Key Takeaways

  • LLC filing fees vary significantly by state, typically ranging from $40 to $500.
  • In addition to formation fees, states may charge publication fees, name reservation fees, and annual maintenance fees.
  • Certain states impose extra requirements like publishing a notice of formation or appointing a registered agent.
  • LLC costs extend beyond state fees and may include legal assistance, expedited processing, and optional services like operating agreement drafting.
  • It's important to factor in recurring costs like annual reports or franchise taxes when evaluating the total LLC cost.

An LLC filing fee will be required when an LLC is formed. The cost will vary based on different factors.

How Much Does an LLC Cost?

When forming an LLC versus a sole proprietorship or a partnership, the disadvantage is that a filing fee will need to be paid when the Articles of Organization is submitted. There are two different kinds of costs to keep in mind when figuring out how much an LLC costs. The first is any startup costs, while the second is ongoing costs.

The minimum startup cost when applying for an LLC includes service and state fees. Each state has different filing fees for LLCs. These can also change without notice, particularly when a state needs to raise more money. Fees for additional services and expertise may need to be paid in addition to the state costs.

State-by-State LLC Filing Fees

The cost to form an LLC varies widely depending on the state. For example, the filing fee in Kentucky is as low as $40, while Massachusetts charges $500. Some states also require you to appoint a registered agent or publish a notice of formation, which can further increase the total cost. Below is a sample range:

  • Alabama – $200 (county + state)
  • California – $70 filing + $800 annual franchise tax
  • Florida – $125
  • Illinois – $150
  • Nevada – $425 (includes business license and initial list)
  • New York – $200 + publication cost (can exceed $1,000 in NYC)
  • Texas – $300

Keep in mind that these are just the formation fees. Ongoing compliance costs, such as annual report fees or franchise taxes, are additional.

What Are LLC Startup Costs?

All LLCs need to choose a name that isn't currently being used in the state the business plans on applying to. The name also needs to include "L.L.C." or "LLC." The availability of the name will need to be confirmed with the Secretary of State before the LLC is officially formed. Every state has its own requirements for LLC names. 

It is necessary to file the Articles of Organization with your state in order to form an LLC. This document may also be called a certificate of formation or certificate of registration. 

At the state level, the government agency is normally involved. Examples of this include the Division of Revenue in the state of New Jersey or the Secretary of State in the state of Massachusetts. The state of Alabama requires the form to be filed with a county probate judge first before it goes to the Secretary of State. There is always a filing fee for this document, and each state will have its own fees. These can range from $40, such as in Alabama, up to $500, such as in Massachusetts.

Some states allow electronic forms to be submitted and accepted, while other states only accept paper documents. Several states also require LLC owners to publish a notice of intent in order to form an LLC. Certain states, such as New York, have requirements for the statement of formation to be published in at least one newspaper that circulates in the county where the LLC is formed.

The notice needs to appear in the newspaper at least one time a week for a certain number of weeks. This can be expensive depending on how many publications are required. As an example, the state of New York requires that LLCs publish their Articles of Organization once per week in at least two separate newspapers for a total of six weeks. This means the publication fees can be over $1,000 if the LLC is located in New York County.

The cost for this part of forming an LLC can be between $40 to $2,000 depending on the county, state, and how many weeks the run goes for. Once published, an affidavit or certificate of publication needs to be filed with the state. 

An operating agreement is necessary to specify how the LLC will conduct business. This agreement will also state how profits and losses are divided among members. The form isn't normally required to be filed with the state, but it should be kept at the LLC's main business location.

Optional and Hidden Costs of Forming an LLC

Beyond mandatory state filing fees, many entrepreneurs encounter optional costs that can be worthwhile depending on their business needs:

  • Name Reservation Fee: Some states charge $10 to $50 if you wish to reserve your business name before filing.
  • Registered Agent Service: If you don’t use a member of your LLC, third-party services range from $100 to $300 annually.
  • Expedited Filing: States like California and Texas offer same-day or 24-hour processing for an extra $25 to $200.
  • Operating Agreement Assistance: While not required to file, professional help drafting an operating agreement can range from $100 to $1,000.
  • Business Licenses and Permits: Depending on the industry and locality, additional permits may be required, with fees ranging from $50 to several hundred dollars.

Is Forming an LLC Cost Effective?

Creating an LLC can seem like it takes many resources and a good amount of work. However, there are several benefits, which include the following:

  • Peace of mind knowing that all assets are protected from business liability
  • Appropriate payouts and security for each member or partner of the LLC
  • Increased credibility that comes with a formed company, making it easier for LLCs tend to attract investors

Ongoing Costs: Annual Reports and Franchise Taxes

Even after forming your LLC, most states require annual reports or the payment of franchise taxes. These are essential to keep your LLC in good standing:

  • Annual Report Fees: These range from $10 in some states to $500 in states like California (including the franchise tax).
  • Franchise Taxes: States like Delaware and California impose annual minimum franchise taxes. In California, it’s $800/year regardless of income.
  • Late Fees: Missing a filing deadline can result in penalties or suspension of your LLC. Fees can range from $50 to over $250 depending on the state.

Why Would I Pay Anyone More Than Just State Fees to Form My LLC?

There are both advantages and disadvantages to filing the paperwork alone. If the necessary forms aren't filled out in time and the fees are not paid within the required window, the LLC could be invalid despite the company's efforts.

Frequently Asked Questions

  1. How much does it cost to form an LLC?
    It depends on the state, but LLC filing fees generally range from $40 to $500. Additional services and optional filings may increase your total.
  2. Are there recurring fees after forming an LLC?
    Yes. Most states require annual reports or franchise tax payments, which can range from $10 to $800 or more annually.
  3. What’s the most expensive state to form an LLC in?
    States like Massachusetts and California have among the highest combined filing and annual fees, with additional publication costs in New York.
  4. Can I form an LLC without a lawyer?
    Yes, but if you're unfamiliar with the legal requirements, you may benefit from legal assistance, especially for complex businesses.
  5. What are hidden LLC costs I should prepare for?
    Name reservations, expedited processing, registered agent services, and business licenses can all add to your total LLC cost.

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