LLC Costs by State: Everything You Need to Know
LLC costs by state are the typical costs associated with forming your LLC and there are two costs to consider when forming an LLC.3 min read
LLC costs by state are the typical costs associated with forming your LLC in any given state. When you are considering how much forming an LLC costs, keep in mind that there are two costs to consider. First, you will need to consider the start-up costs. Second, you will need to consider the ongoing cost for maintaining your LLC.
You might also need to pay fees to an attorney or tax professional if you have legal or tax-related questions that are too complex or confusing to learn or take care of on your own. Furthermore, you might pay for a professional company to help you form your LLC. For example, there are many professional companies that offer their services for ease of business formation. If you use any of the above-mentioned professionals, then additional costs should be taken into consideration.
LLC Formation Costs Broken Down
Note that there are various fees associated with creating your LLC. While a majority of states charge an average of $100 for filing the Articles of Organization, some states charge far more than the rest. And while costs can vary, most states require that the LLC file an annual report. Therefore, before forming your LLC, ensure that you visit the Secretary of State website to see if the state requires you to file this report. Other names for this report can include: annual certificate, annual list of members, annual registration fee, biennial statement/report, decennial report, periodic report, etc.
Keep in mind that if you fail to file any required LLC ongoing documentation, then you will risk your company being involuntarily dissolved by your state. Being reinstated can be time consuming and costly.
Some states charge very low filing fees, including Arizona, Mississippi, Arkansas, Georgia, Hawaii, Idaho, Kentucky, Michigan, and Montana.
- Arizona and Mississippi charge a $50 filing fee and no annual fee
- Arkansas charges a $50 filing fee and a $150 annual fee
- Georgia charges a $100 filing fee and a $50 annual fee
- Hawaii charges a $50 filing fee and $15 annual fee
- Idaho charges a $100 filing fee and no annual fee
- Kentucky charges a $40 filing fee and a $15 annual fee
- Michigan charges a $50 filing fee and a $25 annual fee
- Montana charges a $70 filing fee and a $20 annual fee
Some state charge very high fees; these states include California, Delaware, Massachusetts, Nevada, New York, Tennessee, Texas, and Washington, D.C.
- California charges a $70 filing fee but an annual fee of $800
- Delaware charges a $90 filing fee and a $300 annual fee
- Massachusetts charges a $500 filing fee along with another $500 annual fee
- Nevada charges a filing fee of $75 but an annual fee of $500
- New York charges a higher filing fee of $300 but a very low annual fee of only $9
- Tennessee charges a filing fee of $300 along with another $300 annual fee
- Texas charges a higher filing fee of $300 but has no annual fee
- Washington, D.C. charges a $220 filing fee as well as a $300 annual fee
Rules for Forming an LLC
There are several rules to keep in mind when forming your LLC. Most importantly, your business name must be unique from any other business name that is currently in use. Furthermore, your name must include the LLC business designator, i.e. LLC, L.L.C., Limited Liability Co., etc. Lastly, your name cannot include prohibited terms, such as Bank, Insurance, School, University, FBI, CIA, Presidential, etc.
Once you have chosen your business name, you must file an Articles of Organization with the Secretary of State’s office. This document includes basic business information, such as your business name/address, registered agent name/address, the names of all members and ownership percentages, and a description of your business.
After you’ve completed this document, you will need to find out if you are required to obtain any business licenses or permits. Regulations differ; you might have to obtain a license on the federal, state, and local level depending on the industry in which you operate.
Thereafter, you should draft an Operating Agreement to identify important decision-making processes of the business. This should include voting rights, membership duties and roles, percentage of ownership, buy-sell provisions, and other significant items.
If you need help learning more about the costs of forming an LLC, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5-percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with, or on behalf of companies like Google, Menlo Ventures, and Airbnb.