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If you’re a budding entrepreneur, forming an LLC (or similar corporate structure) is the first step in the quest to establish your business as a legitimate and professional entity.
Although LLCs are recognized around the United States, each state has its own rules and regulations associated with this business structure.
How confusing! Never fear: I am here to help.
I will provide a brief overview of LLC fee types, discuss filing fees by state, and provide you with the steps necessary to start an LLC of your own.
As a new or seasoned business owner, it is vital that you keep track of all expenses – including necessary ones for your LLC status.
You may find some surprising fee information as you keep reading, but I will guide you through this process.
With Northwest Registered Agent, you can start an LLC, hire a registered agent, and maintain state-to-state business compliance.
Quick Overview of LLC Fees
An LLC, or limited liability company, is a business structure that is often adopted by small businesses looking for personal liability protection and tax advantages.
To start an LLC, you may need to submit payments for several different types of fees.
In general, LLC fees are a combination of various business practices and financial decisions that accumulate over the life of an LLC.
Check out the list below for descriptions and average costs associated with each fee:
Filing fees
Filing fees are different in each state. For example, despite Delaware’s favorable incorporation laws and taxation protocols, they have one of the highest filing fees in the country.
Expect to spend anywhere from $50-500, but always check with your state’s website before filing and sending a check.
Operating agreement
Operating agreement fees can be associated with forming an LLC.
If you use legal services or other assistance, you may pay greater fees than those who do not use those services.
More conservative estimates are around $50.
Registered agent
A registered agent is required to form an LLC and may expect an annual fee.
These fees can cost up to $300, depending on the level of assistance required.
Additionally, some states require that you hire a registered agent who practices in that state, which can incur additional yearly fees.
Business license and permits
Business licenses and permits are dynamic in terms of cost between state governments.
Business licenses can cost a few hundred dollars, especially if you choose to file for multiple at the same time.
Annual reports
Business license costs and expectations are different for each state.
Also, depending on how many licenses you require, or the types of licenses you need, your fees can range from a few dollars to a few hundred dollars.
Publication
Some states may expect a notice of formation once the LLC is established, which can cost around $20.
However, many states do not require this.
DBA fees
If your business name is different from your registered LLC title, you may have to create a “Doing Business As” (or DBA) name.
These added name changes may incur additional fees of no more than $100.
LLC Filing Fees by State
Filing fees for LLC formation are different in each state, which can create confusion.
To consolidate all of this information, we’ve created a chart that you can browse to see what the filing fees for your state are:
| State | Filing Fees | Recurring Fees |
|---|---|---|
| Alabama | $200 (+$25 to reserve name) | $10 annual report + $100 minimum for the Business Privilege Tax (yearly) |
| Alaska | $250 | $100 (every two years) |
| Arizona | $50 | None |
| Arkansas | $50 paper / $45 online | $150 (yearly) |
| California | $70 (+$20 Statement of Information) | $800 Annual Tax (yearly) + $20 Statement of Information (every two years) |
| Colorado | $50 | $10 (yearly) |
| Connecticut | $120 | $80 (yearly) |
| Delaware | $110 | $300 (yearly) |
| Florida | $100 (+ $25 registered agent fee) | $138.75 (yearly) |
| Georgia | $110 paper / $100 online | $60 paper / $50 online |
| Hawaii | $50 | $15 (yearly) |
| Idaho | $120 paper / $100 online | None |
| Illinois | $150 | $75 (yearly) |
| Indiana | $100 paper / $95 online | $50 paper / $32 online (every two years) |
| Iowa | $50 | $45 paper /$30 online (every two years) |
| Kansas | $165 paper / $160 online | $55 paper/ $50 online (yearly) |
| Kentucky | $40 | $15 (yearly) |
| Louisiana | $100 | $30 (yearly) |
| Maine | $175 | $85 (yearly) |
| Maryland | $100 | $300 (yearly) |
| Massachusetts | $500 | $500 (yearly) |
| Michigan | $50 | $25 (yearly) |
| Minnesota | $135 paper / $155 online | None |
| Mississippi | $50 | None |
