How Much Does It Cost to Form an LLC? (By State)

Starting an LLC is one of the most affordable ways to protect your business and personal assets. But the real cost goes beyond just the state filing fee — there are ongoing expenses, optional services, and a few hidden costs that can catch new business owners off guard.

This guide breaks down exactly what you’ll pay to form an LLC in each state, plus the ongoing costs most people don’t think about upfront. We’ll also show you when it makes sense to file yourself versus using a formation service.

After reading this (takes about 8 minutes), you’ll know exactly what to budget for your LLC formation and which expenses are worth paying for versus which ones you can skip.

What You Need to Know First

Every state charges a filing fee when you submit your articles of organization (the document that officially creates your LLC). These fees range from $50 in Kentucky and Mississippi to $520 in Massachusetts. But that’s just the starting point.

You’ll also need a registered agent — someone with a physical address in your state who can receive legal documents on behalf of your LLC. If you don’t have a business address in your formation state, you’ll need to pay for this service, typically $100-200 per year.

Here’s the myth we hear constantly: “I can form an LLC for $50.” Technically true in some states, but not realistic. Most people end up spending $150-400 total to get their LLC properly set up and running.

This cost breakdown applies whether you’re a freelance graphic designer, an e-commerce seller, a real estate investor, or running any other business. The filing fees are the same regardless of your industry or income level.

How to Form an LLC — Step by Step

Before you start, have these items ready:

Your desired LLC name (check availability first)
Your business address or registered agent information
Names and addresses of all LLC members (owners)
Payment method for filing fees

Step 1: Choose Your State

Most single-owner businesses file in their home state. But if you’re in a high-tax state like California or New York, consider Wyoming or Delaware for better tax treatment and lower ongoing costs.

Step 2: File Articles of Organization

Submit this document to your state’s Secretary of State office. You can file online in most states, by mail, or through a formation service. This step takes 15-30 minutes if filing online yourself.

Step 3: Get Your EIN

Apply for an Employer Identification Number (tax ID) from the IRS. This is free directly from the IRS and takes about 10 minutes online. You need this to open a bank account and file taxes.

Step 4: Create an Operating Agreement

While not required in most states, this document outlines how your LLC operates and protects your limited liability status. You can download a basic template or have an attorney draft a custom version.

Step 5: Get Required Licenses and Permits

Research what your specific business needs. A consulting business might not need anything beyond the LLC filing, while a restaurant needs multiple permits and licenses.

Most states approve your LLC within 5-15 business days. You’ll receive a Certificate of Organization or similar document proving your LLC exists. Some states offer expedited processing for an additional $25-100 fee.

What It Costs

State Filing Fees by Region:

Northeast: $100-520 (Massachusetts is the highest at $520, most others range $100-200)

Southeast: $50-300 (Kentucky and Mississippi are cheapest at $50, Florida is $125)

Midwest: $50-150 (Generally the most affordable region)

West: $70-800 (California is expensive at $70 plus $800 annual franchise tax)

Southwest: $50-300 (Texas is $300, others typically $50-100)

Formation Service Costs:

Basic packages typically cost $50-150 plus state fees. These usually include:

Filing your Articles of Organization
Registered agent service for one year
EIN registration
Basic operating agreement template

Premium packages range $200-400 plus state fees and may include:

Expedited filing
Business banking setup assistance
Compliance calendar and reminders
Legal document templates

Ongoing Annual Costs:

registered agent renewal: $100-200/year
Annual reports: $0-300 depending on your state
California franchise tax: $800/year minimum
Business licenses: varies widely by industry and location

DIY vs. Service vs. Attorney:

DIY filing: Just the state fee ($50-520) but you handle everything yourself
Formation service: State fee plus $50-400 for convenience and ongoing support
Attorney: $500-2,000+ for complex situations or custom legal documents

Bottom line: Most people spend $150-400 total to get their LLC properly formed and running, including the first year of registered agent service.

Mistakes That Cost People Money

Filing in the Wrong State

Many people automatically file in their home state without considering alternatives. If you live in California but your business has no physical presence there, filing in Wyoming could save you $800+ annually in franchise taxes.

Fix: Consider Delaware for investor credibility, Wyoming for privacy and low costs, or your home state if you have a physical business location there.

Skipping the Operating Agreement

Even single-member LLCs benefit from an operating agreement. Without one, your LLC might not hold up in court if someone challenges your limited liability protection.

