Forming a Limited Liability Company (LLC) is one of the most popular business structures for small business owners and entrepreneurs. The cost to form an LLC varies by state, ranging from $40 (Kentucky) to $500 (Massachusetts) for the initial state filing fee. Most states charge $50–$200.
Beyond the filing fee, ongoing costs include annual report fees ($20–$500/year depending on state), registered agent fees if using a third-party service ($50–$300/year), and legal fees if using an attorney ($500–$2,000).
This guide breaks down LLC formation costs by component and state in 2026.
Entrepreneurs who have already formed their business entity may also want to review the related LLC formation cost guide, which covers some alternative cost structures.
State LLC Filing Fees
Every state charges a one-time filing fee to register an LLC — the Articles of Organization.
Common state fees: California $70 (plus $800/year franchise tax), Texas $300, Florida $125, New York $200 (plus $25/year), Delaware $90 (popular for multi-state businesses).
Most other states charge $50–$150.
The LLC is a state-law entity — check your specific state's Secretary of State website for current fees.
Business owners in high-cost states should review the cost of living in California and cost of living in Texas guides, as operating costs vary significantly by state and affect the overall economics of LLC formation decisions.
Annual Fees and Ongoing Costs
Most states require annual reports and associated fees: $20–$500/year. California charges an $800/year minimum franchise tax regardless of income. Some states have no ongoing fees.
A registered agent (required for every LLC) can be served by the owner in their state or by a service ($50–$300/year).
EIN (Employer Identification Number) from the IRS is free online.
Entrepreneurs who plan to hire employees should also review the accountant salary guide to understand the cost of professional bookkeeping help as their business grows.
Legal and DIY Formation Options
DIY formation using state websites typically costs only the state filing fee.
Online LLC formation services (LegalZoom, Incfile, Northwest Registered Agent) charge $0–$300 plus state fees.
Hiring a business attorney costs $500–$2,000 but provides professional guidance on operating agreements, liability protection, and state-specific requirements.
For context on what business attorneys charge, see the attorney hourly rates guide.
Operating agreements (internal document governing LLC operations) are free if self-drafted but should be reviewed by an attorney.
Businesses that also plan to protect innovations should review trademark filing cost and cost to patent an idea as part of their IP protection strategy.
Frequently Asked Questions
How much does it cost to form an LLC?
State filing fees range from $40–$500. Most states charge $50–$200. Adding registered agent services and an attorney increases total formation costs to $200–$2,500.
What is the cheapest state to form an LLC?
Kentucky ($40), Colorado ($50), and Iowa ($50) have the lowest LLC filing fees. Delaware and Wyoming are popular for legal protections despite moderate fees.
Is an LLC worth it for a small business?
LLCs provide personal liability protection and tax flexibility. For most small businesses, the benefits outweigh the formation and maintenance costs. Entrepreneurs should also review trademark filing cost and cost to patent an idea to protect IP alongside the business structure.
Do you need a lawyer to form an LLC?
No — you can form an LLC yourself online using your state's Secretary of State website. An attorney adds cost but provides guidance on operating agreements and compliance. The attorney hourly rates guide helps you evaluate whether attorney involvement fits your budget.
Does an LLC pay taxes?
Single-member LLCs are taxed as sole proprietorships by default; multi-member LLCs as partnerships. LLCs can elect S-corp taxation for potential payroll tax savings. Consult a CPA for advice.
Business owners should understand what becoming a CPA entails so they can evaluate whether to hire professional accounting help, and review reducing expenses strategies to maximize profitability in the early stages of their LLC.
Sources & References
- IRS — Limited Liability Company (LLC) tax classification — https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc
- Small Business Administration — choose a business structure — https://www.sba.gov/business-guide/launch-your-business/choose-business-structure
- IRS — apply for an Employer Identification Number (EIN) — https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- Federal Trade Commission — starting a business guide — https://www.ftc.gov/
Last updated: April 27, 2026