How Much Does It Cost to Start an LLC?

How much does it cost to start an LLC? Expect $50 to $500 in state filing fees plus small extras. See realistic first-year totals and where every dollar goes.

The State Filing Fee: Your Biggest Cost

How much does it cost to start an LLC? For most owners, the total first-year bill lands between $100 and $700, with the state filing fee — typically $50 to $500 — making up the biggest chunk. The one cost you can't avoid is the filing fee for your Articles of Organization, and it ranges widely by state.

Kentucky and Colorado are on the low end at around $40 to $50, while Texas runs about $300 and Massachusetts about $500. Most states fall somewhere in the $100 to $200 range. This is a one-time fee for the initial filing — you pay it again only if you file amendments or register as a foreign LLC in another state. The fee covers the state's cost of reviewing and recording your filing, and it is the same whether you file online or by mail in most states.

Registered Agent Costs

Every LLC needs a registered agent with a physical address in the formation state. You can be your own agent for free, but many owners hire a service to avoid missing legal mail and to keep their home address off public records. Professional registered agent services typically cost $50 to $300 per year. If you are your own agent, you will need a physical street address in the state — a PO box will not work — and you must be available during business hours to accept legal documents.

Operating Agreement: Free or Nearly Free

An operating agreement is an internal document, not a state filing, so it costs nothing if you write it yourself. Free templates are widely available, and formation services often include one. If you'd rather have a lawyer draft a custom agreement, expect to pay $300 to $1,500 — worth it mainly for multi-member LLCs with complex ownership.

EIN: Free from the IRS

Your Employer Identification Number is completely free. The IRS doesn't charge for EIN applications, and the online application takes about 10 minutes with instant results. Beware of third-party sites that charge $50 to $100 for the same free service — always apply directly at IRS.gov.

Bank Account and Licenses

Opening a business bank account is usually free, though some banks require a minimum opening deposit of $25 to $100. Business licenses vary wildly: some cities charge nothing, others charge $50 to $500 a year. A sales tax permit is typically free, and most professional licenses cost $50 to $300.

Ongoing Annual Fees

An LLC isn't a one-time purchase. Most states charge an annual report fee or franchise tax, typically $50 to $300 per year. A few states, like California, add a minimum $800 franchise tax. Budget for these recurring costs so your LLC doesn't fall out of good standing. Some states also charge a small late penalty if you miss the deadline, so put the date on your calendar the day you form the LLC.

Realistic First-Year Totals

Here's what a typical first year looks like:

• DIY, low-cost state: $50 filing fee + $0 agent + $0 EIN = about $50 to $100
• DIY, average state: $150 filing fee + $0 agent + $50 license = about $200
• With a formation service: $150 filing fee + $150 service + $100 agent = about $400
• High-fee state (e.g., Massachusetts): $500 filing fee + extras = $600 to $700

Add $50 to $300 for the annual report in year two and beyond. These totals assume you handle the paperwork yourself; a formation service adds its fee on top. The good news is that most owners can form an LLC for well under $300. For the full process, see how to start an LLC.

Frequently Asked Questions

Is it cheaper to form an LLC yourself?

Yes. Filing directly with your state costs only the filing fee, typically $50 to $500. A formation service adds $0 to $300 on top for preparing and submitting the paperwork, which is worth it if you value convenience or want a registered agent included.

Do I have to pay annual fees for my LLC?

In most states, yes. Expect an annual report fee or franchise tax of roughly $50 to $300 per year, and up to $800 in California. These keep your LLC in good standing, so budget for them from day one.

Is an EIN free?

Yes, the IRS issues EINs for free through its online application, and you get your number immediately. Never pay a third-party site for this — the official IRS application takes about 10 minutes.

How much does a registered agent cost per year?

Professional registered agent services typically run $50 to $300 per year. You can avoid the cost entirely by serving as your own agent, but a service keeps your home address private and ensures you never miss legal documents.