| Missouri | $105 paper / $100 online | None |
| Montana | $35 | $20 (yearly) |
| Nebraska | $110 paper / $100 online | $30 paper / $25 online |
| Nevada | $75 | $150 annual report + $200 annual business license fee |
| New Hampshire | $100 paper / $102 online | $100 (yearly) |
| New Jersey | $125 | $75 (yearly) |
| New Mexico | $50 | None |
| New York | $200 | $9 (every two years) + $20 IT-204 LL (yearly) |
| North Carolina | $125 | $200 (yearly) |
| North Dakota | $135 | $50 (yearly) |
| Ohio | $100 | None |
| Oklahoma | $100 | $25 (yearly) + $40 registered agent fee |
| Oregon | $100 | $100 (yearly) |
| Pennsylvania | $125 | $7 (yearly) |
| Rhode Island | $150 | $50 (yearly) + $400 annual RI corporate tax |
| South Carolina | $110 | None |
| South Dakota | $165 paper / $150 online | $65 paper / $50 online (yearly) |
| Tennessee | $300 | $300 (yearly) |
| Texas | $300 | None |
| Utah | $54 | $18 (yearly) |
| Vermont | $125 | $35 (yearly) |
| Virginia | $100 | $50 (yearly) |
| Washington | $200 | $70 (yearly) |
| West Virginia | $100 | $25 (yearly) |
| Wisconsin | $170 | $25 (yearly) |
| Wyoming | $100 | $60 (yearly) |
How to Start an LLC
Now that you’re aware of your state’s filing fees (along with some other fees you may have to pay in order to start your LLC), we can discuss how to start an LLC.
There are a few steps that need to be completed, but as long as you stay organized, you’ll finish them in no time:
1. Choose a state to incorporate
Although it may seem like the easiest option, you do not have to incorporate in the state that you reside in.
This strategy may be beneficial in some ways, but if another state seems more appealing to form your LLC in, you may be able to incorporate there instead.
2. Register a business name
It’s time to pick a name for your LLC. Remember, the name that you pick for your LLC does not have to be its business name.
You are able to file a DBA form to have your business name be separate from the title of your LLC.
3. Obtain a registered agent
Registered agents can either be provided by the state government that you are forming your LLC, or you can obtain one privately.
This step has to be completed before forms are drawn up and signed moving forward.
4. Draft LLC operating agreement
An operating agreement is a document that all members of an LLC sign.
This document usually has terms and conditions that members agree to, covering many circumstances that can arise while operating.
5. File articles of organization
An Articles of Organization document is similar to an operating agreement but is a more formal document that acts as the business constitution.
This document should be drafted with all members present and contributing.
6. Obtain EIN
An Employee Identification Number (EIN) is used by the International Revenue Service (IRS) to tax businesses based on their structure, such as LLC or C-corporation.
This number can be obtained by submitting a form on the IRS website.
7. Open a business bank account
Once all business formation documents are submitted, it is wise to open a business bank account so that you can begin to put expenses (such as filing fees and other costs) into this account.
8. Get business licenses and permits
Not all businesses need a license or permit, but make sure that you obtain all necessary allowances before you begin to operate to avoid legal issues down the road.
Which state should I form my LLC in?
You’ve reached the finish line with this article on the costs of starting an LLC – nice!
Many people choose to form their LLC in their home state, which comes with many advantages.
However, if your state of residence is not friendly to LLCs, there are states that allow non-residents to open and operate LLCs.
As long as you’ve considered all LLC-related costs, you are financially ready to form your LLC.
Good luck with your future business endeavors.
FAQs
Which state is the cheapest to start an LLC?
New Mexico may be the cheapest state to form an LLC in, with starting costs as low as $50 total.
However, this can change, as governments may alter their fees every year.
What is the best state to form an LLC in?
Delaware is known to be the best state to form an LLC in, as this state has a well-renowned reputation for having favorable corporate laws and protocols.
Do LLCs have to pay taxes?
An LLC does not pay federal income taxes, as all profits and losses “pass through” to the members of the LLC.
The members then report this information on personal income tax returns.
With Northwest Registered Agent, you can start an LLC, hire a registered agent, and maintain state-to-state business compliance.