If you’re looking to start an LLC, you must know the cost of an LLC formation. What are the costs involved and the similarities between them, as well as differences? Let’s learn in detail.
An LLC is a great way to start your own business, but you have many hurdles and challenges that come with the territory.
For starters, one of those tasks would be figuring out how much it’ll cost for forming an LLC. In other words, what is the state filing fee – which can range anywhere from around $40 all the way up to thousands depending on where in America or Canada you live or you’re DIY or hiring an LLC Services?
Important: Mostly, the cost to form a limited liability company (LLC) is taken as the state filing fee. In this case, the fee mostly ranges between $40 to $500, depending on your state. If you don’t want to see yourself in all this mess, hire a professional LLC service like ZenBusiness ($0 plus state filing fee).
The Limited Liability Company (LLC) formation cost depends upon the method you adopt while setting up your LLC. Following are the three methods of LLC formation arranged in the lowest to highest cost order.
- Doing it yourself (DIY)
- Using online LLC formation services
- Hiring an attorney
In the DIY method, you just need to pay the state fees while using online incorporation you get your LLC registered at a fraction of the cost. However, forming an LLC using attorney services could cost you a fortune. Let’s dig into the detailed cost to set up an LLC by each method.
Formation Cost of an LLC by Doing it Yourself (DIY)
The main LLC formation cost by this method is the fee you pay to file your Articles of Organization with the state. However, depending upon the type of business and the state where you tend to operate your business, there are some additional expenditures. We discuss each of them in the subsequent section.
LLC Set Up Cost Breakdown (Cost by State)
| State | LLC Article of Organization Fees (One time) | LLC Annual Report Fees (Ongoing) | LLC Annual State Tax (Ongoing) |
| LLC Alabama | $200 AL LLC Filing fee | $100-$200 (due annually) | 6.5% of net taxable income, if LLC is taxed as a corporation. |
| LLC Alaska | $250 AK LLC Filing fee | $100 for domestic LLCs $200 for foreign LLCs (due biennially) | No personal income tax, no sales, and use tax. For more info click here. |
| LLC Arizona | $50 AZ LLC Filing fee+ Publishing Requirement | $0 (no annual filings) | 4.9% of net taxable income, if LLC is taxed as a corporation. |
| LLC Arkansas | $45 or $50 AR LLC Filing fee | $150 (due annually) | Depends on how LLC has chosen to be taxed. For more info click here. |
| LLC California | $70 +$20 CA LLC Filing fee | $20 (due biennially) | $800 Annual Tax. |
| LLC Colorado | $50 CO LLC Filing fee | $10 (due annually) | 4.63% of net taxable income, if LLC is taxed as a corporation. |
| LLC Connecticut | $120 CT LLC Filing fee | $80 (due annually) | $250 biennial Business Entity Tax (BET). |
| LLC Delaware | $90 DE LLC Filing fee | $0 (no annual filings) | $300 annual tax due annually. |
| LLC District of Columbia | $220-$320 DC LLC Filing fee | $300 (due biennially) | 8.25% of net taxable income. |
| LLC Florida | $125 FL LLC Filing fee | $138.75 (due annually) | Depends on how LLC has chosen to be taxed. For more info click here. |
| LLC Georgia | $100 GA LLC Filing fee | $50 (due annually) | 6% of net taxable income, if LLC is taxed as a corporation |
| LLC Hawaii | $50 HI LLC Filing fee | $12.50-$15 (due annually) | 4.4% to 6.4% of net taxable income if LLC is taxed as a corporation. |
| LLC Idaho | $100-$120 ID LLC Filing fee | $0 (no annual filings) | 7.4% of net taxable income, if LLC is taxed as a corporation plus an additional $10. |
| LLC Illinois | $150 IL LLC Filing fee | $75 (due annually) | 1.5% for LLCs not elected to be taxed as corporations, if an LLC is taxed as a corporation then 5.25% of federal taxable income and personal property replacement tax at a rate of 2.5% of net income. |
| LLC Indiana | $95-$100 IN LLC Filing fee | $32-$50 (due biennially) | 4.9% of net taxable income, if LLC is taxed as a corporation. |
| LLC Iowa | $50 IA LLC Filing fee | $45-$60 (due biennially) | Depends on how LLC has chosen to be taxed. For more info click here. |
| LLC Kansas | $160-$165 KS LLC Filing fee | $50-$55 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Kentucky | $40 KY LLC Filing fee | $15 (due annually) | If LLC is taxed as a corporation it has to pay 4% of federal taxable income (with state-specific adjustments) plus a 3% surtax on taxable income above $50,000. |
