Wondering how much does it cost to make an LLC? The truth is, it’s way cheaper than most people think—and honestly, it’s one of the smartest investments you can make for your business. Whether you’re launching a side hustle or going all-in on your entrepreneurial dream, forming an LLC doesn’t require breaking the bank.
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State Filing Fees Breakdown
Let’s start with the core expense: state filing fees. Every state charges different amounts to file your Articles of Organization, which is the document that officially creates your LLC. In 2024, these fees range from practically nothing to a few hundred dollars depending on where you incorporate.
Wyoming and Nevada are known for being business-friendly with lower filing fees (around $100-$150), while states like California and New York can run you $200-$500 just for the initial filing. Some states like Louisiana charge as little as $60, while others like Massachusetts might hit you with $500. The bottom line? Your state location matters more than you’d think when calculating how much does it cost to make an LLC.
Most states fall somewhere in the $75-$150 range, which isn’t terrible. The key is knowing your state’s specific requirements before you start the process. Check your Secretary of State’s website—that’s your official source for accurate, up-to-date filing fees.
Business License & Permits
Here’s where things get a bit fuzzy because it depends entirely on your business type and location. A general business license from your city or county typically costs $50-$400, but some municipalities charge based on your projected revenue or business type.
If you’re running a service-based business from home, you might get away with just a basic business license. But if you’re opening a restaurant, salon, or retail shop, you’re looking at additional permits: health permits ($100-$500), building permits, zoning approvals, and possibly liquor licenses if applicable. These can easily add $500-$2,000 to your startup costs.
Don’t skip this step. Operating without proper licenses isn’t just risky—it can result in fines that dwarf your original filing costs. Call your local city hall or county clerk’s office and ask what licenses your specific business needs.
Registered Agent Services
Most states require you to designate a registered agent—someone who receives legal documents and official correspondence on behalf of your LLC. You have two options: do it yourself (if you have a physical address in that state) or hire a professional registered agent service.
If you use a professional service, expect to pay $75-$300 per year. Companies like LegalZoom, Rocket Lawyer, and local registered agent services handle this for you. If you’re operating in multiple states, this cost multiplies. Some people use their home address as their registered agent address (if state law allows), which saves money but means legal documents show up at your house.
This is one of those costs that recurs annually, so factor it into your long-term budget. It’s boring, but it’s necessary for maintaining your LLC’s good standing.
Legal Documentation Expenses
Beyond the state filing, you’ll need proper documentation to protect your personal assets and run your business smoothly. An Operating Agreement is your internal rulebook—it outlines how your LLC operates, member responsibilities, profit distribution, and what happens if someone wants to leave.
You can find templates online for $20-$50, or hire a business attorney to draft one for $300-$1,000. If you’re the sole member, a template usually works fine. If you have multiple members or complex ownership structures, investing in an attorney is smart money spent.
You might also need an Employer Identification Number (EIN) from the IRS, which is free. Get this even if you’re a solo operator—it keeps your personal and business finances completely separate, which is the whole point of forming an LLC in the first place.
Ongoing Compliance Costs
Here’s what catches people off guard: forming an LLC isn’t a one-time expense. Most states require annual reports or renewals, which cost $0-$500 depending on your state. California charges a minimum of $800 annually just to keep your LLC active, while many states charge $50-$150.
You’ll also need to file business taxes separately from your personal taxes. If you hire an accountant or use tax software, that’s another $200-$1,000+ annually depending on complexity. Some people use services like how to archive amazon orders type organizational systems to track business expenses, but you’ll need proper accounting setup.
Don’t forget about business insurance either. General liability insurance costs $300-$1,000 annually for most small businesses. This protects your personal assets if something goes wrong—it’s literally the reason you formed an LLC in the first place.
DIY vs. Professional Formation
You can form an LLC yourself for just the state filing fee ($50-$500) by going directly to your Secretary of State’s website. Download the Articles of Organization, fill it out, and submit it. Boom—you’ve got an LLC.
