How Much Does It Cost To Start An LLC? (2024 Guide) (2024)

Formation and maintenance costs associated with LLCs can add up. Handling the process yourself can keep costs low. Here is how much it costs to start an LLC:

• Filing fees: $35–$500
• Operating agreement: $0–$600
• Publication: $40–$1,500
• DBA fees: $10–$100
• Registered agent: $0–$300
• Business license fees: $50–$1,000-plus
• Annual report fees: $10–$800
• Total: $150–$4,000-plus

Other expenses including the startup and ongoing operational costs for an LLC should also be considered. These include website development, marketing initiatives and employee-related expenses. Based on the profitability of your LLC, taxes are another consideration.

There are several fees associated with the creation and filing of legal documents to form your LLC. There are also some tangential costs associated with registering your LLC with state and local authorities. For example, you’ll want to make sure you have all the proper permits, licenses and certificates required by local, state and federal governments. How much you spend, ultimately, is a function of your willingness (or capability) to do it yourself.

Filing Fees

For most entrepreneurs, filing fees will account for the majority of their LLC startup costs. You don’t need a lawyer to file articles of organization to form an LLC, but it doesn’t hurt to use an LLC filing service, especially when you consider the low costs associated with these services. There are several service providers that can register your LLC for less than $50 plus the state fee.

Using a legal services provider is well worth the cost. It can reduce the risk of improperly filing paperwork, which can lead to additional fees to fix the application or reapply—not to mention all that wasted time.

Operating Agreement

Typical costs: $0 to $200

An operating agreement is an internal document that describes how your LLC will be run, the roles and contributions of the owners (members) and the way decisions will be made.

Anyone can create an operating agreement on their own for free. But when you are doing something like dividing profits and losses amongst ownership, you want to get professionals involved to make sure everything is done correctly. Legal service providers can handle the task for anywhere between $50 to $200, or you can hire a local lawyer. It’s a small cost to pay to ensure everyone is on the same page and avoid future disputes.

Publication

Typical costs: Varies based on state and local newspapers’ rates therein

Entrepreneurs in New York, Nebraska or Arizona are subject to additional LLC costs in the form of publication. In short, LLCs in these states have to publish notices for a specified period of time in one or more newspapers across one or more cities or counties.

EIN Application

Typical costs: $0

An EIN application is used to apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). An EIN is a unique nine-digit number assigned to businesses and other entities for tax purposes.

You can apply for your EIN through various channels, including online or by fax or mail with the Form SS-4. The online application is the most preferred and efficient way to get an EIN.

Applying for an EIN requires specific details about your business, such as its legal name and address, entity type, names of member(s), Social Security numbers and business activity. Once the IRS approves, an EIN will be assigned. If done online, the approval is instant.

Acquiring an EIN is free, with applications being accepted directly by the IRS website. You can pay a small fee to use an authorized third-party service provider to apply for you if you wish. Be mindful when applying for your EIN that accurate and up-to-date information is provided when filling out applications to avoid potential compliance issues in the future.

DBA Fees (if Using)

Typical costs: $10 to $100

DBA, which stands for Doing Business As, is a trade name a business uses that differs from its legal one. Every state has a different application and filing fee for a DBA. These fees can consist of:

• Filing fee
• Publication costs
• Renewal fees
• Notary fees

In addition to the initial registration fees, getting a DBA may require additional business licenses, which can add to the total of how much it costs to set up an LLC. If you want exclusive rights over the name of your DBA beyond its local area, trademark registration might be worth exploring, which requires separate fees at both federal and state levels.

Specific information regarding the cost of a DBA can be found on your secretary of state’s website or business registration office website.

Once you’ve registered, you’ll have to take care of LLC costs associated with maintaining it. This includes state and federal taxes, reporting fees and the cost of any services used to maintain the LLC.

Taxes

Typical costs: Varies from state to state

Like any other person or entity, LLCs are subject to taxation. The federal government doesn’t take its cut directly from the LLC. Rather, it’s collected from the profits of the owners as a pass-through income. But LLCs can write off certain startup costs—up to $5,000—including attorney fees, market research, office space, equipment and so on.

Most states tax LLC profits in the same way as the federal government—profits pass through to members’ personal tax returns. However, some states also have mandatory LLC franchise taxes. For example, the franchise fee in Delaware is $300, while California has a minimum $800 annual franchise tax.

At the state government level, LLCs may also be subject to reporting fees. Reporting fees are variable from state to state, but average somewhere around $100 a year.

Registered Agents

Typical costs: $0 to $300

A registered agent is the main point of contact between the LLC and the state. The registered agent accepts service of lawsuits and other legal documents and can accept office mail. Any adult can be a registered agent, so long as they reside in the state in which the LLC is registered and are available during business hours. This lack of restrictions means that businesses don’t have to endure any costs to declare a registered agent. With that said, there are service providers that will serve as your registered agent for $100 to $300 per year.

Business License Fees

Typical costs: Varies depending on the type of license

Costs associated with a business license for an LLC can depend on many factors. Below are some factors that affect the costs associated with LLC business license fees:

• Location
• Type of business
• License duration
• Revenue of your LLC
• Licensing at multiple levels

Some permits and licenses can be more costly due to complex regulatory requirements or the nature of a business activity. Here are some of the more expensive business licenses:

• Liquor license: Liquor licenses can be one of the more costly permits, particularly in areas with a high demand for alcohol-related businesses. Their costs can range anywhere from several hundred to several hundred thousand dollars.
• Casino license: When operating a casino or other gambling establishment, licensing and regulatory costs can quickly amount to millions of dollars depending on your jurisdiction. Take Nevada, for example, which has an Operator of Interactive Gaming License that costs $500,000 for the first two years.
• Environmental permits: Businesses involved in heavy manufacturing, mining or other industries with substantial environmental impacts may require costly environmental permits for compliance with environmental regulations, and costs can add up over time.
• Healthcare facilities: Establishing and operating healthcare facilities such as hospitals or nursing homes often involve extensive licensing fees and strict regulatory compliance requirements.
• Transportation and trucking: Commercial transport companies that run large fleets of trucks need various permits and licenses that incur fees and compliance costs that add up quickly.

To accurately assess your LLC’s license fees, contact your local city/county government and state business regulatory agency. They can provide details regarding required licenses, associated costs and any special requirements unique to your type of business.

Annual Report Fees

Typical costs: $10 to $800

State filing fees are the primary cost associated with annual reports, and they vary significantly by state, from as little as zero to several hundred dollars or even more depending on an LLC’s revenue or number of members. Be mindful of your annual report due date in your state. Missing this deadline can incur late fees, penalties, administrative dissolution or the rescission of your limited liability protection.

If you need to update your LLC’s information, you may be required to amend it with its annual report or file an amendment. Changes such as hiring a new registered agent, shifting member structure or updating the business address could all incur separate fees.

Foreign LLCs registered outside their home state may need to file annual reports in both jurisdictions where they qualify as foreign LLCs. Each state has different filing fees associated with this process.

If your LLC falls out of good standing due to failure to file annual reports and you decide later to reinstate it, additional reinstatement fees may need to be considered.