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How Much Does Starting And Running An LLC Cost In Different States?

How Much Does Starting And Running An LLC Cost In Different States?

Starting an LLC in most states can cost anywhere from $50-500, depending on your operating condition. 

However, running an LLC can also cost money and includes fees ranging from filing expenses to annual reports and other vital documents related to state taxes.

With such a wide range of costs, it's essential to know of the specific requirements in your state and any expenses you may need to consider when investigating how to start an LLC.

In this article, I'll share the numbers to consider based on your operating state. I’ll also give you a breakdown of the typical LLC costs in various places around the U.S.

How Much Does It Cost To Start An LLC?

The average cost to start an LLC in 2022 is $132. This figure is based on the filing fee required in each state.

LLC Cost By State

Part of knowing what is an LLC and what's involved in starting one is looking at the cost per state.

Below are the current state fees to consider. I also included the recurring annual (or biennial) state filing fees, which vary across states.

State LLC

Filing Fee

Recurring Fee

Alabama LLC

$200

$100

Alaska LLC

$250

$100 biennial

Arizona LLC

$50

$0

Arkansas LLC

$45

$150

California LLC

$0

$800 + $20 biennial

Colorado LLC

$50

$10

Connecticut LLC

$120

$80

Delaware LLC

$90

$300

Florida LLC

$125

$138.75

Georgia LLC

$100

$50

Hawaii LLC

$50

$15

Idaho LLC

$100

$0

Illinois LLC

$150

$75

Indiana LLC

$95

$31 biennial

Iowa LLC

$50

$45 biennial

Kansas LLC

$160

$50

Kentucky LLC

$40

$15

Louisiana LLC

$100

$35

Maine LLC

$175

$85

Maryland LLC

$100

$300

Massachusetts LLC

$500

$500

Michigan LLC

$50

$25

Minnesota LLC

$155

$0

Mississippi LLC

$50

$0

Missouri LLC

$50

$0

Montana LLC

$35

$20

Nebraska LLC

$105

$13 biennial

Nevada LLC

$425

$350

New Hampshire

$100

$100

LLC NewJersey LLC

$125

$75

Jersey LLC

$50

$0

New Mexico LLC

$200

$9 biennial

New York LLC

$125

$200

North Carolina LLC

$135

$50

North Dakota LLC

$99

$0

Ohio LLC

$100

$25

Oklahoma LLC

$100

$100

Oregon LLC

$125

$70 every decade

Pennsylvania LLC

$150

$50

Rhode Island LLC

$110

$0

South Carolina LLC

$150

$50

South Dakota LLC

$300

$300

Tennessee LLC

$300

$0

Texas LLC

$54

$18

Utah LLC

$125

$35

Vermont LLC

$100

$50

Virginia LLC

$200

$60

Washington LLC

$99

$300 biennial

Washington DC LLC

$100

$25

West Virginia

$130

$25

LLC Wisconsin LLC

$100

$60

Tips For Choosing The Right State To Form Your LLC

Setting up your LLC in the state that makes the most sense for your business is essential. There are a few factors to consider when selecting the correct state:

  • Business Climate: Each state has tax laws, regulations, and other considerations that can affect the cost of running an LLC in your chosen jurisdiction. Research each state's rules and determine which suits your company's needs best.
  • Cost: The cost of setting up an LLC involves filing fees. These vary from state to state, so make sure you factor this into your decision-making process.
  • Location: You may want to form your LLC in a specific area that is geographically convenient or ideal for doing business due to surrounding resources such as suppliers, partners, etc.
  • Other Factors: Depending on your type of business, you may be subject to additional regulations in your chosen state. Make sure to research any specific industry-related requirements before filing.

Other Annual LLC Fees

While the costs above cover the most common LLC fees, there are a few other costs to consider before running an LLC. These include:

  • State Taxes: Depending on the state in which your LLC is registered, you may need to pay an annual fee or tax. This can vary from state to state and should be researched before forming the LLC.
  • Federal Taxes: An LLC is a separate business entity for federal tax purposes, so it is required to file LLC taxes with the IRS annually. The federal tax filings and payment schedule may vary depending on the number of owners your LLC has.
  • Licensing Fees: Depending on the type of business you own or its location, you may need to obtain specific licenses or permits. These include business permits, sales tax licenses, health department permits, etc.
  • Insurance Costs: Insurance is essential to any business, as it protects you from financial loss due to unexpected events such as property damage or employee injury. The insurance cost can vary depending on the coverage needed for your specific type of business and should be researched before forming an LLC.
  • Advertising & Marketing Costs: Advertising and marketing are essential to running a successful business. These expenses can add up quickly - whether it's print advertisements, digital ads, or even direct mail campaigns, knowing what your budget amounts to is key.
  • Payroll & Employee Benefits: If you plan to hire employees for your LLC, there are several costs associated with payroll and employee benefits that must be considered. These include salaries, wages, taxes, insurance premiums, bonuses, etc.
  • Professional Services (Accounting, Legal): Professional services such as legal advice or assistance preparing tax returns can become costly if not planned accordingly.
  • Miscellaneous Business Expenses: There are always miscellaneous expenses associated with running any business that should be factored into the budget. These may include supplies, rent/mortgage payments, utilities, etc.