Or you can use an online service like LegalZoom ($99-$300), Rocket Lawyer ($99-$300), or Nolo ($69-$199) that walks you through the process step-by-step. These services file everything for you and often include extras like an Operating Agreement template and registered agent service.
Hiring a local business attorney runs $1,000-$3,000 for complete LLC formation with all the bells and whistles. For most solo entrepreneurs and small business owners, the DIY or online service route is perfectly adequate. Save the attorney for when your business gets more complex or you have multiple members.
Hidden Expenses to Watch
Beyond the obvious costs, there are sneaky expenses that catch people off guard. Some states charge filing fees just to amend your Articles of Organization if you need to change anything ($25-$100). Expedited processing costs extra if you’re in a hurry ($50-$500).
If you’re hiring someone to help you through the process, whether that’s an accountant or business consultant, add $200-$500 to your startup costs. You might also need a business bank account, which some banks require a minimum deposit for.
Don’t overlook the cost of your business address if you don’t have a physical location. A mailbox at UPS Store or virtual office address runs $10-$50 monthly. Over a year, that’s $120-$600 you might not have budgeted for.
Money-Saving Formation Tips
Want to minimize costs? Start by researching your state’s specific requirements thoroughly. Many states have free resources on their Secretary of State websites that walk you through the process. Spend an hour reading instead of paying someone else to explain it.
Form your LLC during your state’s off-peak filing season if possible. Some states offer discounts for filing during certain times of year. Check with your Secretary of State’s office about bulk discounts if you’re forming multiple LLCs.
Use free tools and templates whenever possible. The SBA has free resources, SCORE offers free business mentoring, and many libraries have free access to business formation databases. How to identify duplicates in excel might seem unrelated, but organizing your business documents and tracking expenses is crucial from day one.
Consider forming in your home state first. Multi-state LLCs cost significantly more because you need to register in each state where you do business. Start local, then expand when you’re profitable.
Realistic Total Cost Summary
Here’s what a real-world LLC formation budget looks like in 2024:
Bare Minimum (DIY, Single State): $50-$500 (just state filing fees)
Smart Budget (Online Service): $200-$600 (includes registered agent for one year and filing)
Complete Setup (Attorney + Professional Services): $1,500-$3,500 (includes everything plus legal review)
First Year Total (All Options): Add $500-$2,000 for licenses, permits, business insurance, and tax setup.
Most small business owners spend $300-$1,000 forming their LLC and getting properly set up. That’s a steal compared to the asset protection and tax benefits you gain.
Frequently Asked Questions
Can I form an LLC for free?
Not completely, but close. You can file the Articles of Organization yourself for just the state filing fee ($50-$500). However, you’ll still need to account for business licenses, permits, and an EIN. The absolute bare minimum is usually $50-$100 in most states.
What’s the cheapest state to form an LLC?
Wyoming, Nevada, and Louisiana offer some of the lowest filing fees ($60-$150). However, don’t choose a state just for low fees if you don’t do business there. You’ll end up paying more in compliance costs and registered agent fees than you save on filing.
Do I need a lawyer to form an LLC?
Not necessarily. Most solo entrepreneurs and small business owners can form an LLC using online services or DIY methods. You might want a lawyer if you have multiple members, complex ownership structures, or specific industry regulations.
How long does LLC formation take?
Standard processing takes 1-2 weeks in most states. Expedited processing costs extra ($50-$500) and takes 1-5 business days. The speed depends on your state’s processing times, not the cost.
What’s the difference between an LLC and a corporation?
LLCs are simpler and cheaper to form ($50-$500) than corporations ($100-$800+). Corporations have more formal requirements and higher ongoing compliance costs. For most small businesses, an LLC provides better liability protection without the complexity.
Can I change my LLC name later?
Yes, but it costs money. Most states charge $25-$100 to amend your Articles of Organization. You’ll also need to update your business licenses, permits, and bank accounts. Do it right the first time if possible.
What if my LLC is in a different state than where I operate?
You’ll need to register your LLC in every state where you conduct business. This is called “foreign LLC registration” and costs $100-$500 per state, plus ongoing compliance fees. It gets expensive quickly, so most people form in their home state.
