How Much Does It Cost to Get an LLC?

17 Min Read
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Last updated September 13, 2022
Written by Dmytro Kondratiev
Editor, lawyer
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LLCs are very popular across the US for the protections they offer to the business owners and the flexibility they ensure for the company. Yet, before your venture starts generating profit, you should invest in its establishment and setup. 

Setting an LLC for your startup up and running is not free of charge and entails certain costs. Some of those expenses are mandatory and others are optional, so your grand total will depend on the scope of aspects and features you include in your formation list. 

How much does an LLC cost? To save you the trouble of guessing and make preliminary calculations clearer and easier for you, below, we’ll make a comprehensive breakdown of LLC-related charges and rates.

How Much Does It Cost to Start an LLC: Your LLC Formation Alternatives

The LLC creation process is quite straightforward and comprehensible. Yet, the cost to create an LLC largely depends on the formation method you choose. Basically, you have three options:

  • Filing on your own: It’s the most affordable way to follow since you’ll have to pay only compulsory fees and optional charges you deem necessary while establishing your company;
  • Engaging an attorney: Lawyers are normally paid on an hourly basis. To let a legal advisor do the job for you, get ready to pay over $1000 above the must-have fees and options you choose;
  • Hiring a professional service: It’s a sweet spot between a time- and effort-consuming DIY method and expensive attorney services. On average, the dedicated LLC company’s cost will fall between $100 and $300 depending on the scope of service you seek.

Whatever way you form your LLC, there are certain obligatory costs you’ll have to pay anyway and optional fees appropriate for different business situations, scenarios, and plans. 

How Much Does It Cost to Get an LLC: Mandatory Fees

While starting an LLC is easy, it’s not free of charge even if you decide to do all the job on your own. You’ll incur certain expenses and your final cost to form an LLC will largely depend on the mandatory fees that vary by state. They fall into direct formation charges and ongoing costs that will occur on a regular basis to maintain your LLC’s legitimacy and good standing with the state. Let’s look into each category of expenses in more detail. 

Formation Costs

At the stage of registering your LLC, you might be exposed to the following costs depending on the locality and industry you are going to operate your entity in.

State Filing Fee 

Technically, filing an LLC is about getting the Articles of Organization reviewed and approved by the state regulator. Once your LLC statute is approved and your company data appear in the state registry and public databases, your legal entity is considered officially formed. 

The main aspects to consider here are as follows:

  • This service comes at a fixed fee, which is state-specific and is a must to pay for all LLCs. Filing fees across the US range from $40 to about $500. Besides, the fee might vary taking into account the filing method you choose. Online filings are normally the most affordable while mail or walk-in filings are usually from 10% to 50% more expensive;
  • Each state has a standard processing time which varies from same-day filings in some states to a few weeks in others. Hence, some states offer expedited state processing that is normally payable. Should you choose this service when placing an LLC registration application, you’ll have to add the cost of express processing to your filing fee;
  • In certain states, LLC regulations require the organizers’ signatures to be verified by a notary. The cost of verification is from $2 to $20 per signature;
  • State filing fees are non-refundable. So, should your application be rejected, you won’t get your money back. The most common reason for registration denial is an inappropriate business name. Make sure to check the desired moniker availability before filing and paying the state fees. 

How Much Does It Cost For LLC to Pay Publication Fee

There are a few US states that call for LLCs to share information about their registration with the public via publications in local printed media. Normally, you’ll have to make three consecutive publications in a local newspaper if you want to create LLC.

There are only three states in the US that have a publication requirement in place:

  • Arizona,
  • Nebraska,
  • New York. 

So, if you are going to form LLC in one of these states, get ready to pay from about $300 to over $1000. The final cost is dependent on the specific registration requirements and advertising rates valid in your locality. 

Thus, New York is the most expensive in this concern among the three states. Since you’ll have to make publications within 120 days after formations and publish info in two newspapers, you’ll end up paying $1200 or even more.

General Business License Fee

Nearly all LLCs are exposed to some type of business license to lawfully operate on the market of a certain jurisdiction. There are LLC licenses issued at a federal, state, and local level (city, town, county). You might need more than one license or permit. Normally, it’s determined by the type of activity you are involved in and the locality your run your business in. 

Though all those licenses are referred to as business licenses, they are different from a general business license. As the name suggests, the latter is a sort of generic permission required for any business to operate within a specific jurisdiction. With a general license in place, your LLC will be considered non-compliant there. 