Saving Money On The Costs Of Starting And Running An LLC

While expenses can add up, there are also ways to save money the on LLC start up cost per year as well as the cost of registering an LLC.

  • Compare pricing between different service providers when seeking legal or accounting assistance. Service providers often have a wide range of rates, so shopping around for the best deal is essential.
  • Consider forming an LLC online instead of through a traditional paper process. This can often save time and money on filing and registration fees.
  • Ask other business owners about their experiences with running an LLC and any tips they may have on reducing costs.
  • Consider forming a multi-member LLC to share the costs associated with running the business.
  • Take advantage of any tax deductions or credits available for small businesses and entrepreneurs.
  • Stay current on changes in local, state, or federal laws and regulations that could affect your LLC's operation and expenses.
  • When possible, try to pay vendors/suppliers upfront instead of taking out loans or financing options which can add additional fees and interest payments over time.
  • Use free marketing tools such as social media platforms, word-of-mouth referrals, content marketing, etc., to help reduce advertising costs.

Considering The Registered Agent

Do I need a registered agent for my LLC?

This is one of the key questions to answer, as one of the most significant costs associated with starting and running an LLC is the cost of a registered agent. A registered agent is responsible for receiving important documents such as tax forms and legal notices from the state. 

The cost of a registered agent varies depending on what services they offer and which company you use. Depending on your business needs, you may pay less or more for your registered agent service. Some companies even offer free services for basic needs, while others offer more comprehensive packages for a fee. 

Here are the key questions to ask when choosing your registered agent service:

  • What services do they offer?
  • How much does the service cost?
  • Are there any extra fees or additional costs?
  • How reliable is their customer support?
  • Do they have a proven track record of success?

How Much Does Starting And Running An LLC Cost In Different States - FAQ

Can You Set Up A Free LLC?

No, you cannot set up a free LLC. While some services may offer to do it for a low cost, many will still require the payment of specific state and federal filing fees to form an LLC properly.

Additionally, these services may not provide specific advice or guidance on structuring your LLC or protecting yourself from potential liabilities. For this reason, it is best to consult an experienced lawyer who can help you create an LLC that meets all legal requirements and protects your interests.

What Documents Are Needed To Set Up An LLC?

Setting up an LLC requires preparing and filing several vital documents with your state's secretary of state office or other regulatory agency in charge of business entities.

These documents include the following:

  • The Articles of Organization, which set out the LLC's name, purpose, members, and management structure
  • The Operating Agreement, which outlines the company's membership rights and duties
  • Depending on your state's laws, you may also need to file an Employer Identification Number (EIN) with the IRS to separate your business from yourself legally
  • Any applicable state-specific forms or other documents

Does Closing An LLC Vary Based On The State?

Closing an LLC  does vary based on state. Each state has different requirements for completing an LLC, such as filing a Certificate of Dissolution with the Secretary of State's office or other business regulatory agency and providing notice to creditors, customers, and clients. 

Additionally, you may need to cancel any permits or any LLC license associated with your business before you can officially close the LLC.

What Is A Disregarded Entity LLC ?

A disregarded entity LLC  is a business entity type that individuals and businesses use to reduce their tax liability. When an LLC is treated as a disregarded entity, it does not exist for federal income tax purposes. All taxes and penalties are passed through to the individual or business that owns the LLC.

Does Opening A Single-Member LLC Vary From A Multi-Member One?

A single member LLC  is treated differently from a multi-member LLC in terms of liability and taxation. Generally, a single-member LLC is not subject to the same double taxation that occurs with a multi-member LLC.

How Does Paying Yourself From An LLC Work?

Paying yourself from an LLC involves taking distributions from the company's profits. Depending on your state's laws, you may need to document these distributions by issuing a check or making an electronic transfer. Additionally, you must ensure that all applicable taxes are withheld and paid.

Conclusion

Starting and running an LLC can be costly, and the associated fees vary from state to state. It's essential to know your state's specific requirements and costs before starting your business and consider any other expenses you may need to cover to keep your LLC running smoothly.

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About the author 

Mike Vestil

Mike Vestil is an author, investor, and speaker known for building a business from zero to $1.5 million in 12 months while traveling the world.

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