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The Limited Liability Company is a popular entity choice for many small businesses because of the ease of operation, tax flexibility and liability protection they provide. The cost to form an LLC varies by state and may include the state formation fee, name reservation fee and publication fee in addition to ongoing annual fees.
State Formation Fees
To form an LLC, the Articles of Organization (called a Certificate of Organization, Articles of Formation, etc. in some states) will be filed with the state (typically the Secretary of State). This cost to file the Articles of Organization ranges between $40 and $500.
Before filing, you will need to make sure the LLC name is available to register as each entity has to have a unique name.
Name Reservation Fee
The ability to reserve a name is available in every state (for a fee). Alabama is the only one that requires the name to be reserved at a cost between $10-$28. Reserving a name is optional in all other states, but is usually not worth the expense, unless it will be awhile before starting the LLC.
There are some states like Arizona, Georgia, Nebraska, Nevada, New York, and Pennsylvania that require new LLCs to publish a legal ad notifying the public of the LLC formation in a local newspaper. Publishing costs vary depending on the state and newspaper.
After the LLC is formed, most states also have a fee for filing the Annual Report or Statement of Information. Most states charge an annual or biennial fee, though there are some states with no fee. Filing the annual report and paying any fees is important in order to keep the LLC in Good Standing and keeping the liability protection intact.
A few states also have what’s known as a Franchise Tax, which is an annual tax on the privilege for doing business in that state.
Forming an LLC in Another State
As you look over the list of costs to form an LLC in each state below, a common question is why don’t I form in the cheapest state or form in one of the “popular” states like Delaware, Nevada or Wyoming. While there may be advantages, more than likely it’s going to cost more in taxes, fees and time to administer than the benefits those other states provide.
We have more details in our article on the best states to form an LLC, but just know that these are often false savings. The short answer is you are almost always better to form an LLC in the same state as you live. Otherwise not only do you end up paying the formation fee from the other state, but you will have to register as a foreign entity on top of the additional accounting costs when dealing with multiple states.
State Costs to Form an LLC
|State||Filing Fee||Recurring Fees|
|Alabama||$150 minimum (varies by county)|
LLC Registration, Probate Judge, and name filing.
|$100 Annual Privilege Tax – minimum|
|Alaska||$250||$200 (every 2 years)|
|Arizona||$50 (plus publishing costs)||$0 (report due annually)|
|California||$70||$800 – Franchise Tax (annually)|
$20 – Statement of Information (annually)
|Delaware||$90||$300 Franchise Tax (annually)|
|Idaho||$100||$0 (report due annually)|
|Indiana||$85||$20 (biennial report)|
|Iowa||$50||$60 (biennial report)|
|Minnesota||$135||$0 (report due annually)|
|Mississippi||$50||$0 (report due annually)|
|New Hampshire||$100||$100 (annually)|
|New Jersey||$125||$50 (annually)|
|New York||$200 (plus publishing costs)||$9 (biennially)|
|North Carolina||$125||$200 (annually)|
|North Dakota||$135||$50 (annually)|
|Rhode Island||$150||$50 (annually)|
|South Dakota||$150||$50 (annually)|
|Tennessee||$300 (minimum)||$300 (minimum)|
|Texas||$300||$0 report |
|West Virginia||$100||$25 (annually)|