How Much Is An LLC To Start | Cost To Form An LLC In Every State Of The USA

Cost To Form An LLC In Every State Of The USA

LLC stands for Limited Liability Company and it is a type of business structure allowed by state statute. In fact, it is a US-specific form of a private limited company. The main purpose of an LLC is to combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation. Each state uses different regulations for LLC and the cost to create an LLC also varies in different states of the USA. In this guide, you will find all the details about the cost of forming an LLC in every state of the USA. Let’s check them out!

The main cost of forming an LLC is the fees you have to provide according to each state law. Depending on the state, you might have to pay fees that range between $40 and $500. You can hire a professional LLC formation service to set up your LLC or you can use free tools to create your LLC. Moreover, there are other costs available that you might have to pay that includes permit fees, publication fees, LLC name reservation fees, fictitious name fee, etc.

Cost To Form An LLC In Every State

StateSet Up CostsOngoing Costs
Alabama$200+Annual Privilege License
Alaska$250$200 Biennially
Arizona$50 + Publishing RequirementNo Annual Fee
Arkansas$50$150 Annually
California$70$20 Biennially + Annual Franchise Tax
Colorado$50$10 Annually
Connecticut$120$20 Annually
Delaware$90$300 Annual Franchise Tax
District of Columbia$220$300 Biennially + Annual Franchise Tax
Florida$125$138.75 Annually
Georgia$100$50 Annually
Hawaii$50$15 Annually
Idaho$100No Annual Fee
Illinois$150$250 – $300 Annually
Indiana$95$50 Biennially
Iowa$50$30 – $45 Biennially
Kansas$160$50 – $55 Annually
Kentucky$40$15 – $30 Annually + Annual Entity Tax
Louisiana$100$30 Annually
Maine$175$85 Annually
Maryland$100$300 Annually
Massachusetts$500$500 Annually
Michigan$50$25 Annually
Minnesota$155Annual Partnership Tax
Mississippi$50No Annual Fee
Missouri$50No Annual Fee
Montana$70$20 Annually
Nebraska$100 + Publishing Requirement$10 – $13 Biennially
Nevada$75$125 Annually
New Hampshire$100$100 Annual + Annual Enterprise Tax
New Jersey$125$50 Annually
New Mexico$50No Annual Fee
New York$200 + Publishing Requirement$9 Biennial + Annual Filing Fee
North Carolina$125$200 Annually
North Dakota$135$50 Annually
Ohio$99Annual Commercial Activity Tax
Oklahoma$100$25 Annually
Oregon$100$100 Annually
Pennsylvania$125 + Publishing RequirementNo Annual Fee
Rhode Island$150$50 Annually
South Carolina$110Annual Franchise & Excise Tax
South Dakota$150Annual Fee
Tennessee$300 Minimum$20 Annually
Texas$300$35 Annually
Utah$70$50 Annually
Vermont$125$60 Annually
Virginia$100$25 Annually
Washington$180 – 200$25 Annually
West Virginia$100$60 Annually
Wisconsin$130 – $170$120 Annually
Wyoming$100 – $102$50 or 0.02% value of assets Annually

Other LLC Costs And Fees To Form An LLC IN USA

Other LLC Costs And Fees To Form An LLC IN USA

There are quite a few other costs associated with LLC forming process in the USA. Some common costs are – 

1. Business Licenses and Permits

2. Publication Fees

3. Name Reservation Fee

4. Fictitious Name Fee

5. Ongoing Maintenance Costs

1. Business Licenses And Permits

Depending on the industry and geographical location you have to take federal, state, and local permits/licenses. This is the first requirement to form an LLC. 

2. Publication Fees

Some states in the USA require your new LLCs to publish a statement of formation in the local newspaper. If you live in Arizona, Nebraska, or New York then you have to publish the statement of information. 

3. Name Reservation Fee

If you’re forming an LLC in Alabama, then you have to reserve your LLC’s name for a fee of $10-$28. However, reserving a name is optional for all other States.

4. Fictitious Name Fee

Usually, a fictitious name isn’t required for LLCs. But when you create an LLC you should create a fictitious name to create separate brands under your main LLC. A fictitious name is referred to as a DBA or “doing business as” name.

