An LLC has one unavoidable cost, the state filing fee, and a handful of optional or recurring ones layered on top. Knowing which is which is how you avoid overpaying a formation service for things that are free.
To create an LLC you file articles of organization with your state and pay a filing fee. That fee ranges from around $35 to $500 depending on the state, with most falling between $50 and $200. It is a one-time charge. Estimate your state's total in the LLC cost calculator.
A few states have extra requirements. New York and Arizona require newspaper publication of your LLC formation, which can add a noticeable cost in expensive counties. Some states charge more for expedited processing. And if you form in one state but do business in another, you pay to register as a foreign LLC in the second state, doubling several of these fees. More on that in LLC pros and cons.
For a typical single-state LLC, budget the filing fee plus the recurring state fee, and optionally a registered agent. Many people get fully set up for under a few hundred dollars in year one, with a smaller recurring cost after that. The big variable is your state, not the paperwork.
You can file directly with your state and pay only the state fee, or hire a formation service that submits the paperwork for an added charge, sometimes advertised as free with a paid registered agent attached. The service buys convenience and a few reminders, not anything you cannot do yourself. If you are comfortable filling out a short state form, the direct route is cheapest. If you would rather not think about it, a service is a reasonable small cost.
The required cost is your state's filing fee, generally $35 to $500 with most between $50 and $200, paid once. On top of that you may have a recurring annual report or franchise fee and an optional registered agent service. Your state is the biggest factor.
Most states charge a recurring annual report or franchise fee to stay in good standing, ranging from nothing to several hundred dollars. California's minimum franchise tax is $800 a year. A registered agent service, if you use one, adds roughly $100 to $300 annually.
No. An EIN is free directly from the IRS, and you can write an operating agreement yourself from a template. Services that charge for these are charging for things you can get at no cost.
Usually not for a small business. If you form in one state but operate in another, you must register as a foreign LLC where you do business, which means paying fees and keeping a registered agent in both states. For most owners, the home state is cheapest.
Priya covers tax, regulation, and compliance: the rules that decide what you can and cannot do, usually filed in an obscure subsection that most people skip. She reads federal register notices in her spare time and is at peace with that being unusual.