How Much It Costs To Start An LLC (2022)

What Does It Cost To Start An LLC?

There are several different fees and costs associated with setting up an LLC however, the most expensive part of forming an LLC comes from the fee associated with filing the articles of organization with the Secretary of State, which could run you anywhere from $40-$500, depending on the state you’re filing in.

Different Costs Associated With Starting An LLC

  • Filing Fees – $40-500
  • Registered Agent – $40-$150
  • Operating Agreement – $25-$1000
  • Company Bank Account – $50-$100

State Filing Fee

State filing fees cover both the legal services and the filing fee itself. For legal services, you may expect to pay around $50 depending on the state. An additional $40 to $500 accounts for the articles of organization filing fee and is usually where the bulk of LLC startup costs come from.

As a piece of advice, you may want to consider hiring an attorney or seek help from a legal service to reduce the possibility of improper filing, which could lead to more fees and wasted time in the future.

Registered Agent

A registered agent is someone who is in charge of sending and receiving court filings, fee payments, etc. to ensure you don’t lose your status as an LLC. They usually cost anywhere from $40 to $150 however, you could elect to take care of this step yourself or appoint someone from the company to act as the registered agent, which would save you on this cost.

LLC Operating Agreement

An Operating Agreement essentially governs how the LLC will be run as far as the daily operations go.

It covers things like the responsibilities of employees, how finances will be handled and distributed, chain of command, the decision-making process, and more.

You have the option to come up with an operating agreement on your own, purchase a downloadable template from the internet, or have a lawyer draft one up for you.

Depending on the type of business you have, and the method you choose, the total cost could range anywhere between $25-$1000

This step will ultimately decide how your business is ran on a daily basis, so it is important to seek proper help if this is your first time drafting something of this nature.

Company Bank Account

Another cost you’ll need to consider is the cost of setting up a company bank account. This can be a bit pricey, as most banks will charge you between $50 and $100 to open an account.

You’ll also need to factor in the cost of business insurance, which is typically around $300 per year.

Maintenance Fees

You’ll need to pay ongoing LLC maintenance fees. These fees go towards things such as keeping your LLC registered with your state and making sure that your businesses paperwork is up to date.

The cost of these fees will vary depending on your state, but they typically range from $50 to $200 per year.

Taxes

The typical taxes paid by LLCs as part of their maintenance costs are:

  • Franchise Tax
  • Annual Report Fees

Franchise Tax

LLCs can be taxed in many different ways, depending on the state. In some cases, they may have to pay a yearly tax that is often called franchise fees. The franchise tax is usually a flat tax but can change according to what your annual earnings are.

Annual/Biennial Report

This is a report that includes the name, address, and ownership of the LLC. The annual report fee varies depending on the state.

Additional Costs and Fees

There are some additional costs that could come with starting an LLC such as obtaining additional business licenses/permits in your state, paying a publication fee, a name reservation fee, and a fictitious name fee.

These additional fees are not required in every state.

Business Licenses and Permits

Depending on the industry of your business and where it’s located, there may be some additional state or local licensing fees that you’ll need to pay for. This also goes for any business structure you may form in the future.

Publication Fee

States such as Arizona, Nebraska and New York require new LLCs to publish something called a statement of formation in a local newspaper.

Publishing this could cost anywhere from $40 to $2000 depending on the state you’re filing in.

Name Reservation Fee

Alabama is the only state that requires LLCs to reserve their name with them for a fee that ranges from $10-$28. Every other state is optional.

Fictitious Name Fee

Also referred to as a DBA or ‘doing business as’ name. This fee is ultimately up to whether the business owner wants to have multiple brands under the same LLC or not.

Is It Expensive to Start an LLC?

Overall, the cost of starting and maintaining an LLC can range anywhere from a few hundred dollars to a few thousand dollars per year. But this is a small price to pay for the legal protection and peace of mind that an LLC can provide.

ZenBusiness makes starting an LLC easy and affordable. Check out our ZenBusiness LLC review to see if it would be a suitable option for you.

How Much It Costs To Start An LLC By State

State Startup Cost Maintenance Costs
Alabama $200+ Annual Privilege License
Alaska $250 $200 Biennially
Arizona $50 + Publishing Requirement No yearly fees
Arkansas $50 $150 per year
California $70 $20 Biennially + Annual Franchise Tax
Colorado $50 $10 per year
Connecticut $120 $20 per year
Delaware $90 $300 Annual Franchise Tax
District of Columbia $220 $300 Biennially + Annual Franchise Tax
Florida $125 $138.75 per year
Georgia $100 $50 per year
Hawaii $50 $15 per year
Idaho $100 No Annual Fee
Illinois $150 $250 – $300 per year
Indiana $95 $50 Biennially
Iowa $50 $30 – $45 Biennially
Kansas $160 $50 – $55 per year
Kentucky $40 $15 – $30 Annually + Annual Entity Tax
Louisiana $100 $30 per year
Maine $175 $85 per year
Maryland $100 $300 per year
Massachusetts $500 $500 per year
Michigan $50 $25 per year
Minnesota $155 Annual Partnership Tax
Mississippi $50 No Yearly Fee
Missouri $50 No Yearly Fee
Montana $70 $20 per year
Nebraska $100 + Publishing Requirement $10 – $13 Biennially
Nevada $75 $125 per year
New Hampshire $100 $100 Annual + Annual Enterprise Tax
New Jersey $125 $50 per year
New Mexico $50 No Annual Fee
New York $200 + Publishing Requirement $9 Biennial + Annual Filing Fee
North Carolina $125 $200 per year
North Dakota $135 $50 per year
Ohio $99 Annual Commercial Activity Tax
Oklahoma $100 $25 per year
Oregon $100 $100 per year
Pennsylvania $125 + Publishing Requirement No Annual Fee
Rhode Island $150 $50 per year
South Carolina $110 No Annual Fee
South Dakota $150 $50 per year
Tennessee $300 Minimum Annual Franchise & Excise Tax
Texas $300 Yearly Fee
Utah $70 $20 per year
Vermont $125 $35 per year
Virginia $100 $50 per year
Washington $180 – $200 $60 per year
West Virginia $100 $25 per year
Wisconsin $130 – $170 $25 per year
Wyoming $100 – $102 $50 or 0.02% value of assets per year

Knowing the difference between an LLC and an S Corp is essential. Check out our article on LLCs vs. S Corps before you form your business into an LLC.

Related Articles

Table of Contents

Find our articles helpful?

Join our newsletter to receive notifications on posts!

Get Trending Business Advice Delivered Straight To Your Inbox

Receive bi-weekly emails on business, side hustles, and book takeaways