How Much Does an LLC Cost?

How much does an LLC cost? For most first-time owners in the U.S., expect to pay a one-time state filing fee of roughly $50 to $500 to form the LLC, plus ongoing costs in many states such as annual report fees or franchise taxes that can run anywhere from about $0 to a few hundred dollars per year. If you do it yourself, your total first-year cost is often under $200; if you hire a registered agent and a formation service, you might spend $300 to $600 or more. The single biggest variable is which state you file in.

How much does an LLC cost to start?

The cost to start an LLC really comes down to a handful of pieces, and only one of them is mandatory everywhere: the state filing fee. Everything else depends on your state, your industry, and whether you choose to pay other people to handle the paperwork. Before you spend a dollar, it helps to understand what an LLC is and why the structure fits your business, so you are not paying for something you do not need.

Here is the honest version: the government charge to create the LLC is usually the smallest part of running a business. The filing fee is one-time. The costs that add up over the years are the recurring ones, so it is worth looking past the first invoice and thinking about what year two and year three look like.

What are the main LLC cost components?

Below is a plain breakdown of the costs most first-time owners run into. Treat the numbers as typical ranges, not quotes.

Cost component	Typical range	How often
State filing fee (Articles of Organization)	$50 – $500	One-time
Annual report / renewal fee	$0 – $300	Yearly or every 2 years
Franchise tax (in some states)	$0 – $800+	Yearly
Registered agent (if you hire one)	$100 – $300	Yearly
Formation service (optional)	$0 – $300+	One-time
Business licenses / permits	$0 – $500+	Varies
Publication requirement (a few states)	$40 – $2,000	One-time

Estimates only; fees vary by state and change over time.

What is the one-time state filing fee?

To officially create your LLC, you file a document (usually called the Articles of Organization or Certificate of Formation) with your state and pay a filing fee. This is the one cost every LLC owner pays. It generally lands somewhere between $50 and $500 depending on the state, with most states falling in the $100 to $200 range. Some states are notably cheap, and a few charge several hundred dollars.

This fee is paid once, when you form the business. You can pay it directly to the state yourself, which is the cheapest route, or roll it into a formation service package. Either way, the state fee itself does not change based on who submits the paperwork. For a step-by-step walkthrough of the filing itself, see how to register your business.

What ongoing costs come with an LLC?

This is the part people forget. Forming the LLC is one payment, but keeping it in good standing is a recurring one. Two common ongoing costs:

• Annual report fees. Most states require you to file a short report each year (or every two years) confirming your business details, with a fee that often runs from nothing to a few hundred dollars. Miss it, and you can rack up penalties or lose your good standing.
• Franchise taxes. Some states charge a franchise tax or annual fee just for the privilege of operating there, regardless of profit. In a handful of states this can be several hundred dollars or more per year, which is a real factor if you are choosing where to form.

Because these differ so much, two identical businesses can have very different yearly costs simply based on their state. Always check both the upfront and the recurring numbers for your specific state before you commit.

Tip: When you compare states, look at the annual cost, not just the filing fee. A low signup fee paired with a high yearly franchise tax can cost more over three years than a state with a higher upfront fee and no annual tax.

Do I need to pay for a registered agent?

Every LLC needs a registered agent, which is a person or company with a physical address in your state who can receive legal and official mail on your behalf. The cost question is whether you pay someone or do it yourself.

You can be your own registered agent for free if you have a physical address in the state and are comfortable having it on public record and being available during business hours. If you would rather keep your address private, or you do not have an in-state address, a registered agent service typically costs about $100 to $300 per year.

DIY vs. using a formation service

There are two main ways to actually get your LLC set up, and they sit at different price points.

1. Do it yourself (cheapest). You file directly with your state and pay only the state fee. This is very doable for a simple, single-owner business, and it keeps your cost to the bare minimum. The tradeoff is your time and the responsibility of getting the details right.
2. Use a formation service. Companies will file the paperwork for you and often bundle in a registered agent, reminders, and other add-ons. Basic packages can start at $0 plus the state fee, but useful features push the real cost to a few hundred dollars. Convenient, but read what is actually included so you are not paying for extras you do not need.

What other costs should I plan for?

A few more items may apply depending on your business and location:

• Operating agreement. Not required in every state, but strongly recommended, especially with multiple owners. You can write one from a template for free or pay an attorney for a custom version.
• Business licenses and permits. Depending on your industry and city, you may need local, state, or federal licenses. Costs range widely and are separate from forming the LLC.
• Publication requirement. A few states require you to publish a notice of your new LLC in a local newspaper. In most of those states it is modest, but in one or two it can be surprisingly expensive.

None of these are universal, so the smart move is to make a short list of what actually applies to your state and industry rather than assuming you owe all of them. It also helps to see the LLC costs in the context of your overall startup costs, since the filing fee is usually a small slice of the total.

Frequently asked questions

Can I start an LLC for free?

Not entirely. Even in the least expensive states you still owe the one-time filing fee, so there is no truly free LLC. What you can avoid is paying for optional services: file directly with the state and act as your own registered agent, and your only cost is the state fee.

Which state is cheapest for an LLC?

For most people, the cheapest and simplest option is to form the LLC in the state where you actually live and do business. Forming in a "cheap" out-of-state option often backfires, because you usually still have to register in your home state anyway, which means paying two sets of fees.

Are LLC fees tax deductible?

In many cases, business formation and ongoing state fees can be treated as legitimate business expenses, but the rules have limits and specifics. Check with a tax professional about your situation rather than assuming any fee is automatically deductible.

Get your costs in order before you file

Knowing the numbers is half the battle; the other half is doing things in the right order so you do not pay for the wrong thing at the wrong time. Scafflow gives first-time U.S. owners a personalized, ordered launch checklist so you know exactly which fees apply to your state and business, and what to tackle first. It is free to start at build your free launch checklist.