How much does it cost to start an LLC in 2024?

A limited liability company (LLC) is a powerful option for small business owners seeking greater operating flexibility than a corporation while providing the same personal protection from company debts and liabilities. LLCs are relatively affordable to set up when compared to other startup costs.

These costs may influence your decision on where to start your LLC as they can vary widely from state to state. Should you decide to form your LLC in a state other than the one your business is operating in, you may need to add a foreign LLC registration fee to your list of operating expenses.

Our team of small-business experts collected data from government agencies to help you determine if forming and maintaining an LLC is the right choice for your small business. In this guide, we discuss the costs of: 

• Filing your LLC formation paperwork.
• Reserving your business name. 
• Designating a registered agent. 
• Obtaining an employee identification number (EIN).
• Publishing a legal notice of LLC formation. 
• Creating an operating agreement. 
• Paying taxes. 
• Filing annual reports. 

We also look at optional costs as you run your business, including filing for a fictitious name and requesting certified copies of business documents from your state. 

Initial costs to start your LLC

LLC formation

Cost: $40 – $500

Every business owner forming an LLC has to register said business with the state in which they operate and pay that state’s one-time filing fee at the time of registration. 

Across states, you may see different form terminology such as a “certificate of formation,” “articles of organization” or “certificate of organization,” but don’t let that confuse you; these are all terms for the form you must fill out to register or form your LLC with the state. Each state also has a different fee amount for filing your formation forms, but those filing fees generally range between $40 and $500, depending on the state.

LLC filing fees 

Name reservation

Cost: $10 – $50 

One of the first steps to forming an LLC with any given state is to name your LLC. Before you become too attached to a specific name, you need to perform a business name search through the appropriate state portal to make sure your business name isn’t already taken. 

If your chosen name is already in use, you need to find a distinguishable name that is different from in-use names in your state. To do so, you can play around with your business name by adding or subtracting letters, combining words or changing the spelling of your LLC in a fun and catchy way to see if such names aren’t taken and are available for registration with the state. It’s also important to find out the prohibited words that cannot be included in your LLC name in your state, information that is often available via your state’s division of corporations or department of state.

Once you’ve chosen a usable name, it is best to reserve it so it’s not taken between the time you choose your name and your business’s official formation. Costs to reserve a business name vary by state but here are some examples of state name reservation fees: 

• Florida: $25.
• Arizona: $10 – $45.
• Michigan: $25. 
• Texas: $40.

Registered agent fees

Cost: $0 – $300 per year

Registered agents act as your business representatives in your own and other states, and serve to receive legal and other key documents on behalf of your business. Your registered agent can either be an in-house manager or other business representative, or a hired registered agent service provider. States require you to designate a registered agent in your articles of organization. 

If you’re starting an LLC in another state, using a registered agent to manage notice reception on your business’s behalf may be worth every penny. A registered agent must be a person living in the applicable state or a service provider within that state. Agents must have a physical address, must be able to receive and alert you to legal notices and government documents in a timely manner and should provide various services to help you keep your business compliant in the state(s) in which your company operates. 

Because a registered agent must be present at your listed registered agent address during all local business hours, hiring a service frees up your internal LLC personnel to leave the office for business travel, sick days or to meet a client for lunch. It also ensures that embarrassing legal papers, such as notices your company is being sued, are not delivered to your office in front of customers or employees. 

Fees for hiring a registered agent service provider vary from free to $300 per year. Prices depend on the service provider, what other services you purchase through that provider and added plan features (such as compliance or deadline alerts, online portals and mail-forwarding services).

To find the best registered agent for your company, read our best registered agent services guide.

Employee identification number (EIN): 

Cost: Free

An employee identification number or EIN is a nine-digit number assigned by the Internal Revenue Service (IRS) that identifies tax accounts of small business owners who are required to file various business tax returns. Any LLC that has employees needs an EIN, as well as single-member LLCs that are classified as disregarded entities per IRS guidelines. 

Entrepreneurs and small business owners forming single-member LLCs that don’t have employees, as well as excise tax liabilities, are not required to apply for an EIN and can use the LLC’s name and tax identification number (TIN) to file federal tax returns.

Applying for an EIN is free. If you’re a controlling member or owner of the LLC, visit the IRS’s application portal and fill out the form as prompted using your name and Social Security number. You will be assigned an EIN immediately upon submission. 

Publication requirement

Cost: $0 – $300

There are currently three states with publication requirements and fees for LLCs in the formation stage: Arizona, New York and Nebraska. These requirements mandate that LLCs post public notices of their formation in one or more newspapers for a predetermined length of time that varies by state. 

