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.
The one cost everyone pays: the filing fee
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. Montana's fee is the lowest nationwide at $35, and Massachusetts is the highest at $500, per 2026 state filing-fee data. It is a one-time charge. Estimate your state's total in the LLC cost calculator.
The recurring costs
- Annual report or franchise fee. Most states charge a recurring fee to keep the LLC in good standing, from nothing in a few states to several hundred dollars elsewhere. California, for example, charges an annual minimum franchise tax of $800.
- Registered agent. You can be your own registered agent for free, or hire a service for roughly $100 to $300 a year for privacy and reliability. See the registered agent guide.
The costs you can skip
- An EIN is free. You get an Employer Identification Number directly from the IRS at no charge. Any service charging for it is charging for a free form.
- An operating agreement can be free. You can write one yourself from a template. It is smart to have, but it is not a required state fee.
- Formation services are optional. They file the paperwork for you for a fee on top of the state fee. Useful for convenience, not required.
Special cases that add cost
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. See how that stacks up against staying a sole proprietor instead.
So what is the real number?
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.
Formation service or do it yourself?
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.
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Educational only, not legal or tax advice. State fees change. Confirm current amounts with your state filing office.
