Introduction
Thinking about starting a business and leaning toward an LLC? You’re not alone. A Limited Liability Company (LLC) is one of the most popular setups in the U.S. It gives you
- liability protection
- tax flexibility
- and makes you look a little more professional in front of clients.
But let’s be real—the first question that pops up is always money: how much is this actually going to cost me?
But the thing is there isn’t a single number for it. Cost totally depends upon:
- What state are you in
- whether you do it yourself
- And if you pay for extras like a registered agent.
So now I will walk you through the numbers so you know what you’re getting into.
The Two Main Buckets of Costs to Form an LLC
When you’re forming an LLC, you’ll be paying two types of fees:
- The setup cost — that’s the filing fee to officially register your LLC.
- The ongoing cost — the stuff you have to pay every year (or every two years) to keep your business legit.
Most states charge somewhere between $35 and $500 just to get the paperwork stamped. After that, you’ve got maintenance fees like annual reports, franchise taxes, and sometimes optional extras depending on how you want to run things.
Filing Fees: The Big Upfront Hit
The first check you’ll write is the state filing fee. This is basically the cost of turning your idea into a legal business.
Some states are cheap. Montana, for example, only asks for $35. That’s it. California looks decent at first too—$70 to file—but then they hit you with an $800 annual tax, which makes it one of the most expensive states in the long run.
Texas charges $300 to start an LLC, but they don’t have an annual fee. New York sits at $200 upfront and then only $9 every two years for its biennial report, which is tiny compared to most states. Massachusetts, though, is on the other side of the scale—$500 to start and $500 every single year after. Wyoming is often a favorite among entrepreneurs: $100 to set up and only $60 a year to keep it alive.
So yeah, the state you choose makes a huge difference.
Annual or Biennial Reports
After you set up your LLC, many states want you to check in once a year (or every two years) with a report. It’s basically a quick form telling them who owns the business, where you’re located, and who your registered agent is.
Florida charges $138.75 every year for this. Illinois keeps it at $75 annually. New York, again, is dirt cheap—just $9 every two years. Miss a deadline though and you’ll rack up late fees, or worse, risk your LLC being suspended.
Franchise and Minimum Business Taxes
Here’s the part that surprises a lot of people: some states charge you a yearly fee just for the privilege of existing as an LLC. It’s not based on your income—it’s just a flat tax.
California’s the big one, with that $800 annual franchise tax. Delaware makes you cough up $300 every year. Nevada doesn’t technically charge a franchise tax, but you do have to buy a $200 state business license every year. States like Wyoming or Texas are a lot more friendly since they either don’t have this tax or they let smaller businesses off the hook.
Do You Need a Registered Agent?
Every LLC has to list a registered agent—someone who receives legal papers if your business ever gets sued or needs to be contacted by the state.
You can do this yourself if you live in the same state where your LLC is registered, which costs nothing. But most people pay for a registered agent service because it keeps their personal address off public records. Those services will usually cost you between $80 and $300 per year. But you should think of it as paying for privacy and your peace of mind.
Optional Extras That Add Up
Outside of the basic filing fee, you might run into a few more costs depending on your situation.
Some states let you reserve a business name before you file. That’ll usually cost $10 to $50. An operating agreement (which explains how your business is run) isn’t always required, but it’s smart to have one. If you draft it yourself, it’s free. If you pay a lawyer, it could cost anywhere from $50 to $500.
Want to use a name that’s different from your official LLC name? That’s where a DBA (Doing Business As) comes in, and it typically costs $10 to $100. If you’re unlucky enough to be in New York, Arizona, or Nebraska, you’ll also have to publish a notice in the local paper to announce your LLC. That could run from $50 to well over $1,000 depending on ad prices.
And if you’re in a hurry? States usually let you pay extra for expedited processing. That add-on can be anywhere between $25 and $200.
Real Examples From Different States
Let’s put this into perspective with a few real numbers.
In Wisconsin, it costs $131 to file online, and then you’ll pay $25 each year for your annual report. Washington State is a bit pricier—$200 to file, plus $60 every year for the annual report and $90 for a state business license. Nevada comes in heavy, with around $425 upfront and $350 every year after. Montana, by comparison, is super cheap: $35 to start and $20 annually.
As you can see, it really depends on where you are.
DIY vs. Paying for Help
You’ve got a choice here: handle the paperwork yourself, or pay someone to guide you through it.
DIY is the cheapest. You only pay the state’s filing fees. But if you are not confident that you can do it right then online services like LegalZoom, ZenBusiness, or Incfile can assist you in this. They usually add $50 to $400 on top of state fees, but they throw in templates, reminders, and a smoother process.
If you want everything airtight or your business is complicated, you could hire a lawyer. That’s the most expensive route—anywhere from $500 to $2,000—but also the most thorough.
Don’t Forget the Long-Term Costs
Here’s the part a lot of new business owners miss: some states seem cheap upfront but bleed you dry every year.
California is the best example. You only pay $70 to start, but then it’s $800 annually. Compare that to Wyoming, where you spend $100 to set up and just $60 each year after. Big difference.
And remember—on top of these LLC fees, you may also need licenses, permits, or certifications depending on what you do. Those can add hundreds more to your startup costs.
Picking the Best State for Your LLC
It’s tempting to register your LLC in a state that looks cheap on paper, like Delaware or Wyoming. But unless you actually live there, it’s usually not worth it.
Why? Because if you run your business in another state, you’ll have to register as a foreign LLC in your home state anyway. That means paying double fees. For most small businesses, the simplest and cheapest choice is to form the LLC in your home state.
FAQs
What’s the cheapest state to start an LLC in the USA ?
Montana and Kentucky are the cheapest upfront, with filing fees around $35–$40. But Wyoming usually wins for long-term affordability thanks to low annual fees.
What’s the most expensive state in the U.S. ?
Massachusetts is pricey—$500 to start and $500 each year. California is brutal too with its $800 annual franchise tax.
Can I start an LLC for free in the U.S. ?
Nope. Every state charges at least a filing fee. The only way to save money is to do the paperwork yourself.
Do I need a registered agent service ?
Not if you live in the state and want to be your own agent. But most people pay for a service to keep their personal details private.
Are there any hidden costs to form an LLC in the U.S. ?
Yep. Depending on your city or industry, you might need licenses, permits, or certifications. Those aren’t included in the standard LLC fees.
Final Thoughts
So that is pretty much clear now that starting an LLC in the U.S. isn’t that much expensive but the price tag changes a lot depending on the state. You’re looking at anywhere from $35 to $500 just to file, plus $50 to $800 (or more) every year to keep it active.
If you’re just running a small business, the best move is usually to register in your home state. That way you avoid duplicate fees and keep things simple. Realistically, you should plan for about $100–$300 to get started and at least $50–$500 each year after that.
But here the bottom line is that you should know the costs ahead of time so you’re not blindsided and then you can focus on the fun part i.e. actually building your business.
