How Much Does It Cost to Start an LLC?

According to the latest data, over 21 million Limited Liability Companies (LLCs) operate across the U.S. This popular business structure appeals to entrepreneurs and small business owners for its liability protection, tax flexibility, and straightforward setup.

Forming an LLC typically costs anywhere from $50 to $500, depending on your state and service choices, making it one of the most affordable ways to launch a business. This article breaks down startup and ongoing costs to help you plan your budget from day one.

LLC Costs by State

The cost to start an LLC varies widely across the U.S., with filing fees ranging from as low as $35 to as high as $500. As of 2025, the average filing fee nationwide is approximately $132.

• Out of all 50 states, just 4% (2 states) have LLC filing fees above $300, meaning the vast majority charge less than $300 to form an LLC.
• Massachusetts charges the highest filing fee, $500, along with a $500 biennial report fee, making it one of the most expensive states to maintain an LLC.
• Nevada follows closely with a filing fee of $425 and an annual fee of $350.
• The cheapest state to form an LLC is Montana, with filing fees of $35, significantly lower than those in many other states.

However, forming an LLC in the state only makes financial sense if you actually live or conduct business there.

Otherwise, you face extra costs, including:

• Registering as a domestic LLC with the Secretary of State in the filing state and also as a foreign LLC in your home state
• Paying annual renewal fees in both states
• Possibly hiring two registered agents
• Additional business licenses required at both the state and local levels in both states

These added expenses can quickly outweigh the savings of lower initial fees, making it crucial to choose the LLC state carefully based on where you operate.

Business License and Permit Fees for Starting an LLC

Depending on your industry and location, you may need to pay fees to obtain various business licenses and permits before you can legally operate your LLC. These are common in regulated fields like healthcare, real estate, food service, and professional services.

Common licenses and permits include:

• General business license
• Sales tax license
• Professional license
• Health permit
• Zoning permit
• Sign permit

Costs vary widely based on business type, size, and location. For example, a general business license fee in Tennessee for businesses earning between $3,000 and $100,000 is $15. Many licenses require periodic renewal, so be sure to factor ongoing fees into your budget.

LLC Operating Agreement Costs

Drafting or reviewing an LLC operating agreement generally involves legal fees due to the expertise required.

While you can prepare the documentation yourself using available templates, it is generally preferred to have it professionally drafted or reviewed to ensure it meets all legal requirements and protects all members.

According to recent data:

• The average cost to draft an LLC operating agreement is $760 (flat fee).
• On average, it costs a $490 flat fee to review an existing LLC operating agreement.
• Hourly rate for business lawyers is $250 to $350 per hour.

Only five states require LLCs to have an operating agreement by law:

• California
• Delaware
• Maine
• Missouri
• New York

Even in states without this requirement, having an operating agreement is recommended to clearly define management and ownership roles, preventing future disputes and ensuring smoother business operations.

Publishing Fees for Starting an LLC

In some states, an LLC business formation involves extra steps beyond filing your Articles of Organization; one common requirement is publishing a notice of your LLC’s formation in local newspapers.

• New York requires LLCs to publish notices in two newspapers, with costs varying based on location and newspaper rates. There’s a $50 fee to file a Certificate of Publication with the state.
• Nebraska requires a publication notice filing fee of $25.
• Arizona also has a publication requirement, but does not charge a fee for filing the affidavit.

These publishing fees can add unexpected costs to your LLC setup, so be sure to check your state’s specific rules.

Optional/Additional Costs When Starting an LLC

Aside from the main state filing fees and necessary licenses or permits, most other expenses are optional and vary based on your individual requirements or choices.

Below are some additional fees to keep in mind:

Name Reservation Fees

To make sure your chosen LLC name is exclusively yours before filing official paperwork, you can reserve it with the state. This is useful if you want to secure the name early. Fees for name reservation generally range from $15 to $75, depending on the state.

Doing Business As (DBA) or Fictitious Business Name

If you want your LLC to operate under a different name than its official registered name (for example, using “Jones Hair” instead of “Jones Hair, LLC”), you’ll need to register a DBA or fictitious business name. The cost for filing a DBA usually falls between $10 and $150, varying by state and sometimes by county.

Expedited Filing Fees

For entrepreneurs eager to start quickly, many states offer faster processing of LLC formation documents for an extra charge. Expedited fees can range from $25 to as much as $500. For example, Delaware offers 2-business hour processing for $500, while Georgia provides same-day service for $275.

Registered Agent Services

Every LLC must have a registered agent to receive legal documents and official notices. While you can act as your own registered agent, many opt to hire a professional service for privacy and convenience. Registered agent fees generally cost between $100 and $300 per year.

Annual Report Fee

Most states require LLCs to file an annual or biennial report to keep their business information current. These reports come with fees generally ranging from $15 to $300. Some states also impose a franchise tax, which can be a flat fee or based on earnings or number of members. For instance, California charges a $20 annual report fee plus an $800 franchise tax.

How to Start an LLC?

Starting a new business entity using reliable LLC formation services involves several clear, manageable steps that establish your company’s legal and financial foundation. Here’s a quick guide:

• Pick a unique and distinguishable name: Choose a business name that’s memorable, legally compliant, and available for your state LLC.
• Appoint a registered agent: You can act as your own agent, but hiring a professional service protects your privacy and reduces administrative tasks.
• Create an operating agreement: This document outlines your LLC’s structure and daily operations, serving as a key guide for your business.
• File articles of organization (certificate of formation): Submit the required paperwork and pay filing fees to officially register your LLC with the state.
• Secure business licenses and permits: Obtain necessary licenses to legally operate, guided by your local authorities or services, including the internal state revenue office for tax registration.
• Get an employer identification number (EIN) from the IRS: This federal tax ID simplifies managing income tax, hiring employees, and opening a business bank account.
• Open a business bank account: Keep your business finances separate from personal funds by opening a dedicated account for your LLC.

Bottom Line

Starting an LLC involves various costs that extend beyond just the state filing fees. While initial fees may seem affordable, additional expenses like operating agreements, registered agent services, business licenses, and state-specific requirements can add up quickly. Careful planning and understanding your state’s rules are important to avoid unexpected costs and ensure compliance.

Choosing the right state for your LLC is important because it’s where you conduct business and plan to operate long-term. Balancing upfront costs with ongoing fees, legal protections, and administrative needs will set a solid foundation for your business success.

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