Cheapest Way to Start an LLC: Everything You Need to Know
Finding the cheapest way to start an LLC is a great way to save some capital when starting your business.3 min read
Updated November 25, 2020:
Cheapest Way to Form an LLCCheapest Way to Start an LLC
Finding the cheapest way to start an LLC is a great way to save some capital when starting your business.
Cheapest Way to Form an LLC
Choosing to form an LLC is one of the first steps you will take when starting a business. Cost is a common factor among business owners.
It can be difficult to account for LLC fee payments when you are just starting out. It is costly to start a business, often exceeding the money you have on hand. It is ideal to find as many cost-saving strategies everywhere possible. Fortunately, some options will allow you to file the necessary documents yourself to help save some money.
LLCs are a business structure that has some taxation benefits on the profits while also allowing some management flexibility that is unlike that of a corporation. If you intend to raise money through investors at some point, it is best to convert your LLC to a corporation, as it is more attractive to investors.
An LLC allows the owner to pass through the burden of taxation to the owner’s personal finances. When an investor invests, he or she does not want that liability.
LLCs let you determine who the members are and who will own what percentage of the business. It is great if you do not want to deal with all of the rigid regulations of a corporation.
There are several advantages of LLCs:
· You will not be responsible for the debts from your business unless the corporate veil is pierced
· There are lax management rules
· You can tailor your startup how you like
· You are only taxed once instead of twice like in corporations
There are also some disadvantages of LLCs:
· The corporate veil is easier to pierce due to unestablished laws
· You may have to pay state franchise fees
Forming an LLC: Do-It-Yourself Way
The least expensive way to form your LLC is filing the forms yourself, although it will depend on the filing fees in your state. Incorporation statements for LLCs are typically the Articles of Organization. The name for these documents will vary from state to state.
You can hire a professional to form your LLC, like a lawyer, for instance. You will be responsible for his or her hourly fees along with the state filing fees.
You can easily save money by taking care of the filing yourself. You can find the forms in your state secretary’s office or on their website.
Your state may off the forms online, and you may even be able to complete the process electronically.
LLC forms are typically very straightforward and simple to complete. You can complete the process online, through email, or regular mail very easily.
Forming an LLC: Use a Legal Assistant
Having an attorney form your LLC can easily cost hundreds of dollars. This is a huge expense for a startup business. To decrease that cost, you can rely on a consultant to help you form your LLC for much less. They specialize in building business structures by streamlining the process, particularly LLCs for as little as $25 plus the cost of your filing fee.
Forming an LLC: Use an Incorporation Service
If you do not want to deal with any paperwork yourself, you can opt to use an incorporation service to create your LLC. Several companies will do this. One thing to remember, however, is that you should only use these services to form your LLC. If you have legal questions or need advice, you should turn to your attorney for accurate information.
Forming an LLC: Cutting Other Costs
In general, once you have filed the Articles of Organization for your business, you are officially ready to go. After you have created your business, there are some additional ways you can save money.
Working from a home office or shop is one great way to save. Renting any equipment you use sparingly is another way to spend less. You can also digitize your documents to eliminate the need for hard copy storage and printing costs.
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