How Much Does It Cost to Start an LLC?
Business Law
Deciding to form an LLC is usually the easy part — figuring out what it’ll actually cost tends to raise more questions, especially since the number you’ll see quoted online varies so much depending on where you’re forming the business and how you go about it. Here’s a general breakdown of where the money actually goes.
The core, unavoidable cost is the state filing fee to submit your Articles of Organization (sometimes called a Certificate of Formation), which officially creates the LLC with your state’s government. This fee varies significantly by state — some states charge less than $50, while others charge several hundred dollars, and a small number sit even higher. Because this fee is set by each individual state, it’s one of the first things worth checking specifically for the state where you’re forming the LLC.
Beyond the initial filing fee, most states also require an ongoing fee to keep the LLC in good standing, often called an annual report fee or franchise tax, due every year or every other year depending on the state. Some states charge a flat fee for this, while a few — most notably a handful of states with franchise tax systems — calculate it based on revenue or other factors, which can make ongoing costs considerably higher for larger businesses. Forgetting or missing this recurring fee can eventually result in the state administratively dissolving the LLC, so it’s an important cost to budget for beyond just the initial setup.
Several optional costs commonly come up during formation, depending on how someone sets things up. Using a registered agent service (required in every state, but which some owners choose to hire out rather than serve themselves) typically adds an annual fee. An operating agreement — while not always legally required, and something many people draft themselves using templates — is sometimes drafted with attorney help for more complex ownership structures, adding legal fees. Reserving a business name before filing, obtaining a “doing business as” (DBA) name if operating under a different name than the LLC’s legal name, and obtaining any required business licenses or permits can each add their own separate fees depending on the industry and location.
Many people also use an online business formation service or an attorney to handle the filing itself, which adds a service fee on top of the state’s actual filing fee. These services range from relatively inexpensive basic filing packages to more expensive options that bundle in registered agent service, operating agreement templates, and compliance reminders. Filing the paperwork directly with the state yourself avoids this extra fee entirely, and for a straightforward, single-member LLC, many owners find the state filing process manageable without outside help.
Because these numbers vary so much by state — and because ongoing fees matter just as much as the initial cost — it’s worth looking up your specific state’s current filing fee and annual/biennial fee directly through the state’s Secretary of State (or equivalent) website before budgeting for an LLC.
State Filing Fees
The state fee to form an LLC varies widely depending on where you file. Your state’s business filing office lists the current amount, and it is the best place to confirm it.
Ongoing Costs to Plan For
Many states require annual or periodic reports with their own fees. You may also need a registered agent, which can be a service with a yearly cost.
Optional Costs
Some owners choose to pay an attorney or filing service, or to set up a business bank account and insurance. These are not always required, but they are worth budgeting for.
Frequently Asked Questions
Is the LLC filing fee the only cost I need to budget for?
No. Most states also require an ongoing annual or biennial fee to keep the LLC active, and there may be additional costs for a registered agent, licenses, or optional legal help.
Do I need a lawyer to form an LLC?
Not necessarily, especially for a simple, single-member LLC — many people file directly with the state or use an online formation service, though more complex ownership structures may benefit from legal guidance.
What happens if I don’t pay the annual LLC fee?
Missing required ongoing fees can eventually lead to the state administratively dissolving the LLC, so it’s important to track and budget for these recurring costs, not just the initial filing fee.
Do I pay the fee every year?
It depends on the state. Some charge only at formation, while others charge ongoing annual or biennial fees.
Can I form an LLC myself?
Often yes. Many people file directly with the state, though some prefer help with the operating agreement or other details.
Are there fees for changing my LLC later?
Changes such as updating a name or address can carry small fees. Check your state’s filing office for current amounts.
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