This type of license is issued either by the Secretary of State or by the Department of Revenue. It’s not associated with a certain industry and is required in the following US states:

  • Alabama calls for a Business Privilege License for every entity or person doing any type of business in the state. Since it’s issued by the county office, the price varies by county within the state;
  • In Alaska, a business license is required for any entrepreneurial entity. It’s issued by the Alaska Department of Commerce, Community, and Economic Development at $50;
  • Filing an LLC in Delaware, you should register for a general business license on the state OneStop business portal. There, you’ll be able to add, modify, and renew licenses online;
  • To transact business in Hawaii, you’ll have to get a General Excise Tax license, which costs $20;
  • The state of Maine also has a general license requirement in place and the corresponding permissive document is to be issued by the municipal office;
  • In Maryland, you should submit for a general business license after registering with the taxation department;
  • Once provided by the tax department, a general business license in Nevada is now issued by the Secretary of State;
  • Tennessee enterprises with sales exceeding $10.000 should obtain a standard business license while those with a lower turnover could acquire a minimal activity license. All docs are provided by the county clerk’s office;
  • To legally operate your business in Washington, you’ll have to contact the business licensing service of the state to get a general license. 

How Much Does It Cost for an LLC to Get Other Licenses and Permits

Licensing is a very sensitive issue for all LLCs since most likely than not, you’ll need some permissive documents for your entity and there is no one-size-fits-all solution in licensing. The best option if you want to file LLC is to perform a license search or hire a professional service to do it for you to get a complete list of licenses your need for your LLC. This way, you’ll be able to calculate your licensing expenses with maximum accuracy. 

In the meantime, the most common types of business licenses and permits for an LLC beyond the general business license include the following:

  • Seller’s permit or sales and use license if you are involved in commercial activity;
  • Licenses associated with the type of industry you operate in. The cost might vary from about $50 to a few hundred or even thousands;
  • Occupational or professional licenses to provide services as a certified specialist in a certain area. Usually, the license price varies from $40 to $500;
  • Food, liquor, or tobacco licenses to sell and distribute alcohol, food, or tobacco products accordingly;
  • Health licenses to provide healthcare services or keep up with certain hygienic requirements;
  • Building licenses for those who plan to get involved in construction and change the intended use of land. 

Licensing fees greatly vary, so it’s advisable that you get a list of licenses and permissions for your LLC first along with the list of corresponding government agencies and authorities you should contact for registration. Then, you’ll be able to find out all the related fees. 

Ongoing Costs

Once you have set up LLC, there will be a number of compliance requirements to observe and regular fees to pay. Typically, those are to be paid either annually or biennially. 

Annual Report Fee

An annual or statutory report is a document LLCs should file with the state on an annual or biennial basis if you want to make an LLC legally compliant with the state. Generic by nature, it covers basic company info you’ve submitted to the Secretary of State when registering your entity: 

  • The document is aimed at maintaining your publicly available business data up to date by reflecting any changes or modifications your company’s managerial or ownership structure could undergo within a year or a two-year period;
  • Most states do have reporting requirements (with only a few exceptions to them) and these reports are meant to maintain the LLCs’ compliance status and keep their liability protections in force;  
  • The average cost of annual report filing lingers at around $100 per year, yet, the rates are state-specific and might deviate from that average fee.

Franchise Tax

A franchise tax is a sort of annual LLC charge payable no matter if your business gains profit or suffers losses. Should you fail to make payment, you’ll put your LLC at the risk of involuntary dissolution initiated by the state authorities. 

Similar to filing rates, franchise tax rates largely vary across the US hitting the lower marks of $100 and higher marks above $800. 

License Renewal Fees

Though most states don’t have law requirements on general business licenses, it doesn’t mean you won’t need licenses. Nearly any LLC will need some sort of license to operate in its jurisdiction. 

Licenses are legal documents issued by the state authorities to verify that you run your business in full compliance with all current regulations and don’t breach any laws related to the type of activity you are engaged in. 

Yet, licenses are not issued once and for all. You’ll have to renew them annually or every two years. Renewal fees are usually lower than registration fees and still greatly vary by state. Thus, one state will renew your license for $20 while another will charge nearly $300 for the same job. 

Cost of Forming LLC: Optional Fees

Optional costs are those you can avoid or add to your list of LLC expenses if you deem necessary. Some of them are minor while others really bring value. 

Name Reservation

As we’ve already mentioned, checking your desired business name before filing your formation docs is of utmost importance. And should the moniker you’ve set your eyes on appear to be available, you can put it on hold. 

In most states, you can reserve a future company name for a period of up to 120 days to have enough time to finish all preparations before filing your LLC statute. It’s a really great option to have and the reservation price of $10 to $50 is well worth it.   

