How Much Does it Cost to Form an LLC?

An LLC stands for Limited Liability Company, one of the best and easiest ways to start a new business in the United States. It has a lot of advantages. LLC allows high-level protection of your business assets, minimizes taxes, manageable, inexpensive, and, best of all, easy to form.

The basic cost of forming an LLC is the state filing fee, which ranges from 40 to 500 dollars, and varies by state. Some other costs include Name Reservation Fee, Publication Fee, Operating Agreement Cost, and Ongoing Maintenance Costs.

Cost to Form an LLC

State LLC Formation Fees

To form an LLC, you need to file the formation documents with your Secretary of State to form an LLC. This formation document is known as Articles of Organization. The cost to file an Articles of Organization is varied from state to state. The cost can range between 40 and 500 dollars depending on your state to form an LLC.

Business Name Reservation Fee

The business name reservation fee is optional in almost all states, but if you are willing to form an LLC in Alabama, you need to pay the name reservation fee between 10 to 50 dollars.

Publication Fees

If you are willing to form an LLC in states like New York, Pennsylvania, Nevada, Georgia, Nebraska, and Arizona, you must publish a Formation Statement in a local newspaper.

Publication Fees vary depending on the state and newspaper. Publication fees range from 50 to 2000 dollars.

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.

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.

Ongoing Maintenance Costs

Ongoing Maintenance Costs are expenses you require to pay, such as Annual Report Fees, Franchise Tax, Registered Agent Fees, Business License Renewal Fees, etc.

Annual Report Fees

You have to fill your LLC every one or two years with your Secretary of State to keep your LLC information (Address of your LLC, Name, and Addresses of LLC members and registered agent) in good standing. Annual Report Fee varies state by state.

Franchise Tax

Franchise Tax refers to a tax paid annually by LLCs that want to do business in some states. Franchise Tax is levied in a few states. It is a flat tax but can also be based on the annual earnings of your LLC.

Registered Agent Fees

registered agent is a person or company who sends and receives legal papers on behalf of your LLC. These legal papers include official correspondence like legal summons and filing documents. Registered agent service fees usually range from 100 to 150 dollars.

Business License Fees

In some states, you need to obtain a business license to form an LLC. There are many types of business licenses such as Seller’s permit, Commercial sign permits, certificate of occupancy, etc. The cost for getting a business license can range from 50 to 100 dollars, and you also have to renew your business license every year.

Conclusion

Forming an LLC yourself is the easiest and cheapest option, but completing all the forms and keeping the LLC up to date becomes complicated, so it is better to hire a professional service.

There are many professional services on the internet. I recommend our Micahguru Formation because we provide the best service and our thousand reviews are proof of that.