How Much Does It Cost to Start an LLC in 2024? A State-by-State Breakdown

Forming a Limited Liability Company (LLC) can seem like a costly endeavor, but with the right information, you can reduce expenses while staying compliant with state laws. This guide explores the costs associated with forming an LLC in 2024 and provides actionable advice on how to save money by doing it yourself.

How Much Does It Cost to Start an LLC?

The cost of starting an LLC varies depending on the state in which you form it. Each state sets its own filing fees for the required legal documents. In 2024, the average filing fee across the United States is $132, but fees range from $35 to $500.

Below, we’ll explore both the initial and ongoing costs of forming an LLC.

Ongoing LLC Fees

Once your LLC is formed, most states require you to pay ongoing fees to maintain its active status. These fees are typically due annually or biennially (every two years).

Commonly referred to as Annual or Biennial Reports, these filings serve to confirm or update your LLC's information with the state. Some states also impose franchise taxes or additional fees for LLCs.

Failing to pay these fees on time can result in late penalties or even the dissolution of your LLC, which would strip away its liability protection.

Here’s a summary of what these ongoing fees might be called:

• Certificate of Formation
• Annual Franchise Tax
• Annual Report
• Articles of Organization
• Annual Fee
• Biennial Report
• Certificate of Organization

Turn Your Business Dream Into Reality—Start Your LLC Today for $0!

Don’t let costs hold you back from building your future. With Bizee's Basic Plan, you’ll get everything you need to form your LLC at absolutely $0—you just cover the state fee. Take the first step toward success and make your dream a reality today!

LLC Costs by State (2024 Update)

The table below highlights the filing and ongoing fees for LLCs in each state:

Why You Shouldn’t Choose a State Based Solely on Costs

While some states have lower LLC filing fees, it’s usually not a good idea to form an LLC in a state where you don’t reside or do business. Doing so could lead to unexpected costs, such as needing to file for both a Domestic LLC in the chosen state and a Foreign LLC in your home state.

For example, forming an LLC in Montana might seem appealing due to low filing fees, but if your business operates in another state, you could end up paying duplicate fees and taxes.

How to Save Money When Starting an LLC

Starting an LLC doesn’t have to break the bank. Here are a few practical ways to save money without sacrificing compliance:

1. Do-It-Yourself Filing: Filing the formation documents yourself can save you hundreds of dollars in service fees. Most states provide online systems for LLC formation that guide you through the process.
2. Be Your Own Registered Agent: States require every LLC to designate a Registered Agent, who will receive legal documents on the LLC’s behalf. Acting as your own Registered Agent eliminates the need to pay for a professional service.
3. Use Free Templates for LLC Documents: You can find free templates for essential LLC documents like the Operating Agreement, saving you the expense of hiring an attorney.
4. Avoid Forming an LLC in Another State: Stick to forming your LLC in your home state unless your business has a compelling reason to operate elsewhere.

Simplify and Save with Bizee
While saving money is essential, starting your LLC can still feel overwhelming. That’s where Bizee comes in. With Bizee’s Basic Plan, you can form your LLC for $0—just cover the state fee.

Bizee combines affordability with guidance, ensuring your LLC is formed quickly and correctly without paying for unnecessary extras. If you want to save time and avoid paperwork headaches while staying compliant, this is a smart option to consider.

Is It Possible to Start an LLC for Free?

Technically, no—you’ll always need to pay a filing fee to the state, which varies depending on where you’re forming your LLC. This fee is mandatory, so it’s impossible to start an LLC entirely for free.

That said, you can significantly reduce your costs by managing certain aspects yourself, like filing the paperwork or acting as your own Registered Agent. But if you want to simplify the process without spending extra, Bizee’s Basic Plan is an excellent option—it allows you to form your LLC at $0, with only the state fee to cover.

FAQs About LLC Costs

• Do LLCs Pay Taxes? LLCs themselves do not pay taxes at the state or federal level. Instead, they have “pass-through taxation,” meaning the business income passes through to the owners, who then pay taxes on it via their personal tax returns.

• How Long Does It Take to Form an LLC? The processing time varies by state. Filing online generally results in faster approval, while submitting documents by mail takes longer. Some states also offer expedited processing for an additional fee.

• What are the costs associated with starting an LLC? The primary cost is the state filing fee, which varies by state. Using Bizee's Basic Plan, you can form your LLC for just the state fee, with no additional service costs.

• Do I need a registered agent for my LLC? Yes, all states require LLCs to have a registered agent to receive legal documents. You can act as your own registered agent, but hiring a professional service, like the one offered by Bizee, ensures compliance and privacy.

