LLC Cost By State: Everything You Need to Know
LLC cost by state refers to the fees required by each state for starting a Limited Liability Company (LLC).3 min read
2. Foreign LLC Registration Fees
How Much Does It Cost to Form an LLC?
The fee a state charges to file an LLC's Articles of Organization is the primary cost of starting an LLC. Each state decides on the size of this fee, but they range from $40 to $500. You'll want to check the Secretary of State website for the state in which you plan to start your business to find out what fees are charged.
It is required in some states for LLCs to announce their formation in their local newspapers, so this fee for publication is another potential startup cost that ranges from $40 to $2000. The following states have specific requirements for this publication:
- New York
The state of Alabama requires all LLC startups to reserve their desired name for their business which costs between $10 and $28. Other states allow name reservations, but they don't require it.
LLCs should be formed in the same state that the owners plan to do business. It is possible to do business in states outside of where the business was formed, but this requires extra fees and paperwork.
These formation fees are all initial costs for forming an LLC, but there are also some continual costs required in order to maintain a status of good standing for your business with the state. These fees frequently include costs for annual and biennial reports, plus state taxes like franchise taxes.
Annual and biennial reports must be submitted by LLCs in many states with a varying fee. These documents will include the following information:
- Business name updates
- Address updates
- Ownership updates
Franchise taxes are required by some states, usually as an annual flat tax. Sometimes the tax is fixed, and sometimes it is proportional to the business's yearly revenue.
If business owners want some extra help forming their LLC, they can pay for a professional service which will save them time but also add to startup costs.
Depending on the service you choose, you can receive help with:
- Forming your LLC
- Finding a registered agent
- Forming an operating agreement
- Contacting the IRS for an EIN (Employer Identification Number)
- Finding out which licenses your business will need
- Kits including high-quality corporate papers and seals to help your business feel a little more official
Plenty of help is also available online, free of charge, when you're ready to form an LLC.
Foreign LLC Registration Fees
If a business owner originally formed their LLC in one state but wants to be able to conduct business in a different state, they must complete a Foreign LLC Registration or a Foreign LLC Qualification.
The fee for this type of registration varies from state to state, but the average cost is $186.
States like Michigan, Missouri, and Hawaii charge only a $50 fee, while Texas and South Dakota charge $750. Check the Secretary of State's website in your state of choice to find out what they charge for Foreign LLC Registration.
The names for these registration forms also vary, but they are usually known as one of the following:
- Application for Registration of Foreign LLC
- Foreign LLC Registration
- Application for Certificate of Registration of Foreign LLC
- Application for Registration
- Certificate of Registration of Foreign LLC
- Foreign Registration Statement
- Application for Admission to Transact Business
- Certificate of Authority
- Statement of Foreign Qualification to Conduct Activities
Foreign and Domestic LLCs simply refer to the states in which they were formed and have nothing to do with countries outside of the United States. A Foreign LLC is a company that is conducting business outside of its original state of formation where it is called a Domestic LLC. If an LLC formed in Florida wants to conduct business in Virginia and Texas, it will need to register as a Foreign LLC in each of those states.
If the owner of an LLC wants to do business in a state outside of their home state, they'll want to check the new state's rules and regulations on the topic. Different states define "conducting business" in different ways, so they'll want to be sure they are operating within the state's legal limits. Contacting a business attorney is always a good idea when wanting to make sure regulations are being followed.
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