Starting your own business is a big step. If you’ve formed a Limited Liability Company—also known as an LLC—you’ve already taken an important legal step to protect yourself and make your business look more professional. But forming an LLC isn’t the end of the process. There’s something many new business owners don’t realize: LLCs come with ongoing fees.
These fees, often charged annually, are required by the state to keep your LLC in good standing. If you don’t pay them, your business could face penalties—or even be shut down.
In this guide, we’ll explain what these annual LLC fees are, why they exist, how much they typically cost, how they vary from state to state, and how to manage them wisely. Whether you’re thinking about starting an LLC or already have one, this guide will help you plan ahead and avoid surprises.
What Are LLC Annual Fees?
LLC annual fees are payments required by your state government to keep your LLC active and compliant. These are not optional. Even if you’re not making any money, your LLC still owes the state a fee just for existing.
Most states also require you to file a simple document every year—or every other year in some cases. This document usually updates your business address, members or managers, and other basic information.
Depending on where you live, this filing might be called:
- An annual report
- A biennial report
- A franchise tax report
- A periodic report
- An annual registration
While the names differ, the purpose is the same: the state wants to know your LLC is still active, and they want to collect a fee for maintaining it in their records.
Why Do States Charge These Fees?
It might seem frustrating that you have to pay money every year just to keep your LLC running, even if you’re not doing business. But there are a few reasons why states require this:
- Recordkeeping: The state uses these reports to keep your business information up to date.
- Revenue: These fees help fund state government operations.
- Accountability: Requiring reports forces inactive businesses to close out, keeping state records clean.
- Compliance: It encourages business owners to take their responsibilities seriously.
Think of it as a small “maintenance fee” for keeping your legal protection and official business structure.
How Much Do LLC Annual Fees Cost?
This is where things really vary. Some states charge nothing, while others can charge hundreds of dollars each year. Here’s a breakdown:
States with No Annual LLC Fees
Yes, a few states actually don’t charge anything to maintain your LLC. That means no annual reports and no yearly payments. Examples include:
- Arizona
- Mississippi
- Missouri
- New Mexico
- Ohio
- South Carolina
- Texas
But be careful: just because the state doesn’t charge an annual fee doesn’t mean you won’t owe taxes or licensing fees at the local level.
States with Low Fees (Under $100)
These states keep it affordable. You might pay somewhere between $10 and $80 per year:
- Colorado: around $10
- Kentucky: $15
- Hawaii: $15
- Georgia: $50
- Utah: $20
- Virginia: $50
- Washington: $60
This is manageable for most small business owners and solo entrepreneurs.
States with Moderate Fees ($100–$250)
These fees are still considered reasonable by most standards, but they can start to add up:
- Florida: about $139
- Illinois: around $75 (reduced from previous years)
- North Carolina: $200
- Maine: $85
- Connecticut: $80
These are common rates in the mid-range.
States with High Fees ($250–$800+)
Now we get into the more expensive states:
- Tennessee: $300 minimum (goes higher depending on the number of members)
- Massachusetts: $500 annual report
- California: $800 franchise tax (plus a separate $20 statement of information)
- Maryland: $300
- Delaware: $300 (even if you don’t do business there)
California is often criticized for its high fees—especially for small businesses that barely make any money. Delaware, even though it’s popular for big corporations, also charges LLCs a flat $300 annual tax.
How Often Are These Fees Due?
Most states require you to file and pay every year, but a few only ask for a filing every two years. These are called biennial reports. That means you only need to pay every other year, which reduces your ongoing costs.
For example:
- Indiana requires a report every 2 years with a small fee.
- Nebraska and the District of Columbia are also on a biennial system.
Make sure you know your state’s specific due date. Some states set the deadline based on the anniversary of your LLC’s formation, while others use a fixed date, like April 15 or the end of your LLC’s fiscal year.
What Happens If You Don’t Pay?
Ignoring your annual report or skipping the payment might seem harmless at first, but it can lead to serious trouble:
- Late Fees: Most states charge a penalty for late filings—sometimes up to $100 or more.
- Administrative Dissolution: If you don’t file for several months, the state may dissolve your LLC. That means you lose your liability protection and legal status.
- Reinstatement Costs: To get your LLC back, you may have to pay back fees, penalties, and reinstatement charges.
- Loss of Business Name: In some states, another company could register your name while your LLC is inactive.
- Tax Problems: If you don’t stay in good standing, you might also lose certain tax benefits.
Simply put: missing your annual fee can snowball into a much bigger headache. It’s easier and cheaper to stay current.
