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An Ultimate LLC Costing Guide

Max Smith

Reading Time: 5 minutes

Are you estimating the total cost to start an LLC? It depends mainly on the state filing fees and the ongoing fees to maintain your LLC.

Having an LLC protects your personal assets and grows your business. It’s inexpensive compared to other business formations. But it’s better to get the costing idea to make your financial budget plan and face no financial lack. 

So, let’s go into the overall cost of setting up an LLC.

The forming cost of an LLC largely depends on the state where you are starting it and the professional servicing cost. The state fee and the cost of hiring service providers are the least to pay to form an LLC.

The overall cost to set up an LLC is shown below. 

Cost Name

DIY

Lawyer

Online Incorporation Website

Cost of Service

$0

$1,000 - $1,500

$99 - $900

State Fees

varies by state  

varies by state

varies by state 

Registered Agent

$0 - $125/year

$200 - $500/year

$100 - $300/year

Operating Agreement

$0 - $200

$0 - $500

$50 - $100

EIN

$0 - $100

$50 - $100

$50 - $100

Annual Report

varies by state

varies by state

varies by state

TOTAL

$0

$1,050 - $2,100

$199 - $1,100

LLC Startup Costs

The cost to start an LLC is not the same in every state. The state fees and the service provider’s fees differ in various ways. But you may also pay for additional services and expertise. 

Let’s go deep into the LLC startup costs below.

Fees for Filing an LLC/Articles of Incorporation

It’s the beginning cost to form an LLC. Prepare the articles of incorporation and submit them to the secretary of state.

The filing fees vary by state. Usually, it ranges from $40 to $500. The typical expenditure is around $100 to $150. The cost also includes the legal services charge of $50.

Services of Registered Agents

Hiring a registered agent is a good idea, but it is optional. You may need expert help to form an LLC. In that case, it becomes an expense from the beginning of an LLC. 

But if you can prepare and submit files yourself, you may hire an agent later.

They can understand and complete the legal document process efficiently. The service charges between $50 and $300 per year. 

Publication: LLC Formation Notice

If you are starting an LLC in Arizona, Nebraska, or New York, you must bear the publication cost. Local newspapers will publish the notice of your LLC’s opening in these states. 

It costs between $40 and $2,000. The price depends on the location and the number of weeks the publication will run. In New York, there’s a $50 filing fee with the state.

Operating Agreement, LLC

An essential document for an LLC is an operating agreement. If you have one operating agreement from the beginning, it may avoid future disputes.

The cost is nothing if you make it by yourself, but you can get the help of service providers or lawyers. It ranges from $50 to $200.

Reservation of Business Name

If you are registering an LLC in Alabama, you get the chance to reserve the business name. It costs less than 50 USD. 

LLC Formation Service

There are legal service providers to help you. It costs from $40 to $350. They also provide extra services and offer packages for better service. 

EIN

Getting an EIN (Employer Identification Number) is essential for tax. If you get service providers, they will make the process with a fee. 

Otherwise, you can also do it at no cost. It’s good to get an EIN at the start of an LLC.

Maintenance Cost

Once you start an LLC, there’s a cost to running it. Let’s have a look at the costs of operating your LLC.

Annual and Biennial Reporting Fees

LLCs submit a report annually or biennially to the state for a fee. It ranges from $10 to $500. The cost increases depending on the number of members in LLCs. 

For example, in New York, there’s a minimum fee of $325 and a maximum fee of $10,000. Other states charge a flat fee of $20 a year.

Franchise, Excise, and State Taxes

LLC does not pay taxes directly to the federal government. But its payment passed through to the owner’s account. So, the owners pay taxes. The tax depends on the state flat rate, LLC revenue, assets, etc.

The minimal tax in California is $800 per year. Other states, such as Delaware, have a lower rate of $250 per year.

Getting a Business License

In some states, LLCs need to pay for licensure. It helps the LLC operate its business within the boundaries of the state or county. 

You can apply for a license or get an agent’s help. It will cost around $50. You should keep renewing it annually or biennially.

Other Potential LLC Costs

There are also some extra costs to bear. It will help to run your LLC legally and successfully.

Registration of a DBA

DBA name is a fictitious name. It’s used without changing the original legal name of your LLC. Depending on the state, you can get a fictitious name for branding, costing you $10 to $100.

Fees for Expediting

There are various expenditures for an LLC while forming. The cost varies by state.

Lawyer Fees

Get the help of an attorney and complete your LLC’s legal documents. It will cost you around $425 on average.

URLs and Websites

You may spend more to get a website for your LLC’s online presence.

Fees for Certified Copies

Spend the extra money to get certified copies of your LLC’s legal documents (articles of organization).

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LLC Filing Process

Let’s look at the cheapest LLC formation process.

Step 1: Select a Distinctive Name

Get a unique, available, and business-related name.

Step 2: Submit Required Documents

Let’s see some of the essential documents to submit.

  • Your LLC’s name
  • Names of the members
  • Address and registered agent name
  • Business objectives
  • An operating agreement
  • The intended lifespan of the company

Step 3: Declare Your New Company

In some states, like Arizona and New York, you need to publish your new LLC company opening in local newspapers.

Conclusion

So now, do you know the total cost to start an LLC? It will help you form an LLC more efficiently. Otherwise, it may get delayed in forming an LLC because of a lack of finances.

Hopefully, you get a clear concept of the cost of starting an LLC. Make your financial plan and take the first step to form your new LLC!

Frequently Asked Questions

What does it cost to set up an LLC?

You may spend an average of $50 to $500 to set up an LLC. But the cost varies by state. There are also maintenance and other fees to add to your LLC.

Is a registered agent required for an LLC?

Except for New York City, you need a registered agent to establish your LLC. You can pay an agent or appoint someone from the company to maintain your LLC paperwork.

Is an EIN free?

Yes! You can visit the IRS’s official website and apply for an EIN without cost.

Are there additional costs beyond the filing fee?

Yes. You may pay for legal help, registered agent fees, and the getting of necessary licenses or permits.

Are there ongoing costs after formation?

There are ongoing costs to maintain your LLC. It includes annual report filing fees, taxes, and any required business licenses or permits. The charges also vary by state.

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