Starting a business is exciting. But before you get too deep into choosing logos and dreaming up product names, there’s an important legal step many small business owners take: forming an LLC. One of the first questions people ask is: How much will it cost to form an LLC?
The short answer? It depends on your state. The long answer? Well, that’s what this guide is here for.
In this article, we’ll break down everything you need to know about LLC filing fees, including:
- What an LLC filing fee actually is
- How much you’ll pay depending on where you live
- Other hidden or ongoing costs
- Smart ways to save money
- Real-world examples
- Myths and facts about forming your LLC
Let’s dive in—with zero fluff and no confusing legal talk.
Quick Recap
- LLC filing fees vary widely—from $35 to $500.
- Ongoing costs also vary—from $0 to $800+ per year.
- You may also pay for registered agents, licenses, and publications.
- You can save money by filing yourself, being your own agent, and choosing your state wisely.
- Be cautious about forming out-of-state unless you fully understand the consequences.
What Is an LLC Filing Fee?
When you form a Limited Liability Company (LLC), you’re basically telling the state, “Hey, I’m starting a business, and I want to keep my personal assets separate from my business debts.” That’s the entire idea behind an LLC.
But the government won’t do this paperwork for free. So they charge you a one-time filing fee to register your LLC.
This payment goes to the Secretary of State’s office (or a similar government agency) to process your Articles of Organization. That’s the main document that makes your LLC official.
Why This Fee Matters
The filing fee is more than just a payment—it’s your business’s entry ticket into the legal world. Without paying it, you can’t:
- Get legal protection for your personal assets
- Open a business bank account
- Apply for business licenses
- Enter into contracts as a business
In short: no fee, no LLC.
How Much Are LLC Filing Fees?
Here’s the tricky part: the cost depends entirely on your state.
Some states are super affordable. Others charge a hefty sum. Here’s a general breakdown:
Lowest-cost states:
- Montan – $35
- Kentucky – $40
- Mississippi – $50
- New Mexico – $50
Mid-range states:
Highest-cost states:
- Massachusetts – $500
- Tennessee – Can exceed $300 depending on number of members
- Nevada – Over $400 including required licenses
So the national average? About $130 for that initial filing.
One-Time Fee vs Ongoing Costs
One big mistake new business owners make is assuming the LLC fee is a one-time thing and then they’re done forever.
Unfortunately, that’s not the case.
Most states require you to pay annual or biennial fees to keep your LLC active. This usually comes in the form of:
- An annual report
- A statement of information
- A franchise tax or renewal fee
These ongoing fees range from $0 (in a few lucky states) to $800 or more per year.
Examples of Ongoing Fees by State
Here’s how it breaks down in some major states:
- California: $70 to start, plus $800 per year minimum tax
- Delaware: Around $110 to start, $300 per year franchise tax
- New Mexico: $50 to start, $0 annual fees (yes, zero!)
- Florida: $125 to start, $138.75 annually
- Texas: $300 to start, but no annual fee if your business revenue is under a certain amount
Some states, like Missouri and Ohio, also don’t charge annual report fees—so they’re great if you want to keep costs down.
Other Costs You Might Not Expect
The filing fee is just the beginning. Here are some additional costs that catch new business owners off guard:
1. Registered Agent Fees
Every LLC needs a registered agent. This is someone (or a company) who agrees to receive legal documents for your business. You can be your own agent in many states, but if you hire someone, it usually costs $50–$200 per year.
2. Publication Requirements
States like New York and Arizona require you to publish a notice in a local newspaper that you formed an LLC. That might sound easy, but it can cost anywhere from $100 to over $1,000 depending on where you live.
3. Business Licenses and Permits
Depending on your industry and location, you may need local or state business licenses. These can cost $50 to several hundred dollars and often need annual renewal.
4. Expedited Processing
Need your LLC formed fast? Some states charge extra for same-day or 24-hour processing. This fee varies but can add another $25–$100+.
How to Save Money on LLC Costs
Good news: there are some smart ways to lower your overall LLC costs.
1. Do It Yourself
Most states allow you to file your LLC online. If you’re comfortable with basic paperwork, you can avoid paying third-party services or lawyers.