| LLC Louisiana | $100 LA LLC Filing fee | $30-$35 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Maine | $175 ME LLC Filing fee | $85 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Maryland | $ 100 MD LLC Filing fee | $300 (due annually) | 8.25% of net taxable income, if LLC is taxed as a corporation. |
| LLC Massachusetts | $500 MA LLC Filing fee | $500-$520 (due annually) | 8% of net taxable income, if LLC is taxed as a corporation. |
| LLC Michigan | $50 MI LLC Filing fee | $25 (due annually) | 6% of net taxable income, if LLC is taxed as a corporation. |
| LLC Minnesota | $135-$155 MN LLC Filing fee | $0 (the report is due annually) | 6% of net taxable income, if LLC is taxed as a corporation, additional or alternative taxes may also apply, for more info click here. |
| LLC Mississippi | $50 MS LLC Filing fee | $0 (the report is due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Missouri | $50-$105 MO LLC Filing fee | $0 (no report required) | 6.25% of net taxable income, if LLC is taxed as a corporation. |
| LLC Montana | $70 MT LLC Filing fee | $20 (due annually) | 6.75% of net taxable income, if LLC is taxed as a corporation. |
| LLC Nebraska | $100-$110 NE LLC Filing fee + Publishing Requirement | $10-$13 (due biennially) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Nevada | $425 NV LLC Filing fee | $350 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC New Hampshire | $100 NH LLC Filing fee | $100 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC New Jersey | $125 NJ LLC Filing fee | $ 75 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC New Mexico | $50 NM LLC Filing fee | $0 (no report required) | Typically $50 per year if LLC is taxed as a corporation. Other state levels of taxes depend on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC New York | $200 NY LLC Filing fee + Publishing Requirement | $9 (due biennially) | $25-$4500 (depends on net income) |
| LLC North Carolina | $125 NC LLC Filing fee | $200- $202 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC North Dakota | $135 ND LLC Filing fee | $50 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Ohio | $99 OH LLC Filing fee | $0 (no report required) | 15.3% self-employment tax if LLC is a pass-through entity. The minimum tax amount is $150 if LLC is taxed as a corporation. For more info click here. |
| LLC Oklahoma | $100 OK LLC Filing fee | $25 (due annually) | 6% of net taxable income, if LLC is taxed as a corporation. |
| LLC Oregon | $100 OR LLC Filing fee | $100 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Pennsylvania | $125 PA LLC Filing fee | $70 for domestic LLCs (due decennially) and $520 for foreign LLCs (due annually) | 9.99% of net taxable income, if LLC is taxed as a corporation. |
| LLC Rhode Island | $150 RI LLC Filing fee | $50 (due annually) | Those LLCs do not choose to be taxed as corporations pay an annual tax of $400. If LLC is taxed as a corporation, it has to pay 7% of net income with a $400 minimum tax. |
| LLC South Carolina | $110 SC LLC Filing fee | $0 (no annual report requirement unless LLC is taxed as an S-Corp) | 5% of net taxable income, if LLC is taxed as a corporation. |
| LLC South Dakota | $150-$165 SD LLC Filing fee | $50-$65 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Tennessee | $300-$3,000 TN LLC Filing fee | $300-$3,000 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Texas | $300 TX LLC Filing fee | $0 (no report required) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC Utah | $70 UT LLC Filing fee | $20 (due annually) | 5% of taxable income with a minimum tax of $100, if LLC is taxed as a corporation |
| LLC Vermont | $125 VT LLC Filing fee | $35 (due annually) | Minimum $250 business entity tax (BET) if LLC is not taxed as a corporation. Otherwise, the tax rate depends upon net income |
| LLC Virginia | $100 VA LLC Filing fee | $50 (due annually) | 6% of net taxable income, if LLC is taxed as a corporation. |
| LLC Washington | $180-$200 WA LLC Filing fee | $60 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
| LLC West Virginia | $100 WV LLC Filing fee | $25 (due annually) | 6.5% of net taxable income, if LLC is taxed as a corporation. |
| LLC Wisconsin | $130 WI LLC Filing fee | $25 (due annually) | 7.9% of net taxable income, if LLC is taxed as a corporation. |
| LLC Wyoming | $100 WY LLC Filing fee | $60 (due annually) | Depends on net income and how LLC has chosen to be taxed. For more info click here. |
One Time Costs to Set Up an LLC
Filing Articles of Organization (Mandatory)
To legally establish your LLC in any state in the U.S., you need to file a document usually called articles of organization, aka “certificate of formation” or “certificate of organization”.In most states, you file this document with the Secretary of State.