• Can I change my LLC’s name or structure later? Yes, most states allow LLCs to file amendments to change their name or structure. Bizee offers tools and resources to guide you through this process.

• Is forming an LLC in another state cheaper or better? Not always. While some states like Delaware and Wyoming are known for business-friendly laws, forming an LLC outside your home state can lead to additional costs like foreign registration fees. Bizee can help you determine the best state for your LLC.

• Do I need an EIN for my LLC? Yes, an EIN (Employer Identification Number) is required for opening a business bank account, hiring employees, and filing taxes. Bizee simplifies the process of obtaining an EIN as part of their services.

Conclusion: Making Informed Decisions About LLC Formation Costs

Forming a Limited Liability Company (LLC) is an important step for entrepreneurs and small business owners looking to establish a formal business structure that offers liability protection and operational flexibility. However, understanding the costs associated with starting and maintaining an LLC is crucial for managing your business's finances and ensuring compliance with state regulations.

Key Takeaways on LLC Costs
The costs of forming an LLC vary significantly by state, ranging from as low as $35 to as high as $500 for initial filing fees, with ongoing fees adding to the total expense over time. These expenses often include annual or biennial reports, franchise taxes, or other state-mandated filings. While some states, like Arizona and Missouri, have minimal ongoing requirements, others, such as California, impose high annual fees that can impact your business's budget.

Although it might be tempting to form your LLC in a state with lower fees, it’s important to recognize that your primary residence and where your business operates should determine the state of registration. Attempting to save money by registering in another state could lead to complications, such as the need to register as a foreign LLC in your home state, resulting in doubled filing and ongoing costs.

Why It Pays to Understand Your State’s Requirements
Every state has its own set of rules, fees, and deadlines for LLC formation and maintenance. Being well-informed about your state’s specific requirements can save you time, money, and the stress of non-compliance penalties. Whether you're filing your LLC documents yourself or hiring a formation service, carefully reviewing state laws is the first step to a successful and compliant business venture.

Options for Reducing Costs Without Sacrificing Quality
For cost-conscious entrepreneurs, there are several ways to minimize LLC-related expenses:

1. File the LLC Yourself: While LLC formation services can be convenient, handling the process independently can save you hundreds of dollars. Many states offer clear instructions for filing online or by mail, and resources like step-by-step guides can help ensure accuracy.
2. Act as Your Own Registered Agent: Hiring a Registered Agent service is an added cost, but if you have a physical address in your state of formation, you can act as your own Registered Agent. This allows you to save money while still meeting legal requirements.
3. Leverage Free Resources: Utilize free templates for essential documents like the LLC Operating Agreement and EIN application guides. These tools eliminate the need for costly professional assistance.

The Importance of Ongoing Compliance
One of the most critical aspects of owning an LLC is maintaining compliance with state regulations through timely filings and payments. Neglecting annual reports, franchise taxes, or other mandatory requirements can lead to late fees, loss of good standing, and even the dissolution of your LLC. Staying organized with a compliance calendar or setting reminders for deadlines can help ensure your LLC remains in good standing.

Balancing Cost with Value: Should You Use a Formation Service?
While forming an LLC yourself is the most affordable option, using a professional LLC formation service can save you time and reduce the risk of errors. Services like Bizee provide added benefits, such as personalized support, privacy protection, and document preparation. For business owners with complex needs or limited time, these services can be worth the investment.

Don’t Wait—Form Your LLC Today for $0!"
Every day you wait is a missed opportunity. With Bizee’s Basic Plan, you’ll get everything you need to start your LLC for $0—state fee only! The future of your business starts with this one simple step.

Final Thoughts
Starting an LLC may seem daunting, but breaking the process into manageable steps makes it achievable for any aspiring business owner. By understanding the initial and ongoing costs of LLC formation in your state, you can make informed decisions and create a financial plan that supports your business's growth. Whether you choose to file the LLC yourself or rely on professional services, the key to success lies in preparation, compliance, and leveraging resources to your advantage.

With the right approach, forming an LLC is not just an expense but an investment in your business's future. By taking this step, you’re establishing a foundation of legal protection and credibility, giving your business the tools it needs to thrive in a competitive marketplace.

Disclaimer: The content on this page is for informational purposes only and should not be taken as legal, financial, or tax advice. The author is not a lawyer, tax advisor, or financial professional—just a blogger sharing general information. Laws and regulations vary by location, can change over time, and may not suit your unique situation. The comment section is provided for users to share their thoughts and experiences. Always consult a licensed professional for guidance tailored to your specific needs. The author assumes no responsibility for how this information is used.