How Much is an LLC
A limited liability company is a popular and safe option for most small business owners but you may be wondering “how much is an LLC?”
It provides a flexible business structure and is fairly simple to set up.
Why would an LLC owner choose a Limited Liability Company:
- An LLC owner is not liable for the company’s debts and can choose their own management structure.
- They qualify for pass-through taxation – meaning that profits are only taxed once.
If you are reading this, you most likely have already decided that an LLC is the choice for your business and you are wondering how much it costs to form your LLC business structure.
How Much does it Cost to start an LLC?
LLC Name Reservation Fee:
If you are already set on a name for your business, we highly recommend that you apply for a name reservation.
Depending on your state this costs anywhere from $10 – $28.
This gives you peace of mind that your perfect business name won’t be taken by someone else.
State LLC Formation Fees or “Articles of Organization” Fee:
This is going to be perhaps one of the most important parts of forming your business – the Articles of Organization.
Once accepted, the Articles of Organization is what officially registers your LLC and locks in your business name.
The filing fee for the Articles of Organization varies by state and ranges anywhere between $40 – $500.
There are additional handling fees for dropping it off in person vs doing it online or by mail.
You only register your business once, so this is not a filing fee that you will have to pay annually.
Below we have listed the formation fees by State:
How Much is an LLC – By State:
|State||Filing Fee||Recurring Fees|
|Alabama||$150 minimum (varies by county)LLC Registration, Probate Judge, and name filing.||$100 Annual Privilege Tax – minimum|
|Alaska||$250||$200 (every 2 years)|
|Arizona||$50 (plus publishing costs)||$0 (report due annually)|
|California||$70||$800 – Franchise Tax (annually)$20 – Statement of Information (annually)|
|Delaware||$90||$300 Franchise Tax (annually)|
|Idaho||$100||$0 (report due annually)|
|Indiana||$95 online, $100 by mail||$20 (biennial report)|
|Iowa||$50||$60 (biennial report)|
|Kansas||$160 online, $165 by mail||$55 (annually)|
|Minnesota||$135||$0 (report due annually)|
|Mississippi||$50||$0 (report due annually)|
|Missouri||$50 (online), $105 (mail)||$0|
|Nevada||$75, plus $150 for the initial list of officers||$150 (annually)|
|New Hampshire||$100||$100 (annually)|
|New Jersey||$125||$50 (annually)|
|New York||$200 (plus publishing costs)||$9 (biennially)|
|North Carolina||$125||$200 (annually)|
|North Dakota||$135||$50 (annually)|
|Rhode Island||$150||$50 (annually)|
|South Dakota||$150||$50 (annually)|
|Tennessee||$300 (minimum)||$300 (minimum)|
|Texas||$300||$0 reportFranchise Tax|
|West Virginia||$100||$25 (annually)|
|Wisconsin||$130 (online), $170 (mail)||$25 (annually)|
|Wyoming||$100 (mail), $102 (online)||$50 (annually)|
Ongoing or Recurring Fees:
You may have noticed the right column above is for recurring fees.
In most states, you will have to renew the LLC and file an annual report.
The state LLC Filing fee to renew an LLC range from $0 to $500 annually.
In addition to the registered fees listed above for each state there are a few other ongoing fees to consider:
Registered Agent Service: The cost to hire a registered agent service is typically around $100-$125.
Many LLC formation services will offer one year of free registered agent service.
Business Licenses: Not all types of business require a license, but many of them do, and each license has its own set of fees.
Your limited liability may require one license or multiple licenses depending on the type of business you will be running.
Furthermore, depending on the type of business entity, your LLC may require licenses at both the local and federal levels.
These are typically renewed and paid for on an annual basis.
- Publication fees – some states like Arizona, Georgia, Nebraska, Nevada, New York, and Pennsylvania that require new LLCs to publish a legal ad notifying the public of the LLC formation in a local newspaper and supplying the affidavit of publication. Publishing costs vary depending on the state and newspaper.
- Operating Agreement – a few states require the creation of an Operating Agreement, which are written rules for how the LLC will operate. Even for states that don’t require one, it’s usually a good idea to have one to minimize internal disputes between LLC members, how profits and losses are allocated, etc.
- Attorney Fees – If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Here are the top two LLC Formation Services that we recommend:
$39 + State fee
They charge one of the lowest rates and are an overall best value. Their formation packages are loaded with features for a great price!
$0 + State fee
For those on a strict budget, this is your cheapest LLC service. You can add on features as needed.
Should I use an LLC Formation Service?
As you can see, there are several steps required to make sure that your LLC is formed correctly.
Hopefully this article helped you better understand what it takes to form and LLC in California as well as understand the associated costs.
If this all still seems overwhelming, then this is where using a formation service comes in handy.
If you have a little bit of flexibility in your budget or you know that the DIY route is not for you, then we strongly recommend hiring an LLC Formation Service.
An LLC formation service will make sure everything gets filed properly and expediently and they will make sure that all of your annual maintenance deadlines are not missed.
LLC formation services specialize in just that, forming businesses.
They streamline the process for you and are there to answer questions, fix mistakes, and help with legal advice and needs.
Many of them even take care of your yearly maintenance and filings for you and offer registered agent service as well.
Here are three popular LLC formation service options to give you an idea of what they offer:
ZenBusiness is one of the most affordable options and a great value.
They are a little smaller and newer than the other two mentioned below, but have excellent customer reviews and overall features.
Northwest Registered Agent also included a year of registered agent service with any LLC formation package. They also offer premium customer support that is unmatched to their competitors.
If you anticipate questions or more complex LLC formation, they are the top choice. You definitely get what you pay for and more with Northwest.
Northwest is our best overall value option.
$0 + State Fee
IncFile will form your LLC for free and include a full year of registered agent service with any LLC formation package.
IncFile is at the top of our list of the best LLC formation services, year after year.
If you decide to go the DIY route and form your own LLC but need help with the Annual Reporting, checkout the following services:
For $49, MyCompanyWorks will make sure you don’t miss a deadline. They are the most affordable annual report service out there and they offer a 100% satisfaction guarantee.
Their price varies depending on the service package that you choose, but their fully-managed services take care of everything so you don’t have to.
And if you want it all done for you, LLC formation and Annual Reporintg, then you may want to look into MyCorporation:
For $99 MyCorporation will form your LLC and also include a full year of their managed annual report service.
Forming your business correctly is going to be your first step to success and now you have the answer to the question “How much is an LLC.”
It is also important to stay on top of your Statement of Information reports and Franchise Tax payments.
If you fail to file and pay them on time, your LLC will be deemed “delinquent” and required to make outstanding payments within 60 days.
The state has the right to suspend a delinquent LLC’s powers, rights, and privileges until it has filed its missing documents and made its overdue payments.
Late franchise tax payments will also incur a penalty amounting to 5% of the unpaid tax per month, up to 25% of the total tax.
This might all seem like a-lot, but many of these charges are one time fees and the annual maintenance fees are much smaller.
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