How Much Does It Cost to Form an LLC? A Complete, In-Depth Guide to State Fees, Annual Costs, and Total Expenses

 

How Much Does It Cost to Form an LLC? A Complete, In-Depth Guide to State Fees, Annual Costs, and Total Expenses

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Forming an LLC is one of the smartest decisions small business owners can make—offering liability protection, tax flexibility, and professional credibility. But how much does it actually cost to form an LLC?

The answer varies widely depending on your state, your business needs, and whether you choose optional add-on services.

This complete guide breaks down every cost associated with forming and maintaining an LLC, including:

  • State filing fees

  • Annual report and franchise tax costs

  • Registered agent fees

  • Optional service fees

  • EIN, Operating Agreement, and startup costs

Use this as your go-to resource for budgeting your LLC formation.

1. State Filing Fees: The Core Cost of Forming an LLC

Every state charges a fee to file Articles of Organization (also called Certificate of Formation or Certificate of Organization). This is the official step that legally creates your LLC.

LLC Formation Filing Fees by State

Below are the most common filing fees (approximate ranges as they regularly update):

State Filing Fee
Kentucky $40
Arkansas $45
Arizona $50
Mississippi $50
Iowa $50
Colorado $50
Hawaii $51
Michigan $50
New Mexico $50
Missouri $50
Louisiana $100
Texas $300
Tennessee $300 (min)
Illinois $150
Florida $125
Georgia $100
North Carolina $125
Ohio $99
Nevada $425 (includes business license fee)
California $0 to file (through 2025), but $800 yearly tax

Typical filing cost range:

➡️ $40 – $300 (some states higher)

This is your baseline cost to form an LLC.

2. Annual LLC Costs: Reports and Franchise Taxes

Once your LLC is formed, each state has ongoing yearly fees. These typically include:

Annual Report Fees

States require a regular report (annual or biennial) to keep your LLC active.

Range: $0 – $300 per year

Examples:

  • Florida Annual Report: $138.75

  • Texas Public Information Report: $0

  • California Statement of Information: $20

  • New York Biennial Report: $9

Franchise Taxes

Some states require an annual or minimum franchise tax.

Examples:

  • California: $800/year minimum

  • Texas: Franchise tax only if revenue exceeds threshold

  • Delaware: $300/year for LLCs

  • Tennessee: Based on net worth, minimum $100

Typical annual LLC cost range:

➡️ $0 – $800 per year

3. Registered Agent Fees

Every LLC must maintain a registered agent with a physical in-state address.

Options:

  • Serve as your own agent (free)

  • Use a professional registered agent service

Typical cost for a professional service:

➡️ $99 – $300 per year

Why many business owners choose a registered agent:
✔ Privacy (keeps your personal address off public records)
✔ Guarantees availability during business hours
✔ Helps you stay compliant
✔ Accepts legal mail reliably

4. Optional LLC Formation Costs

These aren’t required but are often purchased.

✔ Operating Agreement

Even if not required by your state, you need one.

Cost:

  • Self-written template: Free

  • Online legal service: $20–$150

  • Attorney drafted: $300–$2,000

✔ EIN (Employer Identification Number)

Getting an EIN directly from the IRS is free.

However, services charge anywhere from $50–$100 to obtain it for you.

✔ Name Reservation (Optional)

Most states allow you to reserve your LLC name before filing.

Cost:
➡️ $10 – $75

Useful if you’re not ready to file yet.

✔ Business Licenses & Permits

Costs vary based on:

  • City

  • County

  • Industry

Typical range:
➡️ $25 – $500 depending on business type

✔ Publication Requirement (Only in Certain States)

Some states (e.g., New York, Arizona) require new LLCs to publish a notice in newspapers.

Example:

✔ LLC Formation Service Fees

If you use a company to file your LLC:

Typical cost:
➡️ $0 – $400 + state filing fees

Popular services charge for:

  • Filing

  • Operating agreement

  • Registered agent

  • Compliance monitoring

5. Total Cost to Form an LLC: What You Should Expect

Here is a realistic estimate based on common expenses:

Bare Minimum Cost (DIY Approach)

Cost Amount
State filing fee $40–$300
Annual fee $0–$300
EIN Free
Operating Agreement Free
Registered Agent $0 (self)

Total startup cost:
➡️ $40 – $300
Annual cost:
➡️ $0 – $300

Average LLC Formation Cost (Most Common Scenario)

Cost Amount
State filing fee $50–$150
Annual report $50–$150
Registered agent $99–$200
Operating Agreement $20–$100
EIN Free
Business licenses $50–$200

Total startup cost:
➡️ $250 – $600
Annual cost:
➡️ $150 – $400

All-In Premium Cost (Attorney or Full-Service Launch)

Cost Amount
State filing fee $40–$300
Lawyer-drafted operating agreement $500–$2,000
Registered agent $100–$300
Business licenses $100–$500
Publication (if required) $60–$1,600

Total startup cost:
➡️ $1,000 – $4,000+

6. Additional Costs to Consider After Forming an LLC

Your LLC may also incur other optional or industry-specific costs:

✔ Business Insurance

General liability, professional liability, workers’ comp, etc.
➡️ $200 – $2,000/year

✔ Accountant or Bookkeeping

For tax filing or compliance.
➡️ $300 – $2,000/year

✔ Website, Domain, Marketing

➡️ $10 – $1,000+ depending on needs

7. Which State Is the Cheapest for LLC Formation?

Cheapest States:

  • Kentucky – $40

  • Arkansas – $45

  • Arizona – $50

  • New Mexico – $50

  • Colorado – $50

But remember:
You should form your LLC where you operate—not in the cheapest state.

Otherwise, you'll end up paying foreign LLC registration fees in your home state too.

8. Which State Is the Most Expensive?

Most Expensive States:

  • California – $800 annual tax

  • Massachusetts – $500 annual report

  • Tennessee – $300+ filing, annual franchise tax

  • Nevada – $425 initial filing, $350 annual list, $200 license

These states have the highest ongoing costs.

Final Thoughts: How Much Does It Cost to Form an LLC?

Here’s the summary:

Startup Costs:

➡️ $40 – $300 (state filing fee)
➡️ Optional services may add $100 – $1,000+

Annual Costs:

➡️ $0 – $800+ depending on your state

Total realistic budget to form an LLC:

➡️ $250 – $600 for most small businesses
➡️ More if using attorneys or premium services

Forming an LLC is usually affordable—and the liability protection, tax flexibility, and professional credibility are well worth the cost.

Get Free Consultation with FormLLC

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