How much does it cost to start an LLC in different States of the US?
Need to form an LLC? Cost is one of the primary things you must sort out. There are several expenses to be made when starting an LLC.
We will be discussing these startup costs and more.
This article aims to provide as much information as required. This is aimed at helping you prepare beforehand and also make informed choices.
Cost of Forming An LLC
Successfully forming an LLC depends on meeting all obligations required of you. Cost is an important part of such obligations. As you read through, you’ll find different costs you are likely to incur. One of the factors that influence this is your location.
Filing for an LLC is done at the state level. Here, no uniform fees apply. As a result, certain states demand higher fees than others. Such fees may be paid annually or biennially.
Still, certain states have no ongoing costs at all. We will cover this in greater detail later on.
Several options are available when filing an option. This includes taking upon yourself the responsibility of filing with your state. This might be more demanding than the others. You will have to find out the LLC filing fees for your state. The second option available to you involves hiring a lawyer. Typically fees will range from $1,000.00 to $2,000.
The third option includes the use of an online website. This is made available for incorporation purposes. The cost of applying for an LLC using option will cost between $99 to $900. In the event you pay the upper limit ($900) fee, it will cover the mandatory Employer Identification Number (EIN).
All the methods above will attract state filing fee costs. There’s no fixed fee when it comes to state filing fees. These differ from one state to the other. Filing costs typically range between $40 to $500. More details on this will be provided shortly.
Name Reservation Fees
To form an LLC in certain states, a name reservation fee will need to be paid. Alabama is one of such. However, this fee isn’t much and will cost anywhere around $10 to $28. While this is compulsory for LLC filings, it can be skipped in other states.
After forming an LLC, certain states require that you put the word out by publishing a statement of formation in local dailies. Is your state among this list? If you live or will be forming an LLC in New York, Pennsylvania, Nevada, Arizona, and Nebraska, then you’ll incur this cost.
There’s no uniform cost for publication fees across these states. You’ll pay as little as $40 in certain states while it will cost as much as $2,000 in others to publish your statement of formation.
Not all states charge the franchise tax to newly created LLC’s. While most taxes are charged on income, the franchise tax is calculated based on the net worth or the capital held by your business entity. There is no uniform franchise, therefore this will vary with different states. You’ll need to find out what applies to your state.
After paying the required fees for the formation of an LLC, additional costs will still apply. These are annual fees and known as the maintenance cost. It is paid to keep your LLC in good standing.
So, what if you don’t pay? Not paying this fee will affect your business. It might lead to the state blacklisting your LLC. Most states require the payment of maintenance costs.
The Best Place To Form An LLC
We’ve talked about certain states requiring fees for some filing requirements. To cut down on cost, some readers might ask which location or state is best to file for an LLC. The answer to this question will be to form your LLC in the state you wish to do business.
Why? Doing otherwise will attract unwanted costs as you’ll need to file additional paperwork which will cost you more.
LLC Filing Cost For Each State
For a better understanding of the cost implications for LLC filing, we must provide LLC filing costs for all states. That way, you have an understanding of what fees are applicable.
We’ve included both setup costs as well as recurrent or ongoing costs.
State Setup Costs Recurrent/Ongoing Costs
- Alabama $200+ Annual Privilege License
- Alaska $250 $200 biennially
- Arizona $50 incl. publishing Nil
- Arkansas $50 $150 annually
- California $70 Annual franchise tax + $20 annually
- Colorado $50 $10 annually
- Connecticut $120 $20 annually
- Delaware $90 $300 annual franchise tax
- District of Colombia $220 $300 biennially incl. annual franchise tax
- Florida $125 $138.75 annually
- Georgia $100 $50 annually
- Hawaii $50 $15 annually
- Idaho $100 Nil
- Illinois $150 $250-$300 annually
- Indiana $95 $50 biennially
- Iowa $50 $30 – $45 biennially
- Kansas $160 $50 – $55 annually
- Kentucky $40 $15-$30 annually+annual entity tax
- Louisiana $100 $30 annually
- Maine $175 $85 annually
- Maryland $100 $300 annually
- Massachusetts $500 $500 annually
- Michigan $50 $25 annually
- Minnesota $155 Annual Partnership Tax
- Mississippi $50 Nil
- Missouri $50 Nil
- Montana $70 $20 annually
- Nebraska $100+Publishing Requirement $10 – $13 biennially
- Nevada $75 $125 annually
- New Hampshire $100 $100 annual+annual enterprise tax
- New Jersey $125 $50 annually
- New Mexico $50 Nil
- New York $200+publishing requirement $9 biennial+annual filing fee
- North Carolina $125 $200 annually
- North Dakota $135 $50 annually
- Ohio $99 Annual commercial activity tax
- Oklahoma $100 $25 annually
- Oregon $100 $100 annually
- Pennsylvania $125+publishing requirement Nil
- Rhode Island $150 $50 annually
- South Carolina $110 Nil
- South Dakota $150 $50 annually
- Tennessee $300 minimum annual franchise & excise tax
- Texas $300 annual fee
- Utah $70 $20 annually
- Vermont $125 $35 annually
- Virginia $100 $50 annually
- Washington $180-$200 $60 annually
- West Virginia $100 $25 annually
- Wisconsin $120-$170 $25 annually
- Wyoming $100-$102 $50 or 0.02% value of annual assets
What Option To Use
We had earlier mentioned that you can either handle your LLC application process yourself, hire a lawyer or use the incorporation website. The option you choose depends on what your needs are. It’s best to allow a professional to handle the process for you if you have a lot of things on your hands. That way, you are saved a lot of stress.
Starting or forming an LLC involves different cost angles. We’ve discussed extensively on these in addition to the filing fees for each state. You only need to look up your state from the list to find applicable LLC formation fees.