Depending upon the state, the certificate of formation fee ranges from $40 (Kentucky) to $500 (Massachusetts). Moreover, some states charge you an article of organization fee depending on the number of LLC members eg: single-member LLC or multi-member LLC
Publication Fees
Currently, only three states named Arizona, Nebraska, and New York made it mandatory for new LLCs to publish a statement of formation in an approved local newspaper. Depending on your state’s requirements, county, and newspaper, the publishing cost can be between $40 and $2000.
Reserving an LLC Name (Optional)
If you plan to file your LLC in the coming months and fear someone might take the name you want to operate with, you can reserve that name in almost all states.
But, first, you need to choose a name to identify your LLC that has not been taken or is too similar to existing LLCs. Usually, you can reserve a name for two months by filing a name reservation application.
Not every LLC has to reserve a name before filing articles of organization. Reserving an LLC name is purely optional. The cost range can vary from $10 to $50.
Filing a Fictitious Business Name (Optional)
A fictitious Business Name is also known as Doing Business As (DBA). If you wish to operate your company under a name other than your or any other member’s legal name, you need to file a DBA. This is purely optional; you can use your name if you want.
To use a DBA, you must file an application and pay a filing fee. Depending upon the state of business operation, you:
- File a single state-wide application with the Secretary of State or
- File an application at the county level in every county where you have a business office
Moreover, some states require you to publish your fictitious name in a legal newspaper. The total cost ranges from $10 to $200 or more.
Acquiring a Business License (Depends Upon the State)
In many states, such as Washington, you are required to get a state-wide business license for your LLC. However, most states have local license requirements.
Moreover, many city or county governments also made it obligatory for businesses to have business licenses. You are most likely to spend $50 to $100 to obtain a business license.
Ongoing Costs of Running an LLC
After the LLC registration, you’ll have to pay ongoing fees to run in a compliant manner and keep your business in good standing with your state and local government.
Failure to pay these fees may result in the termination of your LLC in the state.
Minimum Annual LLC Taxes
In many states, you have to pay state business tax, aka franchise taxes. Moreover, you may have to pay state employer tax, sales and use tax, etc.
The LLC annual tax depends on the LLC’s total revenue, your payable federal income tax, how your LLC is taxed such as disregarded entity (sole proprietorship), S Corp, or C Corp, or whether you have registered your LLC as a domestic LLC or foreign LLC, etc.
The tax amount depends on the type of business, whether you have employees, and how much your LLC earns. In most states, on average, you have to pay $100 to $400 as LLC annual tax. However, some states have very high tax rates, such as California, where you have to pay $800 per year.
Annual/ Biennial Report Fees
To keep the LLC’s contact information up-to-date, LLCs in most states need to make a filing every one or two years with the Secretary of State. This filing is often called a statement of information, or annual (or biennial) report, or a periodic report.
Most states have a processing fee for the annual report, usually $0 to $3,000. However, on average, the LLC annual report fee is $100. Moreover, the filing requirements vary from state to state.
Registered Agent Fees (Optional)
A registered agent is a person or business entity designated by your LLC to receive service of process notices, government correspondence, official mail, and other compliance-related documents on behalf of your business.
An employee, spouse, relative, lawyer, friend, or other trusted person can also serve as a registered agent. This helps your business stay compliant by informing you of legal notices or sending you reminders of annual report filing or other important deadlines.
Since the registered agent’s address comes in the public record while registering an LLC, for privacy purposes, many LLC owners prefer to hire a professional registered agent company.
These registered agent services charge you $100 to $300 on an annual basis and, in return, serve for state correspondence on your business’s behalf while protecting your privacy.
Business License Renewal Fees
Local or state business licenses are to be periodically renewed, mostly on an annual basis. The license renewal fees are usually $20 to $100.
Cost of Forming an LLC Using Online LLC Formation Companies
Many entrepreneurs do not have time for the DIY option for LLC formation and are unwilling to spend hundreds of bucks on hiring an attorney for this task. For these business owners, online LLC formation companies are the best option.
The basic formation packages of these LLC services usually start from as low as $49, such as ZenBusiness LLC service, while some cost you a lot compared to the features they offer in the basic plan. You can read this review to compare the features and pricing of the top 6 LLC formation services available online.
Final Words
There is no doubt that creating your LLC yourself is the cheapest option, but completing all the paperwork and filing them yourself can be complicated and stressful.
Hiring an attorney is another option, but you must be ready to spend hundreds, if not thousands, of dollars. So, professional LLC companies may be the most suitable option to save time, money, and mental peace.
Aisha Noreen is an owner of a small business with more than 9 years of experience in the marketing industry. With the wisdom of an old soul, she always seeks innovation and mind-blowing ROI techniques. Her unique approach helped many small businesses thrive and she can surprise you in many ways as well. Believe it or not, her energy, passion, and creativity are contagious enough to transform your business and take it to another level.