LLC Cost by State: Compare Fees Across the U.S.
Explore LLC costs by state in 2024. Compare filing fees and annual expenses to find the best state to form your LLC. Make an informed decision today. 5 min read updated on December 27, 2024
Key Takeaways:
LLC fees can vary from state to state, starting from $40 to as high as $500 or more.
Kentucky has the cheapest LLC fees while Massachusetts is the most expensive.
Some states have additional benefits like tax credits, flexible regulations that make them a better option for forming an LLC.
You can always use online LLC formation services to simplify the process and minimize the costs of forming an LLC.
As an entrepreneur or a small business owner, there are many ways by which you can legally minimize the risks of running your business–forming an LLC is one of them. Registering your business as an LLC comes with a lot of flexibility, including the protection of your personal assets, credibility, and ease of management.
Typically the benefits of an LLC by state are very similar. However, LLC costs by state can vary, and depending on your location, the annual LLC fees you have to pay may vary as well. Knowing what the exact costs of forming an LLC can help you prepare more carefully when running your business. Let’s find out more.
A Brief Overview of LLC Formation Costs
When forming an LLC, there are typically 4 main expenses that you need to be aware of. These are:
Filing Fees: This is the main expense of forming an LLC. It is paid to the state in order for your business to be established and recognized as an LLC. Depending on the state, LLC fees can range from $35 to $500.
Registered Agent Fees: Most states require a registered agent for an LLC. This agent can be an individual or a business entity who is responsible for legal documents on behalf of your LLC. The costs of registered agent fees can range from $100 to $300 per year.
Annual Report Fees: In some states, if you register your business as an LLC, you may be required to file an annual report, the costs of which vary by state but usually begin around $90. This is the actual annual fee of an LLC, and in some states, it may be called annual certificate, annual registration fee, etc.
Costs of Forming An LLC: A State-By-State Comparison
To help you get an idea of how LLC costs by state can vary, below is a comparison table that looks at different states and the costs of forming an LLC there.
State | LLC Filing Fee | LLC Annual Fee |
Alabama | $200 | $100 |
Alaska | $250 | $100 |
Arizona | $50 | $0 |
Arkansas | $45 | $150 |
California | $70 | $800 |
Colorado | $50 | $10 |
Connecticut | $120 | $80 |
Delaware | $90 | $300 |
Florida | $125 | $138.75 |
Georgia | $100 | $50 |
Hawaii | $50 | $15 |
Idaho | $100 | $0 |
Illinois | $150 | $75 |
Indiana | $100 | $50 |
Iowa | $50 | $60 |
Kansas | $160 | $50 |
Kentucky | $40 | $15 |
Louisiana | $100 | $35 |
Maine | $175 | $85 |
Maryland | $100 | $300 |
Massachusetts | $500 | $500 |
Michigan | $50 | $25 |
Minnesota | $155 | $0 |
Mississippi | $50 | $250 |
Missouri | $50 | $0 |
Montana | $70 | $20 |
Nebraska | $100 | $10 or $13 |
New Hampshire | $100 | $100 |
New Jersey | $125 | $75 |
New Mexico | $50 | $0 |
New York | $200 | $9 |
North Carolina | $125 | $200 |
North Dakota | $135 | $50 |
Ohio | $99 | $0 |
Oklahoma | $100 | $25 |
Oregon | $100 | $100 |
Pennsylvania | $125 | $0 |
Rhode Island | $150 | $50 |
South Carolina | $110 | $0 |
South Dakota | $150 | $50 |
Tennessee | $300 | $300 |
Texas | $300 | $0 |
Utah | $54 | $20 |
Vermont | $125 | $35 |
Virginia | $100 | $50 |
Washington | $200 | $60 |
West Virginia | $100 | $25 |
Wisconsin | $130 | $25 |
Wyoming | $100 | $60 |
As you can see from this table, if we take into account both LLC filing fees and the annual cost of an LLC, states like Kentucky, Utah, South Carolina, Wyoming and Arizona are some of the cheapest states to form an LLC.
On the other hand, Massachusetts and California are some of the most expensive states to form an LLC.
However, it’s important to consider the other benefits each state may have for your business. Delaware for instance is known for being one of the best states for entrepreneurs who want to form an LLC, due to flexibility towards taxation, privacy, ownership and management of businesses.
5 Important Factors To Consider When Choosing A State For Your LLC
While LLC costs are definitely important, you should also consider additional factors before choosing where to form your LLC.
Tax Implications
States like Delaware, Wyoming and Florida have low corporate taxes (or no tax at all) which can help you save up on costs in the long run. Other states might charge high corporate taxes which could reduce your profitability.
Flexibility Of Regulations
As we mentioned earlier, states like Delaware are well-known for having laws that encourage entrepreneurship with lots of flexibility in regulations, more privacy, etc. Forming an LLC in a state with flexible regulations can make it easier for you to manage and run your business.
Privacy Protections
Privacy laws are extremely important for any entrepreneurship or small business owner. States that offer greater privacy protection might be a good option for starting your LLC.
Physical Presence Requirements
In some cases, entrepreneurs choose to form an LLC in one state but operate in a different location. If that is your aim, then you need to familiarize yourself with the laws in the state you want to form the LLC, so you know if your physical presence is required for any reason.
Foreign LLC Costs
In some states, if you choose to form an LLC in one state but operate from another, there might be additional charges and costs which could affect your profits.
3 Tips For Reducing LLC Formation Costs
For small business owners, cost-cutting is an important concern. If you want to form an LLC but you are not sure how to minimize the costs, here are some tips:
Choose A State With Low LLC Fees
You can always choose the cheapest states to form an LLC if reducing costs is your primary concern. By using the table we shared above, you can decide for yourself which state would be the best option for you to form your LLC at minimal costs.
Utilize Online LLC Formation Services
There are many online services that can help you form an LLC smoothly and efficiently at an affordable price. The offers usually come as a package that includes registered agent services and document preparation.
Take Advantage Of State-specific Incentives
In addition to low LLC fees, some states may have incentives that can help you cut down on costs for your business, such as tax credits or subsidies. Taking advantage of these incentives can help you minimize the costs of forming an LLC.
Knowing which state you should form your LLC in is a very crucial decision for any entrepreneur or small business owner. By carefully considering your options and weighing the benefits of state-specific incentives against LLC formation costs by state, you can make the right choice for yourself. If you need additional assistance, you can reach out to UpCounsel’s LLC formation lawyers for expert advice and professional guidance.
FAQ
Which state has the cheapest LLC?
Kentucky has the cheapest LLC costs. Other states may include New Mexico, South Carolina, Missouri, Wyoming, Arizona, etc.
What is the most expensive state to form an LLC?
Massachusetts and California are the most expensive states to form an LLC.
What state has the cheapest LLC tax?
Wyoming, Nevada, New Mexico are some of the states with the cheapest LLC tax.
Which state has the lowest tax for LLC?
States with the lowest tax for LLC are Wyoming, Nevada, New Mexico, Delaware and others.