Fix: Get at least a basic template. Many formation services include this, or you can download one for $50-100.

Choosing the Cheapest Registered Agent

That $39/year registered agent service might disappear next year, leaving your LLC without required representation. We’ve seen businesses lose legal cases because they never received court documents.

Fix: Pay $100-150/year for a reputable registered agent service with a track record.

Not Getting an EIN Right Away

Some banks and vendors won’t work with you using just your Social Security Number. Plus, you’ll need the EIN for taxes anyway.

Fix: Get your EIN immediately after your LLC is approved. It’s free directly from the IRS and takes 10 minutes online.

Ignoring Annual Requirements

Many states require annual reports with filing fees. Miss the deadline and you’ll pay late fees, or worse, your LLC could be dissolved.

Fix: Set calendar reminders or use a compliance service that tracks deadlines for you.

Mixing Personal and Business Expenses

Using your personal bank account for business expenses can eliminate your liability protection — the main reason you formed an LLC.

Fix: Open a dedicated business bank account within 30 days of forming your LLC. Keep all business income and expenses separate.

For International Founders

Non-U.S. citizens can absolutely form an LLC in any U.S. state — no visa, green card, or residency required. You just need to follow a few extra steps.

Best States for International Founders:

Wyoming is popular for privacy and low costs ($100 filing fee, no state income tax, no annual franchise tax). Delaware works well if you plan to raise investor funding, as most investors prefer Delaware entities.

You’ll Need a U.S. Registered Agent:

Since you don’t have a U.S. address, you must use a registered agent service. We provide this service in all 50 states, giving your LLC the required U.S. presence for legal documents.

EIN Registration Takes Longer:

International founders usually can’t apply for an EIN online. You’ll need to fax Form SS-4 to the IRS, which takes 4-8 weeks versus instant online approval for U.S. residents.

U.S. Banking Is the Biggest Challenge:

Most traditional banks require you to visit in person with a U.S. address. Online business banks like Mercury, Relay, and Wise Business are more international-founder friendly, though requirements change frequently.

Tax Filing Requirements:

Foreign-owned single-member LLCs must file Form 5472 annually, even if there’s no U.S. tax owed. The penalty for not filing starts at $25,000, so this isn’t optional.

Work with a CPA who specializes in international tax — the rules are complex and change frequently. Don’t try to handle this yourself.

FAQ

Can I change states after forming my LLC?

Not directly. You’d need to dissolve your current LLC and form a new one in the other state, or register as a foreign LLC (which means paying fees in both states).

What happens if I can’t afford the ongoing costs?

Your LLC will eventually be dissolved by the state for non-compliance. You’ll lose liability protection and might owe dissolution fees to reactivate it later.

Do I need an attorney to form an LLC?

No, unless you have multiple members with complex ownership arrangements or need custom legal provisions. Most single-member LLCs are straightforward enough for online filing.

Can I form an LLC if I already have a sole proprietorship?

Yes, many people transition from sole proprietorship to LLC for liability protection. You’ll need to update your business bank account, contracts, and tax filings to reflect the LLC name.

How long does LLC formation actually take?

Filing takes 15-30 minutes online. State approval ranges from same-day (Delaware) to 4-6 weeks (New York). Most states process within 1-2 weeks.

What if my desired LLC name is taken?

Try variations or consider filing in a different state where it’s available. You can also use a DBA (doing business as) name for marketing while keeping a different legal name.

Is the cheapest state always the best choice?

No. Factor in ongoing costs, tax implications, and where you actually do business. A $50 filing fee doesn’t help if you’ll pay $300 annual fees forever.

Do I need business insurance after forming an LLC?

An LLC provides liability protection, but you might still want business insurance for property damage, errors and omissions, or industry-specific coverage.

Ready to Get Started?

Most LLC formations are straightforward — choose your state, file the paperwork, get your EIN, and open a business bank account. The process itself isn’t complicated, but getting all the details right matters for your ongoing compliance and liability protection.

At BusinessFormations.com, we handle the state filing, EIN registration, and ongoing compliance support in one streamlined process. We also provide registered agent service in all 50 states and help international founders navigate the extra requirements.

[Get started with your LLC formation here](https://www.businessformations.com/get-started/) — we’ll walk you through choosing the right state and entity type for your specific situation.