Editor's note: This post was originally published April 15, 2021, and has been updated for accuracy, comprehensiveness, and freshness on March 19, 2026.
Forming an LLC is an important step for many entrepreneurs and small business owners. But how much does it actually cost? The answer varies by state and business structure, but understanding the key expenses involved will help you plan and budget effectively.
This guide breaks down the costs you’ll typically encounter when forming and maintaining an LLC.
The most significant upfront cost is the state filing fee to submit your Articles of Organization (or equivalent formation document). These fees vary widely by state. Some states charge as little as $40–50, while others—like Massachusetts and Illinois—charge several hundred dollars.
See a breakdown of LLC filing fees by state to find the specific cost for your state.
Filing fees are just one factor, though — see our breakdown of the best states to form a small business, which weighs legal environment, tax treatment, and ongoing compliance costs alongside initial fees.
Most states require LLCs to designate a registered agent—someone with a physical address in the state to receive legal documents. If you use a professional registered agent service (rather than acting as your own), expect to pay anywhere from $50 to $300 per year.
While not all states require an operating agreement, having one is strongly recommended. If you use an attorney to draft it, this can add several hundred to several thousand dollars to your upfront costs. LegalShield members may be able to get document review and guidance on their operating agreement as part of their plan.
Applying for an Employer Identification Number (EIN) from the IRS is free and can be done online. This is required if you have employees, multiple members, or need to open a business bank account.
Depending on your industry and location, you may need local, state, or federal licenses or permits. Costs vary significantly based on your business type and location.
Most states require LLCs to file annual reports and pay a renewal fee to stay in good standing. These fees typically range from $25 to $500 per year depending on the state.
Some states impose a franchise or privilege tax on LLCs. California, for example, charges a minimum annual franchise tax of $800 for most LLCs. Delaware has its own franchise tax structure as well.
Depending on how your LLC is taxed and which state you operate in, you may owe state income taxes on LLC profits. States without income tax (like Texas, Nevada, and Florida) can offer savings here.
Working with an accountant or attorney adds ongoing costs, but these professionals can help you stay compliant, minimize taxes, and avoid costly mistakes. A LegalShield Business Plan can reduce your ongoing legal costs by giving you access to a provider law firm for consultations, document review, and more at a predictable monthly rate.
For a simple LLC with no unusual complexity, total first-year costs typically range from a few hundred to a few thousand dollars, depending primarily on your state’s fees and whether you use professional services. Ongoing annual costs generally run from a few hundred dollars to over $1,000, again depending on your state.
Starting and running an LLC involves ongoing legal considerations beyond just formation. With a LegalShield Small Business Plan, you get access to a provider law firm that can help you with operating agreements, contract review, compliance questions, and more—for a predictable monthly cost.
Explore LegalShield Business Plans to find the coverage that’s right for your business.
Most states require annual or biennial report fees to keep your LLC in good standing. Some states don’t have filing requirements, and some don’t have fees. When fees are required, they can range from a few dollars to $800 or more. Missing your state's deadline can trigger late fees, loss of good standing status, and even administrative dissolution of your LLC.
No state offers LLC formation for free. Every state requires at least a filing fee to process your Articles of Organization. You can considerably reduce your total cost by filing yourself and serving as your own registered agent.
In most cases, yes. Talk to a tax professional for guidance on your specific situation.
Content Specialist at LegalShield, creating educational resources about legal and consumer protection topics. She focuses on making complex legal and financial concepts accessible to readers and has contributed to various educational articles on consumer rights and protections.
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