While the cost associated with publishing a notice of your LLC formation varies significantly by publication, our research indicates you should expect to pay between $30 and $300, depending on the publication and the content of your notice. Here are some examples of newspapers within these states that allow legal notice publications and the costs associated with them: 

• New York Daily News: Starting price is $219.00. 
• Ajo Copper News (Arizona): $30 to $110. 
• The Scarsdale Inquirer (New York): $157.50.

Additional fees may apply, depending on state requirements. For example, Nebraska requires all LLCs to submit a proof of publication after publishing their legal notice of LLC formation, which costs $25 when submitting online and $30 when submitting in person or by mail. 

Operating agreement

Cost: Free to $300

While creating an operating agreement isn’t an LLC requirement, it is strongly recommended to establish the terms of your organization at the onset. An LLC operating agreement is a business document that spells out the rules, regulations and provisions of an LLC. It overrides state rules regarding how LLCs should be run, thereby solidifying its members’ operational wishes. 

It outlines rules such as:

• Member rights and duties.
• The LLC’s new-member induction process.
• Compensation details.
• Members’ ownership percentages.
• Dissolution terms.
• How the business is to be managed and operated. 

Having an operating agreement on file can help resolve member disputes or, better, clarify questions that arise among members before they become larger issues. If you’re forming a single-member LLC, creating an operating agreement to further establish your LLC as a separate legal entity is still a good idea. 

Operating agreements are free. You can source free operating agreements from LLC formation companies such as Rocket Lawyer and Northwest Registered Agent. Some, like RocketLawyer, even offer a questionnaire to fill out, at which point the LLC formation company fills out a printable operating agreement on your business’s behalf for free. 

However, as a legally-binding document that often involves more than one person and spells out the future of your LLC, it is a good idea to hire a business or corporate lawyer to look over your document before your members sign it. The average U.S.-based corporate lawyer charges $73 an hour. 

Ongoing costs to maintain your LLC

Once you’ve registered your LLC, there will be ongoing fees each year to maintain your registration while verifying with the state that your business is still active. These fees vary by state and are typically charged as an annual tax or reporting fee due by a certain date each year. Keep in mind that missing the annual deadline may result in hefty penalty fees to bring your LLC back to active status. 

Annual LLC fees 

Cost: $25 – $4,500

Taxes

Cost: Varies

Everyone in the US has to pay taxes, and LLCs are no different. The tax structure of an LLC allows business owners to be taxed based on their profits, as opposed to the LLC entity itself being taxed. This process is called pass-through taxation, where taxes “pass through” the LLC and onto business owners, who then pay personal income tax based on such profits. 

The way most states handle LLC taxation is the same as the federal government, where taxes are paid based on each member’s personal tax return. However, some states require business owners to pay an additional LLC franchise tax. California, for example, requires every LLC doing business or organized in the state to pay an annual tax of $800. Delaware is another example of a state that requires all foreign and domestic LLCs to pay an annual tax of $300. 

Reporting fees

Cost: $0 – $4,500

Reporting fees are ongoing fees due annually for as long as the business is operating in any given state. Such fees vary from state to state and can include hefty penalties when businesses fail to file their annual reports on time. 

Examples of state fees accompanying on-time annual reports include:

• North Carolina: $200.
• Florida: $238.75.
• Michigan: $25.
• Arizona: $0.
• California: $800.

Optional LLC fees

Some costs associated with starting an LLC are not mandatory but are necessary in certain circumstances. They include hiring an LLC formation service, filing to operate under a doing-business-as or fictitious name and requesting certified copies of business documents or a certificate of good standing. 

LLC formation services

Cost: $0 to $300

At a minimum, small business owners must pay state filing fees to start an LLC in any state. While it may be tempting for independent entrepreneurs to manage and file their own LLC paperwork, opting for a lean LLC launch versus hiring an LLC formation service can mean problems down the road. Hiring an LLC formation service offers added knowledge and services for a successful LLC launch. Such service costs anywhere from free to $300, depending on the features included in each plan, such as free registered agent services, EIN filing, legal counsel or operating agreement creation. 

To find the best LLC formation service for you, read our best LLC services guide. 

DBA or FBN

Cost: $0 to $50

Every LLC has a legal name that must be on file with each state in which your business operates, but that doesn’t mean you have to operate your business under that name alone. There are two common alternatives to doing business under a name that’s different from the one on file with the state: you can register for a “doing business as,” (or DBA) name or “fictitious business name,” (or FBN).

