LLC Filing Fee: Everything You Need to Know
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. 3 min read
2. What Are LLC Startup Costs?
3. Is Forming an LLC Cost Effective?
4. Why Would I Pay Anyone More Than Just State Fees to Form My LLC?
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.
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.
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.
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
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.
If you need help with an LLC filing fee, 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.