25/year |
| Oregon | $100 | $100/year |
| Pennsylvania | $125 | $70/biennial (decennial report) |
| Rhode Island | $150 | $50/year |
| South Carolina | $110 | $0 (no annual report) |
| South Dakota | $150 | $50/year |
| Tennessee | $300 | $300/year |
| Texas | $300 | $0 (franchise tax report, no fee if under $2.47M revenue) |
| Utah | $54 | $18/year |
| Vermont | $125 | $35/year |
| Virginia | $100 | $50/year |
| Washington | $200 | $60/year |
| West Virginia | $100 | $25/year |
| Wisconsin | $130 | $25/year |
| Wyoming | $100 | $60/year |
The cheapest states to form an LLC include Kentucky ($40), Arkansas ($45), and several states at $50 (Arizona, Colorado, Hawaii, Iowa, Michigan, Mississippi, Missouri, New Mexico). The most expensive states are Massachusetts ($500), Tennessee ($300), and Texas ($300).
Ongoing LLC Costs
Beyond the one-time formation fee, there are several recurring costs to keep your LLC in good standing.
Registered Agent Service ($39-$299/year)
Every LLC must have a registered agent — a person or service that receives legal and government documents on behalf of your LLC. You can act as your own registered agent for free, but most business owners hire a professional service for privacy and convenience. Professional registered agent services typically cost $39 to $299 per year. Our top recommendation is Northwest Registered Agent at $125/year (or $39/year when bundled with their formation service).
Annual Report Fees ($0-$500/year)
Most states require LLCs to file an annual report (sometimes called a periodic report, annual statement, or statement of information). The report updates the state on your LLC’s basic information, such as your address, members, and registered agent. Filing fees range from $0 (in states that do not require annual reports, like Arizona and New Mexico) to $500 (Massachusetts). Failing to file your annual report can result in penalties, late fees, and eventually administrative dissolution of your LLC.
Franchise Tax ($0-$800+/year)
Some states impose a franchise tax on LLCs regardless of whether the LLC earns any income. The most notable is California, which charges an $800 annual franchise tax. Delaware charges a $300 annual tax. Texas charges a franchise tax, but LLCs earning under $2.47 million in revenue owe $0. Check your state’s specific requirements, as franchise taxes can significantly increase your annual costs.
Business Licenses and Permits (Varies)
Depending on your industry and location, you may need one or more business licenses or permits. Costs vary widely based on your city, county, state, and type of business. Common licenses include a general business license ($50-$400), a professional license (varies by profession), a home occupation permit ($0-$100), and industry-specific permits. Check with your city and county clerk’s office for local requirements.
Optional LLC Costs
These costs are not required to form an LLC but may apply depending on your situation.
Operating Agreement ($0-$200)
An operating agreement is an internal document that outlines how your LLC is managed, how profits are distributed, and what happens if a member leaves. You can create one yourself for free using online templates, or you can hire a lawyer or use an online legal service to draft one ($50-$200). Some LLC formation services include a basic operating agreement template with their packages.
EIN ($0)
An Employer Identification Number from the IRS is completely free. You can apply online at the IRS website and receive your EIN immediately. See our complete EIN guide for step-by-step instructions. Be cautious of third-party websites that charge a fee to file this free application on your behalf.
DBA / Doing Business As ($10-$100)
If you want to operate your LLC under a name different from its legal name, you need to file a DBA (also called a fictitious name, trade name, or assumed name). For example, if your LLC is registered as “Smith Holdings LLC” but you want to do business as “Smith Consulting,” you would file a DBA. Costs range from $10 to $100 depending on your state and county.
Business Insurance (Varies)
While not required in most cases (except for workers’ compensation if you have employees), business insurance provides an additional layer of protection beyond your LLC’s liability shield. General liability insurance typically costs $300 to $1,000 per year for small businesses. Professional liability insurance (errors and omissions) costs vary by profession.
