If you have a business or are thinking of starting one, you should consider registering your business in the United States. The United States has an excellent business climate.
In the United States, a Limited liability company (LLC) is the best business structure for small businesses over other business structures.
If you are considering creating a Limited Liability Company (LLC) to conduct business in the United States, you may be interested in the 10 states with the lowest LLC filing fees. In this guide, I have provided all the information about the 10 cheapest states to form an LLC.
10 Cheapest States to Form an LLC
- 1 What is a Limited liability company?
- 2 10 Cheapest States to Form an LLC
- 3 Arizona
- 4 Colorado
- 5 Hawaii
- 6 Kentucky
- 7 Michigan
- 8 Mississippi
- 9 Missouri
- 10 Montana
- 11 New Mexico
- 12 Utah
- 13 LLC Formation Checklist
- 14 Willing to Form an LLC in the United States
- 15 CONGRATULATIONS🎉
What is a Limited liability company?
A Limited liability company (LLC) is a relatively new business model and is quickly becoming the most popular form of business ownership in the United States.
It is a hybrid of a corporation and a partnership and offers certain benefits of both, like limited liability and tax treatment.
10 Cheapest States to Form an LLC
Here is a list of the 10 cheapest states to form an LLC, including the cost of state filing and renewal fees.
- New Mexico
WalletHub ranked Arizona as the ninth-best state for starting a business. Arizona has a $50 state filing fee with no renewal fee.
Colorado is a great place to start a business. A study by WalletHub rated Colorado 6th overall for its business-friendly environment and 10th overall. Colorado has a $50 state filing fee with a 10 renewal fee.
Hawaii is one of the cheapest states to form an LLC, with a $50 fee to file your articles of organization and a $15 annual renewal charge.
Kentucky small business owners now have more opportunities to start, grow and succeed thanks to the state’s new financial incentive programs. Kentucky offers a $40 state filing fee with an annual renewal fee of $15.
If you are starting a business and want to start small, then Michigan is the place for you. It’s very inexpensive to start a business there with a $50 state filing and $25 renewal fee.
Mississippi encourages new businesses with a low corporate tax rate and the best business conditions that are stable for the long term. Mississippi offers a $50 state filing fee with no annual renewal fee.
Missouri is known as one of the most business-friendly states in the country. It offers a business-friendly climate for new businesses and is also inexpensive is aided by a $50 state filing fee and no annual renewal fee.
Montana ranks first in the nation for the best conditions for starting a new small business. Montana has a $70 fee to file your articles of organization and a $20 annual renewal charge.
A recent WalletHub study found that New Mexico is one of the cheapest states to form an LLC and ranked 18th best state to start a business in the United States. New Mexico offers a $50 state filing fee with no annual renewal fee.
Forbes Magazine has named Utah the Best State for Business eight years in a row because of its business-friendly environment and its opportunities for continued growth. The state of Utah has a $70 state filing fee with a $20 annual renewal fee.
LLC Formation Checklist
Pick a Name for your LLC
The first step to forming an LLC is to select a name for your LLC. Generally, you will need to follow this naming instruction:
- You must include the word limited liability company or LLC in your company name.
- You have to avoid restricted words such as a bank, trust, Law, Attorney, etc.
- You should not include such words in your company name that confuse your LLC with a government agency.
- I also recommend registering your LLC name’s web domain even if you do not want to create your business website today.
Hire a Registered Agent for your LLC
The next step to form an LLC is to appoint a registered agent. A registered agent is also known as a statutory agent or resident agent.
A registered agent is a person or a company who sends and receives legal papers on behalf of your LLC. These legal papers include official correspondence like legal summons and filing documents.
Your registered agent must be a resident of a state where you want to start your LLC. If your registered agent is an individual, then he will be a member of your LLC along with you.
File your Certificate of Formation
The next step you have to do is to file the formation documents with your Secretary of State. These documents are known by various names, most commonly this document known as Certificate of Formation. It describes the organizational structure of your business.
Draft your Operating Agreement
An LLC operating agreement is a legally binding business document that entails the ownership of its members, how the company is managed, and the structure of the LLC or limited liability company.
It can provide details such as one meeting being held naming a registered agent, selecting managers, and adding and dropping members.
An operating agreement is not required in every state, but it is highly recommended to have an operating agreement to avoid internal disagreements between LLC members.
Apply for your Business Tax ID
The last step is to apply for your business tax ID which is also known as Employer Identification Number and Federal Tax Identification Number.
What are the Purposes of EIN?
- An EIN is necessary for your business tax purposes.
- It is also required to open a business bank account in the United States.
- It is also needed when you want to hire employees legally.
Applying for an EIN is quite simple and free of cost. You can quickly obtain this by visiting the IRS.gov website.
Willing to Form an LLC in the United States
In this guide, I showed you the 10 cheapest states to form an LLC. If you are interested in registering your business in each of the above states, and you don’t have much time or simply you don’t feel like dealing with the bureaucratic process yourself and you are looking for a professional business formation service so you are at the right place.
Micahguru Formation is ready to help you start your own business. We’ve helped more than 150 companies get registered last year.
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