5. Ongoing Maintenance Costs

In some states, you have to pay ongoing maintenance costs and taxes like franchise tax and annual report fees. Many states in the USA levy a yearly tax on LLC’s and it is known as a franchise tax. Basically, it’s a flat tax, but in certain states, the tax amount might vary according to your LLC’s annual earnings. On the other hand, most states require LLCs to submit an annual or biennial report and while submitting the report you have to pay some fees. Usually, the report includes updating the name, address, and ownership of the LLC.       

How to Form an LLC

Forming an LLC is a simple process and you can easily start an LLC by yourself. Below are five basic steps to create an LLC in the USA – 

1. Name Your LLC

2. Choose a Registered Agent

3. File the Articles of Organization

4. Create an Operating Agreement

5. Get an EIN

Step 1: Name Your LLC

The very first step of forming an LLC is to name the LLC. While naming the LLC you should choose a name that:

1. Is available for use in your state

2. Meets your state’s naming requirements

3. Is available as a web domain

Moreover, every state has different rules for a business name. Some common rules are – 

1. The company name must include the phrase “limited liability company,” or any of its abbreviations (LLC or L.L.C.)

2. The name must not include any words that could confuse the LLC with a government agency, for example, FBI, Treasury, State Department, etc.

3. Restricted words like Bank, Attorney, University might require additional paperwork

Step 2: Choose A Registered Agent

Most states require LLCs to appoint a registered agent. Here the registered agent primarily acts as your LLC’s main point of contact with the state. Moreover, registered agents are also responsible for accepting service of process when your business is sued. Some common requirements while choosing a registered agent are – 

1. The registered agent must be at least 18 years or older

2. The registered agent must have a physical address in the LLCs state

3. The registered agent must be available during normal business hours to accept service of process   

Step 3: File The Articles Of Organization

In order to create an LLC, you have to file your formation documents with the state’s business division which is usually the Secretary of State. In many states of the USA, the Articles of Organization are known as the Certificate of Formation or Certificate of Organization. Filing the LLC Articles of Organization is very simple. You can complete the information on the formation documents yourself or you can also hire an LLC formation service to file for you. The average state filing fees are about $100 to start an LLC. 

Step 4: Create An Operating Agreement

After filing the articles of organization, the next step is to create an operating agreement. An LLC operating agreement is a type of legal document that outlines the ownership structure and member roles of an LLC. Though some states don’t require you to have an operating agreement, it is a good practice to create one when forming an LLC. An operating agreement has six main sections. They are – 

1. Organization

2. Management and Voting

3. Capital Contributions

4. Distributions

5. Membership Changes

6. Dissolution 

Step 5: Get An EIN      

The final step of creating an LLC is to get the EIN. Here EIN stands for Employer Identification Number and it is also known as Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN). EIN is similar to a Social Security number (SSN) and you will need EIN to hire employees or open a business bank account. You can easily get your EIN for free on the IRS website, via fax, or by mail.

FAQs About How Much Is An LLC To Start

Do You Have To Pay For An LLC Every Year?

Depending on the state you live in, you might have to pay an annual franchise tax and/or annual report fee. You should check online if your state requires you to pay for an LLC every year.

Is An LLC Really Necessary?

An LLC is very important for a business because it provides limited liability protection. Forming an LLC will protect your personal assets during a business loss such as a lawsuit or unpaid debt. Therefore, every business must form an LLC even if they have the smallest amount of risk or liability.

Is An S Corp Better Than An LLC?

S crop and LLC are not the same things. An S corporation is an IRS tax status while LLC is a type of business formation. An LLC can be taxed differently than the S Corp.

What’s Better Sole Proprietorship Or LLC?

LLC is better than the sole proprietorship. A sole proprietorship is best for small businesses that carry a very low risk of liability because a sole proprietorship doesn’t offer any liability protection.

What Is The Best Business Structure For A Small Business?

For a small business, LLC is the best business structure. This is because LLC can separate and protect personal assets from business assets. Moreover, LLC is the most affordable and simplest legal business entity to form and maintain.


Last Updated on January 26, 2022 by

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