LLC formation cost by state

What an LLC actually costs — year one and beyond

LLC costs break into three groups: a one-time state filing fee to form the entity, recurring annual fees to keep it in good standing, and optional but common service fees (registered agent, formation service, operating agreement). States vary dramatically. The most expensive state charges over $800/year just to exist; the cheapest charges $0 after formation.

One-time formation fees

The state filing fee (Articles of Organization / Certificate of Formation) is the basic cost to bring the LLC into existence. Range: $35 (Montana) to $500 (Massachusetts). Most states are between $100 and $200. You pay this once, when you file the articles, and the LLC is legally formed when the state accepts them.

Two states have extra one-time hurdles. Arizona and New York require newspaper publication of the formation notice — in some counties (Manhattan, Brooklyn), publication fees run $500–$2,000. This is the single most surprising cost for new LLC owners in those states.

Recurring annual costs

Every state except a handful (Ohio, Missouri, Mississippi, New Mexico, Idaho, South Carolina, Texas under a revenue threshold) requires an annual report or franchise tax. Examples:

• California — $800/year minimum franchise tax + $20 Statement of Information every 2 years. Due regardless of revenue or profit.
• Delaware — $300 flat annual franchise tax for LLCs (vs. complex par-value calculation for corporations).
• Massachusetts — $500 annual report, one of the most expensive.
• New York — $9 annual filing fee is trivial, but NY imposes an LLC filing fee on earnings: $25–$4,500 per year based on NY-source gross income.
• Tennessee — $300 minimum franchise and excise tax annually.

Registered agent fees

Every LLC needs a registered agent with a physical street address in the state of formation. You can be your own agent if you have a physical address (not a P.O. box) in the state and you're OK with it being on public record. Commercial registered-agent services charge $50–$300/year — most small-business services are around $100–$150. Worth every dollar if you work from home or travel frequently.

Formation services

Services like LegalZoom, ZenBusiness, and Northwest file the paperwork for you and include extras (EIN, operating agreement template, compliance reminders). Range: $0 + state fee (ZenBusiness free tier) to $300+ (LegalZoom premium). For a straightforward single-member LLC, DIY filing is simple and free — most states have fillable online forms that take 20 minutes.

Operating agreement

Single-member LLC template: free to $200. Multi-member LLC with an attorney: $500–$2,000 depending on complexity (vesting, profits-interest, tag-along/drag-along, buy-sell triggers). Most LLCs don't need attorney-drafted agreements, but if there are multiple owners with non-proportional contributions or if the LLC will have investors, pay for professional drafting.

Home-state or foreign state?

Form in the state where the business actually operates. If you form in Delaware or Wyoming for perceived tax advantages but run the business in California, California requires you to register as a foreign LLC and pay its $800/year franchise tax anyway — plus Delaware's $300. You end up paying both. Form at home unless you have a specific reason (VC funding, multi-state operations, privacy for high-net-worth owners).

Hidden cost: annual report deadlines

Missing an annual report deadline triggers late fees ($25–$400) and eventually administrative dissolution of the LLC. Reinstating a dissolved LLC costs $50–$500 plus back fees. Set calendar reminders or use a registered agent service that flags filings.