How Much Does It Cost To Form an LLC?

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.

LLC formation costs

State filing fees

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.

Registered agent 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.

Operating agreement

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.

EIN from the IRS

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.

Business licenses and permits

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.

Ongoing LLC costs

Annual report or renewal fees

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.

Franchise or privilege taxes

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.

State income taxes

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.

Accounting and legal fees

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.

Total estimated cost to form an LLC

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.

Get help managing your LLC’s legal needs with LegalShield

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.