The Cheapest Way to Form an LLC in 2025 (And What to Avoid)

Forming an LLC (Limited Liability Company) is one of the best ways to protect your personal assets and establish a professional business structure. However, many new entrepreneurs overpay for LLC formation without realizing they can set one up for a fraction of the cost. In this guide, we’ll break down the cheapest ways to form an LLC in 2025, highlight hidden fees to avoid, and show you how to keep costs as low as possible while still getting all the legal protections you need.

 

Why You Shouldn’t Overpay for LLC Formation

Many business owners get tricked into paying for services they don’t need, such as expensive registered agent fees, unnecessary operating agreements, and overpriced legal filings.

The truth is, you can legally form an LLC for as little as $50 to $300, depending on your state. If you follow the right steps, you can avoid costly mistakes and get your LLC up and running without unnecessary fees.

 

Step 1: Understanding the Real Costs of an LLC

Before discussing the most affordable options, it’s important to understand the required costs versus the optional add-ons.

1. State Filing Fee (Required) – $50 to $300

Every state charges a mandatory LLC filing fee to process your registration.

• Cheapest States: Kentucky ($50), Arkansas ($50), and New Mexico ($50).
• Most Expensive States: Massachusetts ($500), Tennessee ($300), and California ($70 plus an $800 annual tax).

If you are starting a remote business and don’t need to register in a specific state, you might consider forming your LLC in a state with lower fees. Check out our state-specific LLC guide.

State LLC Guides

2. Registered Agent Fee (Optional) – $0 to $150 per year

A registered agent receives official legal documents on behalf of your business. Many companies charge $100 to $150 per year for this service, but you can act as your own registered agent if you have a physical address in the state where your LLC is registered.

3. Operating Agreement (Optional) – Free to $99

An Operating Agreement outlines how your LLC is managed. Some states require one, but you can easily find free templates online instead of paying $50 to $100 for one.

4. EIN (Employer Identification Number) – Free

The IRS provides EINs for free, yet some services charge $75 to $100 to “help” you get one. Applying for an EIN takes five minutes on the IRS website and costs nothing.

 

Step 2: The Cheapest Ways to Form an LLC in 2025

Now that you understand the costs, let’s look at the most affordable ways to form your LLC.

Option 1: File the LLC Yourself (Cheapest Method) – $50 to $300

If you want to save the most money, file your LLC directly with your state’s Secretary of State website.

Here’s how:

1. Visit your state’s business registration website.
2. Fill out the Articles of Organization form.
3. List yourself as the registered agent to avoid extra fees.
4. Use a free Operating Agreement template if required.
5. Apply for an EIN for free on the IRS website.

This method avoids unnecessary fees, but you’ll need to handle all the paperwork yourself. Some state websites can be difficult to navigate, so be prepared to spend time figuring out the process.

Option 2: Use a Low-Cost LLC Formation Service – $0 to $50 + State Fees

If you don’t want to deal with the paperwork, an affordable LLC formation service can handle the process for you at little to no cost beyond your state’s filing fee.

Some of the best low-cost LLC services include:

 

 

These services make forming an LLC fast and simple, but many of them will try to upsell you unnecessary add-ons, so read carefully before purchasing anything extra.

Option 3: Hire a Business Lawyer (Most Expensive) – $500 to $2,000

If your business has a complex structure or you need legal advice, you might consider hiring a lawyer. However, for most small businesses, this is unnecessary.

Using an attorney is only recommended if:

• You have multiple LLC members and need a custom agreement.
• You plan to raise venture capital or issue shares.
• Your business involves high-risk liability (healthcare, finance, etc.).

For most entrepreneurs, an online legal service like LegalZoom can provide the necessary documents at a fraction of the cost.

 

Step 3: What to Avoid When Forming an LLC

There are many unnecessary fees that first-time business owners fall for. Here’s what to avoid:

• Paying for an EIN – The IRS provides EINs for free. Apply directly through the IRS website.
• Overpaying for a Registered Agent – If you have a U.S. address, list yourself as the registered agent to avoid extra fees.
• Expensive Operating Agreements – Many websites charge for these, but you can find free templates online.
• Rush Filing Fees – Most states process LLC applications quickly without needing extra payment for “expedited” services.
• Unnecessary Business Licenses – Not all businesses need a state or local license, so check before paying for one.

 

Final Thoughts: The Best Strategy for a Cheap LLC Formation in 2025

If you’re looking for the cheapest way to form an LLC, follow this plan:

1. File your LLC yourself through your state’s website.
2. Be your own registered agent to avoid extra fees.
3. Use a free Operating Agreement template if needed.
4. Apply for your EIN directly with the IRS for free.

This method ensures you only pay the required state filing fee and skip all unnecessary costs.

If you want a formation service to handle everything for you, Bizee (formerly Incfile) is the best free LLC service that only requires you to pay the state fee.

 

Which Option Is Best for You?

• If you’re comfortable handling paperwork, filing yourself is the cheapest option.
• If you want help but don’t want to overpay, use an affordable LLC formation service.
• If you need legal advice, use an online legal service instead of hiring a lawyer.

By avoiding unnecessary costs and hidden fees, you can legally form your LLC without spending more than you need to.