LLC Formation Service Costs
If you prefer not to handle the filing process yourself, an LLC formation service can prepare and submit your documents for you. Here is how the top services compare:
| Service | Formation Price | Registered Agent | Key Features |
|---|---|---|---|
| Northwest Registered Agent | $39 + state fee | Included (1 year free) | Privacy protection, no upsells, address used on public filings |
| ZenBusiness | $0 + state fee | $199/year (add-on) | Worry-free compliance, operating agreement template, fast filing |
| Bizee | $0 + state fee | $199/year (add-on) | Free formation, accounting consultation, business tax consultation |
| LegalZoom | $0 + state fee | $249/year (add-on) | Well-known brand, access to attorneys, compliance calendar |
While ZenBusiness, Bizee, and LegalZoom advertise $0 formation fees, keep in mind that they do not include registered agent service in their base packages. When you add a registered agent ($199-$249/year), the total first-year cost is higher than Northwest Registered Agent, which includes a full year of registered agent service for just $39 total. For most people, Northwest Registered Agent offers the best overall value.
Total First-Year LLC Cost
Here is what you can expect to pay in your first year, depending on how you form your LLC:
| Expense | DIY (Do It Yourself) | Using a Formation Service |
|---|---|---|
| State filing fee | $35-$500 | $35-$500 |
| Formation service fee | $0 | $0-$39 |
| Registered agent (year 1) | $0 (act as your own) | $0-$249 |
| EIN | $0 | $0 |
| Operating agreement | $0 (use a free template) | $0-$200 |
| Annual report (if due year 1) | $0-$500 | $0-$500 |
| Total estimated first-year cost | $35-$1,000 | $35-$1,500 |
Most common scenario: If you form your LLC in a state with an average filing fee (around $100), use Northwest Registered Agent ($39 for formation + registered agent), and get a free EIN from the IRS, your total first-year cost will be approximately $139 plus the state filing fee, which comes to roughly $239. This covers everything you need to get started.
For the most affordable approach, form your LLC in a low-cost state (like Kentucky at $40), act as your own registered agent, and handle all filings yourself. Your total cost would be just the state filing fee.
Frequently Asked Questions
What is the cheapest state to form an LLC?
Kentucky has the lowest LLC filing fee at $40. Other affordable states include Arkansas ($45), Arizona ($50), Colorado ($50), Hawaii ($50), Iowa ($50), Michigan ($50), Mississippi ($50), Missouri ($50), and New Mexico ($50). However, forming your LLC in a different state from where you live and do business usually means you will need to register as a foreign LLC in your home state, which adds costs. For most people, forming in your home state is the most cost-effective choice.
Is there a yearly fee for an LLC?
Most states require LLCs to file an annual report and pay a fee to remain in good standing. These fees range from $0 to $500 per year depending on the state. Some states, like Arizona, Mississippi, Missouri, and New Mexico, do not require annual reports. A few states charge biennial (every two years) fees instead of annual ones.
Can I form an LLC for free?
No. Every state charges a filing fee to form an LLC. The lowest fee is $40 (Kentucky). While some LLC formation services advertise “$0” formation, they are waiving only their service fee — you still pay the state filing fee. You will also likely want to budget for a registered agent service and other ongoing costs.
How much does a registered agent cost?
Professional registered agent services typically cost $39 to $299 per year. Northwest Registered Agent charges $125/year for standalone registered agent service or $39/year when bundled with formation. You can also act as your own registered agent for free, but this means your personal address becomes public record, and you must be available at that address during all business hours to accept legal documents.
Do I need a business license for my LLC?
It depends on your business type and location. Many cities and counties require a general business license. Certain industries (such as construction, food service, healthcare, and real estate) require specific professional licenses or permits. Check with your local city and county clerk’s office to determine what licenses you need.
Are LLC formation services worth it?
For most people, yes. A good formation service ensures your documents are filed correctly, acts as your registered agent, and helps you stay compliant with state requirements. The cost is minimal — Northwest Registered Agent charges just $39 plus the state fee, which includes a full year of registered agent service. The time and peace of mind you save is well worth the small investment.
What happens if I do not pay my LLC annual fees?
If you fail to file your annual report or pay required fees, your state may impose late penalties, revoke your LLC’s good standing status, or administratively dissolve your LLC. A dissolved LLC loses its legal protections, including limited liability. In most states, you can reinstate a dissolved LLC by filing the overdue reports and paying penalties, but this costs more than simply staying current with your filings.
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