Registered Agent 

A registered agent is a law requirement for LLC formation. However, the agent rules are very simple:

  • It could be any adult over 18 years of age or a legal entity with a registered address or entitled to do business in the state of formation;
  • An agent should be consistently present under its registered address during business hours;
  • You can appoint almost any regular person or even serve your own registered agent. 

By hiring a third party, you’ll have to pay for their services. Yet, this option has a lot of good about it, especially if you employ a dedicated company for that purpose. Not only will it save you the trouble of handling this function on your own but also it will ensure the agent’s job is done professionally and your business mail is under complete control. 

Professional services are available under an annual subscription that costs from $100 to $300 on average. 

Operating Agreement Draft

An Operating Agreement is a company bylaw and is optional for LLCs in most states. However, given the document’s importance since it helps regulate business operations and outline internal business rules, you’d better have an Operating Agreement in place. 

Operating Agreement content is not limited to some specific points, though, there are common provisions normally covered by this instrument. How simple or complex the document will mostly depend on your business scenario and structure. 

Basically, you have a few options for getting an Operating Agreement:

  • You can compile it on your own free of charge;
  • You can buy a ready-made template from one of the legal databases for about $50 to $200;
  • You can delegate that task to an attorney, which might be of use if you have a complex business scenario. In this case, though, get ready to pay from $300 to a few thousand dollars per document;
  • LLC services offer customizable forms of an Operating Agreement you can get at about $100 and tailor to your needs. 

Filing a DBA

In the US, you have an option to run your business under a name different from your registered company name that appears in your LLC statute and should be used for all legal purposes. 

For market purposes, though, you can choose a different moniker. Since you can have multiple DBAs under a single LLC structure, this will help you set up different brands or launch different product or service lines without getting into the hassles of running multiple LLCs. 

To be lawful, a DBA or fictitious name requires filing either at a state or at a county level. Filing fees also vary by locality and range from $20 to $200. 

EIN Application

LLCs need Employer Identification Numbers or Federal Tax IDs for many purposes. An EIN is required to:

  • Open a business bank account;
  • Hire workers;
  • Pay certain taxes;
  • Apply for corporate tax status. 

Many formation services offer payable EIN registration. Yet, if you choose to apply on your own, you’ll find out that it’s issued by the IRS free of charge and will cost you nothing. So, don’t let anyone fool you and it will save you $50 to $80. 

LLC Cost by State

At this point, it’s obvious that, though there is a more or less unified formula for LLC cost calculations, the final cost will be different for a different state. Hence, let’s take a look at how much it will cost to open an LLC in each state. 

StateFiling FeeAnnual Report
Alabama$200$100
Alaska$250$100 (biennially) 
Arizona$150None
Arkansas$50$150
California $90$800 
Colorado $50$10
Connecticut$120$80
Delaware$90$30
Florida$125$138.5
Georgia$100$50
Hawaii$50$15
Idaho$100None
Illinois$150$75
Indiana$90$30 (biennially)
Iowa$50$60 (biennially)
Kansas$165$50
Kentucky$40$15
Louisiana$75$30
Maine$175$85
Maryland$100$300
Massachusetts$500$500
Michigan$50$25
Minnesota$135$0 (though report is required)
Mississippi $50$0 (though report is required)
Missouri$105None
Montana$70$20
Nebraska$100$10 (biennially)
Nevada$75$350
New Hampshire$100$100
New Jersey$125$75
New Mexico$50None
New York$200$9 (biennially)
North Carolina$125$200
North Dakota$135$50
Ohio$99None
Oklahoma$100$25
Oregon$100$100
Pennsylvania$125$70 (once per 10 years)
Rhode Island$150$50
South Carolina$110None
South Dakota$150$50
Tennessee$300$300 – $3000
Texas$300None
Utah$70$20
Vermont$125$35
Virginia$100$50
Washington$200$60
West Virginia$100$300 (biennially)
Wisconsin$130$25
Wyoming$100$60

How Much Does an LLC Cost: Conclusion

While an LLC brings a lot of benefits both to the business and to its owner, hence its popularity, you’ll have to invest money in setting up the legal entity to start your entrepreneurial activity on the right foot. 

LLCs do come at a cost, yet, those costs greatly vary by state and locality where you are going to initiate your business. Thus, some states appear to be more expensive than others. Besides, if you decide to hire an assistant to help you out with LLC formation or add some payable extras to your formation list, all of this will further bump up the final cost of your LLC.  

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