Since they are synonyms for the same concept, both DBAs and FBNs essentially perform the same function: to allow businesses to operate under names different from their official LLC names. They offer the ability to market your business under different names that may be more consumer-friendly than your official LLC name. 

Some states require filing fees for small business owners to operate under a DBA or FBN, while others don’t allow LLCs to do business under an alternative name at all. For example, Kansas state law does not require or permit the registration or filing of DBAs or fictitious names. 

Though costs to file an LLC DBA or FBN vary by state, here are some examples of the associated fees by state:

• Virginia: $10.
• Michigan: $25.
• California: $25 – $50 (depending on the county).
• Florida: $50.
• New Mexico: $0 (DBA registration not required).

Certified copies of business documents

Cost: $0 – $30

Business owners can request certified copies of business documents for use when opening a bank account, sourcing business funding and other business tasks. These requests can sometimes be made online, but many states require such requests to be made in writing and mailed in.

Most states charge a fee to provide such documents. The cost of ordering certified copies of business documents varies by state. However, here are some examples of the fees charged by different U.S. states: 

• Florida $30. 
• Colorado: $0.
• Virginia: $6.
• California: $5.

Standing certificate

Cost: $0 – $15

Standing certificates are legal proof demonstrating that a business entity is properly filed with the given state in which it operates. Business owners may request in writing these standing certificates (also known as a ‘certificate of status’ or a ‘certificate of good standing’) for a fee that varies by state. 

Often such certificates can be ordered when filing LLC formation papers, or you can opt to order and pay for a standing certificate at a later date. For example, obtaining a certificate of status from the state of Delaware at the time of filing the new entity is probably the easiest route to obtaining one from the initial launch of your LLC, or you can request a certificate in writing from the state’s division of corporations at a later date. 

In both cases, the cost for the two certificate types in Delaware is the same: $50 for a short-form certificate (includes the name of the entity and the status at the time the certificate is issued) and $175 for the long-form certificate (which includes confirmation that documents have been filed, time and date of name changes and the current status). 

Some other examples of certificate-of-status or certificate-of-good standing costs include: 

• Virginia: $6.
• Florida: $10. 
• Colorado: $0.
• Wisconsin: $10, plus 25¢ per page.

Cost to register a foreign LLC

Cost: $100 – $300

A common misnomer about foreign LLCs is that they are companies outside of the United States filing in the US. This is incorrect. A foreign LLC is a business that was created within the United States but is registered to do business in a state other than the one in which the business was formed. 

The cost to register a foreign LLC varies from state to state. Some examples include: 

• Delaware: $200. 
• Florida: $100. 
• Virginia: $100.
• Maine: $250.

Can I open an LLC on my own?

Yes, business owners can start an LLC on their own. LLCs are a popular option for entrepreneurs and small business owners seeking liability protection, such as separating LLC assets from individual assets, but do not want to go through the time and expense of forming a corporation. Application documents for LLCs are available on state websites.

Frequently asked questions (FAQs)

Are LLCs expensive to start?

Forming an LLC is typically a cost-effective way for small business owners to increase protections from corporate losses or debts, but the costs to form an LLC vary from state to state. Currently, LLC filing fees across all 50 states range from $40 (Kentucky) to $500 (Massachusetts), along with other annual fees such as annual reporting fees and franchise taxes that change depending on the state in which you file.

Can I open an LLC in any state?

Yes. While starting an LLC in your home state is typically the least complicated option, you can file in any one of the 50 states in the United States. All 50 states require a registered agent, so if you’re considering filing outside of your home state, it may be worth finding a registered agent service to help.

What is the cheapest state to start an LLC?

A low filing fee of $40 and annual reporting fee of $15 make Kentucky the most affordable state to start an LLC. It’s worth noting that businesses wishing to start an LLC in Kentucky will still require a registered agent, an individual resident of Kentucky, or a Kentucky business (corporation, LLC, etc.) authorized to transact business in the state of Kentucky. Hiring a registered agent service costs between $0 and $300 per year.

Can I open an LLC for free?

No. All U.S. states require a state filing fee to form an LLC. For example, the Delaware division of corporations requires all Delaware LLCs to submit a certificate of formation and pay a $90 filing fee. Further, while LLCs are not required to file an annual report in Delaware, an annual tax of $300 must be submitted no later than June 1st of each year following the calendar year in which the certificate of formation becomes effective.

It’s important to note that while several LLC formation services advertise free or reduced-price services, you must still pay state filing fees to form an LLC.