How much does it cost to start an LLC?

Many entrepreneurs have been where you are. They keep wondering, “How much does it cost to start an LLC?” We’re here to cut to the chase. 💼

Whether you’re dreaming of starting a business but have no ideas, or you’ve already created a thriving company, it’s always a good idea to give yourself (and your business) some liability protection—and that means filing for a limited liability company (or LLC). 📜

It may certainly not be cheap to start an LLC, but the legal protection of your personal assets and the tax benefits you reap are why many small businesses do it. Whether you’re powering through this process alone, using a lawyer, or an LLC formation service, you’re going to be able to get this done by having all this information in one place. 🧠

But some legal documents aren’t necessary before you start worrying about your already tight budget. So, we worked together with an expert tax professional to get to the bottom of every penny that it’ll take to start your LLC. He’s reviewed this blog and verified this information. ✅

In this article:

• How much does it cost to start an LLC? Overview

  • Cost to start an LLC by state

• LLC startup costs explained 

• Optional fees when starting an LLC

• Ongoing LLC costs

• The bottom line on LLC costs 

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How much does it cost to start an LLC? Overview

You’re going to see a large range of pricing for your startup costs, optional fees, and ongoing costs:

• Filing fees: $35 - $300+

• Name reservation fee: $10 – $100

• DBA fee: $10 – $150

• Publication fee: $30 – $300

• Annual report fees: $10 – $500

Cost to start an LLC by state 

The main factor in determining the cost is going to your state’s unique fee structure. So, we went ahead and organized each state’s LLC filing costs. 💰

LLC startup costs explained

You might be seeing fees on fees right now, and you don’t even know what for. So, here are some of the most common fees and why you’re being charged. 🧐

State LLC filing fees

The first fees you’ll run into are your state filing fees. By applying to be a limited liability corporation with your Secretary of State, you’re paying a one-time fee for them to process your business entity and get a certificate of formation/certificate of organization. 📜

The form itself asks for things like your physical address, your designated in-state registered agent (this can be yourself or you can look into registered agent services), and your LLC name. 🖨️ The cost can vary from state to state here. It can be as low as $40 to as high as $300.

(And, if you’re not going to live in the state you conduct business in you’re going to have to file for a foreign LLC which means exactly that). 🧑‍⚖️

BTW: once you file, you’re likely going to get lots of official-looking mail from companies offering services that aren’t a requirement because it’s public info you’re an LLC. They’re just trying to make their quick buck so steer clear.

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Operating agreements

While you’re not required to, we heavily encourage drafting up an operating agreement (also known as articles of organization). This is just a written document of rules you and any of your potential LLC members are signing to abide by. This way you can cover all your bases if the unexpected happens to your business. 😇

You can obtain a basic template from legal services or work with an attorney who can create a customized operating agreement that meets all your state requirements. Having an expert’s eyes might be nice to walk you through exactly how to protect your assets under every scenario.

Publication requirement fees

Some states like New York and Arizona require that upon forming an LLC, you have to announce that formation in a newspaper publication. 🤓 This can cost business owners anywhere from $50 – $300.

Business licenses and permits

Based on the type of business you do, your state may require you to file for additional licenses and permits. For example, food truck vendors in Arkansas would have to pay the following costs: a business license that starts at $50, a mobile food facility license priced in your county, and a public health permit that can cost anywhere from $100 – $1,000+. 🛻

EIN application

This one doesn’t come with any extra cost, but you should get it done if you’re starting an LLC. ✨

EIN stands for employer identification number, and it’s how the IRS can keep track of your business and what you may pay your employees. All you have to do is fill out an application online. 

Optional fees when starting an LLC

There are some other fees for services that, if you can swing it, might help. Whether it’s another helping hand or a way to get a leg up on the competition, we’ve outlined some additional fees you may come across. 🫰

Registered agent 

You have to designate a registered agent when filing your LLC with the state. While this can be you, some hire a designated agent so they’re not working 24/7 business hours.🕴️

Plus, especially since many states make your LLC registration info public info, using an RA’s address can help protect your privacy. According to Forbes, it can cost up to $300 on average.

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Tuesday, November 26 | Ft. Certified Profit First Professional Debbie Deknight

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Mailbox

If you want to protect your privacy, but don’t want a registered agent, look into obtaining a UPS mailbox or get a business address by renting a mailbox at a coworking space. This way, you can still keep your business and personal life separate. 

A UPS mailbox can cost you anywhere from $10 – $50 a month.

Reserving your LLC’s name

If you have the perfect name on hand, you can’t lose it. And registering a trademark can take twelve to eighteen months. That’s why a lot of entrepreneurs choose to reserve their LLC names because it’s much quicker. 🏃

In Georgia, it can only take seven days to reserve a name. And it would only cost $25. Note: This fee does vary from state to state and can get as high as $75.

Filing a fictitious business name application (otherwise known as a DBA)

A Fictitious business name sounds way sketchier than it is. And the funny part is, it also goes by a million other names! 😎

A fictitious business name, otherwise known as a DBA, “doing business as,” or even a trade name is the name you want your business to go by that’s different from what’s on the LLC form. 🥸

So, let’s say that you filed under “The Small Real Estate, LLC” and you want to be known as “The Family Real Estate Company,” you should file for a DBA.

It’ll be a different cost in each state ranging from $5 - $150. And keep in mind, not every state allows for DBAs.

Ongoing LLC costs

Now that you know how much it’ll cost to get your LLC off the ground, you should know what fees to pay to keep your business running. From annual/biennial reports to income tax, prepare for these ongoing costs. 🫠

Taxes

As a small business owner, you get taxed the self-employment rate of $15.3%. So get your business bank account ready for those federal taxes. 💼

Plus, some states charge LLCs an annual franchise tax in addition to things like annual reports. Some states charge a franchise tax at a flat rate; some don’t. For example, California requires $800 a year in franchise tax and New York can charge anywhere from $25 – $25K.

💡Dreading tax season? Check out our guide to (totally legal) small business tax loopholes. 

Business license renewal 

If you have to obtain a business license in a certain sector (like the food truck example from earlier), you have to face renewal fees every year. These fees can range from $15 – $300+ depending on your state. 💥

Annual reports

Every LLC is required to file an annual or biennial report to stay in good standing and they come with an annual fee. 🫡

These fees can range from $10 – $500. You can file your annual reports on FinCen, a website run by the United States Government.

Live: How to Grow Your Business Without Chasing More Clients

Tuesday, November 26 | Ft. Certified Profit First Professional Debbie Deknight

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The bottom line on LLC costs 

Keeping track of all these one-time and ongoing fees is no easy task. But, then again, no great entrepreneur looks for the easy way out. 💪

So, arm yourself with this information, and remember that these LLC costs are just a stepping stone on the way to launching your wildly profitable business. 

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