LLC Formation Cost Guide 2026: State Fees & Total Startup Costs
Filing fees range from $40 (Kentucky) to $500 (Massachusetts). Add registered agent and annual report fees and most LLCs cost $100–$500 in the first year — except California ($940+) and New York ($759+).
Calculate your total LLC formation cost
Includes filing fee, registered agent, and annual compliance costs for your state.
Full LLC Cost Breakdown: What You'll Actually Pay
State Filing Fee (Articles of Organization)
RequiredOne-time fee paid to your state Secretary of State. Non-refundable. Kentucky is cheapest; Massachusetts most expensive.
Registered Agent
RequiredRequired in all states. You can serve as your own RA if you have a physical address in the state during business hours. Services like Northwest cost $125/yr.
Operating Agreement
Not required in most states but strongly recommended. DIY is free (use a template). A business attorney charges $300–$800 for custom drafting.
EIN (Employer Identification Number)
RequiredGet your EIN directly from IRS.gov — it's free and takes 10 minutes online. Never pay a third party for this.
Annual Report / Biennial Filing
RequiredMost states require annual or biennial reporting. California's $800 minimum franchise tax is the most expensive in the US.
Business Bank Account
Required to maintain liability protection. Many online banks (Relay, Mercury, Bluevine) offer free business checking.
Business License
City/county-level license may be required depending on your business type and location. Check your local municipality.
Formation Services: DIY vs. Professional (2026)
You can form an LLC yourself for just the state filing fee. Here's how the major options compare.
| Service | Service Fee | First-Year Total |
|---|---|---|
| DIY (yourself) | $0 | Filing fee only |
| Northwest Registered Agent | $39 + state fee | $139–$539 |
| ZenBusiness | $49 + state fee | $149–$549 |
| LegalZoom | $0 + state fee (basic) | $50–$500+ |
| Bizee (formerly Incfile) | $0 + state fee | $50–$500 |
| Business Attorney | $500–$1,500 flat | $600–$2,000+ |
LLC Filing Fees by State (2026)
First-year total includes state filing fee + registered agent ($50) + estimated annual report fee.
| State | Filing Fee | Annual Report | Registered Agent | First-Year Est. |
|---|---|---|---|---|
| Kentucky | $40 | $15 | N/A | $55 |
| Mississippi | $50 | None | $50 | $100 |
| New Mexico | $50 | None | $50 | $100 |
| Colorado | $50 | $10 | $50 | $110 |
| Ohio | $99 | None | $50 | $149 |
| Georgia | $100 | $50 | $50 | $200 |
| Minnesota | $155 | None | $50 | $205 |
| Wyoming | $100 | $60 | $60 | $220 |
| Arkansas | $45 | $150 | $50 | $245 |
| Oregon | $100 | $100 | $50 | $250 |
| Illinois | $150 | $75 | $50 | $275 |
| Washington | $200 | $60 | $50 | $310 |
| Florida | $125 | $138 | $50 | $313 |
| Texas | $300 | None | $50 | $350 |
| North Carolina | $125 | $200 | $50 | $375 |
| Delaware | $90 | $300 | $50 | $440 |
| New York | $200 | $9 | $50 | $759 |
| California | $70 | $820 | $50 | $940 |
| Nevada | $425 | $350 | $200 | $975 |
| Massachusetts | $500 | $500 | $50 | $1050 |
All fees verified from state Secretary of State websites. May not reflect most recent legislative changes. Verify at your state's official SOS website before filing.
Watch Out: California and New York Have Hidden Costs
⚠ California LLC Costs
- Filing fee: $70 (cheap!)
- But: $800 minimum franchise tax every year — even if your LLC earns $0
- Statement of Information: $20 every 2 years
- LLC fee: Additional 0%–$11,790/yr based on revenue over $250,000
- First-year minimum: ~$940
⚠ New York LLC Publication Requirement
- Filing fee: $200
- But: You must publish your LLC formation in 2 newspapers for 6 weeks
- Publication cost: $500–$2,000+ (more in NYC)
- Certificate of Publication fee: $50
- First-year total: $750–$2,300+
How LLCs Are Taxed (And Why It Matters)
LLCs are flexible — you can choose how you're taxed. The right choice can save thousands per year.
Single-Member LLC (default)
Multi-Member LLC (default)
S-Corp Election
C-Corp Election
Tax treatment is complex. Consult a CPA or tax attorney before making tax elections. The S-Corp election typically makes sense when annual LLC profit exceeds $40,000.
LLC vs. S-Corp vs. C-Corp vs. Sole Prop: Which Structure Is Right?
Business structure is one of the highest-stakes decisions entrepreneurs make — it affects taxes, liability, fundraising ability, and ongoing compliance costs for the life of your company.
| Structure | Formation Cost | Liability Protection | Self-Employment Tax |
|---|---|---|---|
| Sole Proprietorship | $0 (+ DBA if needed) | None | 15.3% on all profits |
| LLC (default taxation) | $50–$500 | Strong | 15.3% on all profits |
| LLC + S-Corp Election | $50–$500 + $1,500–$3,000/yr accounting | Strong | On salary only (saves $5K–$20K/yr) |
| C-Corporation | $100–$800 + ongoing compliance | Strongest | None (but double taxation risk) |
The S-Corp Math: When Does It Make Sense?
If your LLC earns $100,000 in profit: as a default LLC, you pay 15.3% SE tax on the full $100K = $15,300. As an S-Corp with a $60K "reasonable salary" + $40K distribution: SE tax only on $60K = $9,180 — saving ~$6,120. The extra accounting cost is typically $1,500–$3,000/yr, so the S-Corp election breaks even around $40,000–$60,000 in annual profit.
6 Common LLC Mistakes That Cost Business Owners Money
Mingling personal and business finances ("piercing the veil")
Paying personal expenses from the LLC account — or LLC expenses from personal accounts — is the #1 way courts rule that your LLC protections don't apply. Open a dedicated business checking account immediately and never commingle funds.
Missing annual reports and state fees (leading to administrative dissolution)
Every state requires annual or biennial filings. Missing them causes your LLC to fall into "not in good standing" status — making it impossible to open bank accounts, sign contracts, or defend lawsuits. Costs $50–$400 in reinstatement fees.
No operating agreement (especially dangerous for multi-member LLCs)
Without an operating agreement, your state's default LLC laws govern everything — including ownership splits, decision-making authority, and what happens if a member wants out. A $300 operating agreement prevents $50,000+ in litigation.
Forgetting FinCEN Beneficial Ownership Information (BOI) reporting
Since 2024, most LLCs must file a Beneficial Ownership Information report with FinCEN within 90 days of formation (or by Jan 1, 2025 for existing LLCs). Failure to file: $500/day penalty + potential criminal liability. File free at boiefiling.fincen.gov.
Operating in another state without registering as a foreign LLC
If your Wyoming LLC signs leases, employs people, or regularly does business in California, you must register as a foreign LLC in California too — or face penalties, back taxes, and inability to enforce contracts in that state. Foreign LLC registration costs $100–$750 per state.
Waiting too long to elect S-Corp status (missing the deadline)
The S-Corp election (IRS Form 2553) must be filed by March 15 for the election to apply to the current tax year. Miss it, and you lose an entire year of tax savings. Set a calendar reminder for your first profitable year — the election can save thousands annually.
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