How Much Does It Cost to Start an LLC?
Wondering how much does it cost to start an LLC? The short answer: most people spend between $50 and $500 to start an LLC, with the exact amount depending on your state filing fee. Some states charge as little as $40, while others reach $500. On top of that, you may pay for a registered agent, annual report fees, and optional services. This guide breaks down every cost so there are no surprises.
How Much Does It Cost to Start an LLC?
The main cost to start an LLC is the one-time state filing fee for your articles of organization, which ranges from about $40 to $500. The national average is roughly $130. Beyond that initial filing, your total cost depends on whether you hire a registered agent or use a formation service.
| Cost | Typical Price | Required? |
|---|---|---|
| State filing fee | $40–$500 (avg ~$130) | Yes |
| Registered agent | $0–$300/year | Optional (can be yourself) |
| Operating agreement | $0 (free templates) | Recommended |
| EIN from the IRS | Free | Yes |
| Annual report fee | $0–$300/year | Varies by state |
| Name reservation | $10–$50 | Optional |
State Filing Fees: The Biggest Cost
Your state filing fee is the unavoidable part of the cost to start an LLC. Kentucky and Arkansas are among the cheapest at around $40–$50, while Massachusetts charges $500. Most states fall in the $50–$200 range. Check your secretary of state’s website for the exact figure.
Ongoing Costs to Budget For
Starting an LLC is not just a one-time expense. Many states charge annual or biennial report fees to keep your LLC active, and some, like California, add a yearly franchise tax. Budget for these recurring costs so your LLC stays in good standing.
How to Keep Your LLC Costs Low
You can minimize the cost to start an LLC by filing yourself instead of paying a service, acting as your own registered agent, getting your EIN free from the IRS website, and using free document templates. Learn the full process in our guide on how to start an LLC.
Is an LLC Worth the Cost?
For most owners, yes. The liability protection alone can save you far more than the filing fee if your business is ever sued. If you are still weighing options, compare an LLC vs a sole proprietorship or a DBA vs an LLC. To get organized, browse our free money and expense forms and read our full guide on how to start a business.
LLC Cost by State: Cheapest and Most Expensive
The single biggest factor in how much it costs to start an LLC is where you form it. State filing fees vary widely, so the same business can cost $40 in one state and $500 in another. If you operate primarily online or from home, you will generally form your LLC in the state where you live and do business, rather than chasing a cheaper state and paying foreign registration fees later.
| State | Filing Fee | Notes |
|---|---|---|
| Kentucky | ~$40 | One of the lowest in the U.S. |
| Arkansas | ~$45 | Low online filing fee |
| Arizona | ~$50 | No annual report fee |
| Texas | ~$300 | No state income tax |
| California | ~$70 + $800 franchise tax | High ongoing cost |
| Massachusetts | ~$500 | Highest filing fee |
Registered Agent Costs Explained
Every LLC must list a registered agent: a person or company that accepts legal documents on the business’s behalf during normal business hours. You have two options, and they affect how much it costs to start an LLC. You can act as your own registered agent for free if you have a physical address in the state and are available during business hours. Alternatively, you can hire a professional registered agent service, which typically costs $100 to $300 per year and keeps your home address off public records.
For most new owners on a tight budget, serving as your own registered agent is the cheapest route. However, if you value privacy, travel often, or run your business from home, a paid service can be worth the modest annual fee.
DIY vs. Using a Formation Service
You do not have to pay anyone to start an LLC. Filing the articles of organization yourself through your state’s website means you only pay the state fee. Formation services such as legal filing companies charge an extra $0 to $300 on top of the state fee, often bundling a registered agent, operating agreement template, and reminders for annual filings.
- File it yourself: Lowest cost. You pay only the state filing fee and complete the paperwork directly.
- Use a formation service: More convenient. You pay a premium for speed, document templates, and compliance reminders.
- Hire an attorney: Most expensive, usually $500 to $1,500, and best reserved for complex multi-member or investment structures.
Hidden and Optional LLC Costs
Beyond the filing fee, a few extra costs can sneak into your budget when you start an LLC. Knowing about them in advance helps you avoid surprises and plan accurately.
- Business licenses and permits: Depending on your industry and city, you may need a local license. Learn more in our guide on how to get a business license.
- Name reservation: Optional $10 to $50 fee if you want to lock in your name before filing.
- Doing-business-as (DBA) name: If you operate under a different brand, expect a $10 to $100 filing. See DBA vs LLC.
- Business bank account: Usually free to open, but some banks require a minimum deposit. See how to open a business bank account for an LLC.
- Annual report and franchise taxes: Recurring fees that keep your LLC in good standing.
Documents You’ll Need to Start an LLC
Having the right paperwork ready keeps the cost to start an LLC low because you avoid paying others to prepare it. At minimum, you will need your articles of organization, an operating agreement, and an EIN confirmation from the IRS. You can prepare many of these with free templates instead of paying for them. Browse our documents you need to start a business checklist and our free money and expense forms to get organized before you file.
The Bottom Line
So, how much does it cost to start an LLC? Plan on $50 to $500 for the state filing fee, plus optional costs like a registered agent ($0 to $300 a year) and annual report fees. The leanest path, filing yourself, acting as your own agent, and getting a free EIN, can keep your total startup cost under $100 in many states. Spend a little time comparing your state’s fees, and an LLC is one of the most affordable ways to protect your personal assets while running a business.
Frequently Asked Questions
Can I start an LLC for free?
No state lets you form an LLC for completely free because every state charges a filing fee. However, you can keep costs to just that fee by filing yourself and using free templates and a free EIN.
What is the cheapest state to start an LLC?
States like Kentucky, Arkansas, and Montana have some of the lowest filing fees, around $40–$50. However, it is usually best to form your LLC in the state where you actually do business.
Are there hidden costs to starting an LLC?
The most commonly overlooked costs are annual report fees, registered agent services, and state franchise taxes. Factor these in when budgeting for how much it costs to start an LLC.