Are There Other Ongoing Costs Besides the Annual Fee?
Yes. While the annual report fee is the most common recurring cost, it’s not the only one. Other regular expenses may include:
- Registered Agent Service: If you hire a third party to be your registered agent, that’s usually $100–$300 per year.
- State Business Licenses: Some states or cities require annual license renewals.
- Local Permits: Your county or city may charge fees for signage, health inspections, or other permits.
- Franchise Taxes: Some states charge a tax on the privilege of doing business, which is separate from income tax.
- Publication Requirements: A few states require you to publish a notice in a newspaper after forming your LLC, which adds a one-time or annual cost.
Make sure you consider these in your annual budget. They can vary widely depending on your location and type of business.
How to Keep Track of Annual Fees
Staying organized can help you avoid surprises. Here are some tips:
- Set Calendar Reminders
Use your phone or computer calendar to remind you 30–60 days before your due date. - Sign Up for Email Notices
Most state agencies send reminder emails—make sure your contact info is up to date. - Use a Registered Agent Service
These companies can remind you and even file on your behalf. - Keep Copies of Everything
Always save digital or paper copies of your filings and receipts. - Check Your Business Mail
Important notices are sometimes mailed—not emailed.
Should You Hire a Professional to Help?
Some business owners prefer to handle filings themselves. That’s fine, especially if your state makes it easy to file online. But if you’re busy or feel unsure, it might be worth hiring help.
Professional filing services usually cost between $50 and $200 per year. They’ll handle the paperwork and ensure you don’t miss deadlines.
Advantages of hiring help:
- No missed filings
- Peace of mind
- Saves time
Disadvantages:
- Extra cost
- Some services may upsell you on things you don’t need
Can You Avoid Paying These Fees?
Not really. If you have an LLC, you’re required to pay annual fees in most states. If you don’t want to deal with that, you could consider:
- Sole Proprietorship: No LLC means no annual fee, but also no personal liability protection.
- General Partnership: Similar to a sole proprietorship, but for multiple people. Still lacks liability protection.
- Closing Your LLC: If you’re no longer operating, you can dissolve your LLC to avoid future fees.
But if you want to keep the legal and financial protection of an LLC, paying the fee is part of the deal.
Is an LLC Still Worth It?
Forming a Limited Liability Company (LLC) is one of the most popular choices for small business owners—and for good reason. But with annual fees, paperwork, and ongoing responsibilities, many wonder: Is an LLC still worth it in 2025?
In most cases, yes. An LLC offers a powerful layer of protection by separating your personal assets from your business liabilities. That means if your business is sued or falls into debt, your home, car, and personal savings are generally safe. This protection alone makes the LLC a smart investment.
Another major advantage is flexibility. LLCs are easy to manage compared to corporations. You don’t need a board of directors or shareholder meetings. You also have options for how you’re taxed. By default, profits pass through to your personal tax return, avoiding double taxation. But if it makes sense for your business, you can choose to be taxed as an S corporation to potentially save on self-employment taxes.
On the flip side, LLCs do come with costs. Most states charge an annual fee or require you to file a report to stay active. Depending on your state, this can range from $0 to $800 or more. If you’re running a very small or part-time business, these fees might feel like a burden.
Still, the long-term benefits often outweigh the hassle. An LLC boosts your business’s credibility, helps with banking and financing, and gives peace of mind when dealing with customers, contracts, or employees.
In short, if you’re serious about protecting yourself and building a real business, an LLC is absolutely worth it. Just be sure to understand your state’s rules, set aside money for annual fees, and stay organized with deadlines. The small investment in maintaining your LLC can save you big in the long run.
Yes—absolutely. Even with the annual fee, an LLC provides huge benefits:
- Protects your personal assets
- Adds credibility to your business
- Offers flexible taxation options
- Makes it easier to raise money or get loans
Final Thoughts
Owning an LLC is a smart move for most small business owners, freelancers, and startups. But it’s important to understand that forming the company is just the beginning. You’ll need to budget for annual fees and stay on top of your state’s requirements.
Here’s a quick recap:
- Most states charge an annual or biennial fee for LLCs
- Fees range from $0 to over $800, depending on where you live
- Missing a deadline can lead to penalties or even losing your LLC
- Plan ahead and set reminders to avoid surprises
- Consider using a professional service if you’re overwhelmed
Running a business comes with responsibilities, and LLC annual fees are just one of them. But with a little organization and planning, they’re easy to manage—and well worth the peace of mind.