2. Be Your Own Registered Agent
If you live in the same state where your LLC is based and are comfortable being available during business hours, you can serve as your own registered agent.
3. Choose Your State Wisely
If you live near a border, compare the fees of nearby states. But be careful—if you form your LLC in another state but operate in your home state, you’ll need to register as a “foreign LLC” in your home state and pay two sets of fees.
4. Avoid Overpaying for Services
Some online services charge hundreds of dollars for things you might not need. Before purchasing, review what’s actually required in your state.
Common Myths About LLC Fees
Let’s bust a few common misconceptions.
Myth 1: It’s cheaper to form your LLC in a “tax haven” state.
Truth: If you do business in your home state, you’ll have to pay fees there anyway. Forming in states like Delaware or Wyoming may only save money if you’re a large business or raising outside capital.
Myth 2: I only pay the fee once.
Truth: The initial fee is one-time, but most states charge you every year to keep your LLC in good standing.
Myth 3: Filing through a lawyer is mandatory.
Truth: It’s not. Many small business owners file their own LLCs directly through the state.
LLC vs. Other Business Types: What’s Cheaper?
Forming a sole proprietorship is free or nearly free in most states. You just register a business name (sometimes called a DBA).
A corporation, on the other hand, often costs more to form and maintain than an LLC. There are more rules, filings, and formalities involved.
An LLC hits the sweet spot between cost and legal protection.
Real-World Cost Comparisons Over 5 Years
Let’s look at how much you’d spend over five years in different states.
Scenario: Solo consultant running a simple service business
| State | Formation Fee | Annual Fee | 5-Year Cost |
|---|---|---|---|
| New Mexico | $50 | $0 | $50 |
| Montana | $35 | $20 | $115 |
| California | $70 | $800 | $4,070 |
| Florida | $125 | $138 | $677 |
| Massachusetts | $500 | $500 | $3,000 |
Clearly, your location makes a huge difference.
When High Fees Might Be Worth It
Yes, California and Massachusetts are expensive—but there can be reasons to still form there:
- You live and operate in the state
- Your clients are there
- You plan to hire local employees
- You want to stay compliant without registering in two states
Some businesses also benefit from forming in Delaware or Wyoming because of investor preferences or strong asset protection laws—but this usually applies to startups and large-scale operations.
Checklist: Before You File Your LLC
Here’s what you should review before filing:
- What’s the one-time filing fee in your state?
- What are the yearly or biennial fees?
- Do you need to publish a notice in a newspaper?
- Do you need any licenses or permits?
- Will you act as your own registered agent?
- Will you be doing business in more than one state?
Knowing this in advance avoids surprises and helps you budget correctly.
Final Thoughts: Is It Worth It?
Forming an LLC comes with costs—some upfront, some recurring. Naturally, many small business owners wonder, “Is it really worth paying these fees just to set up my company?”
In most cases, the answer is yes—and here’s why.
An LLC provides a crucial benefit that’s hard to put a price on: limited liability protection. This means your personal assets—like your home, car, and savings—are generally protected if your business is ever sued or runs into debt. Without an LLC, your personal and business finances are legally tied together. That’s a huge risk.
Beyond protection, an LLC also gives your business credibility. Clients, vendors, and banks often take businesses more seriously when they’re formally registered. It shows you’re committed and operating professionally. If you plan to open a business bank account, apply for credit, or bid for contracts, having an LLC will make that process smoother.
Now, let’s talk money. While some states are more expensive than others, many charge under $150 to form an LLC. Ongoing annual fees vary, but in several states, they’re minimal or even nonexistent. When you spread those costs over a year—or over several years—the expense becomes relatively small compared to the legal and professional advantages you gain.
Of course, if you’re running a low-risk, part-time side hustle, you may decide that staying a sole proprietor makes more sense for now. But if you’re serious about growing your business, working with clients, hiring people, or protecting what you’ve built, forming an LLC is a smart, long-term investment.
In short: Yes, it’s worth it. Not just for the peace of mind, but also for the legal structure, tax flexibility, and professional credibility it brings. Think of the filing fee not as a burden—but as the first real investment in your business’s future.