The Cost of Forming an LLC in 2022 (All 50 States)

If you’re forming a limited liability company (LLC), you’re entering into a process that can help you grow and expand your business, while also providing protection for your personal assets.

Before you get too far into the process, it’s important to set reasonable expectations for how much forming your LLC will cost.

While most entrepreneurs know there’s a filing fee for the state’s LLC formation documents, there are often some surprises when it comes to the other expenses involved.

Using the guides linked below, you can find all of the state-specific costs involved with forming your LLC. We will also provide some general information about the costs in all 50 states on this page to get you started.

The Costs of Forming an LLC in Any State

No matter which state you choose to form your LLC in, there are some common expenses you’ll need to keep in mind. While these costs do vary from state to state, taking a look at this general list can still help you align your expectations appropriately.

Required Costs

• Filing Your LLC Formation Documents: Usually referred to as the Articles of Organization or a similar name, these documents officially form your LLC with the state. Filing fees for these documents can vary widely between states. This filing costs as little as $50 in some states but can get as high as $500+ in others.

Optional/Variable Costs

• Name Reservation: In Alabama, this cost is actually required, but it’s the only state that makes you reserve your name before registering it. In all other states, you have the option to reserve your name ahead of time for what’s usually a small fee, but this is unnecessary if you’re ready to form your LLC.
• LLC Formation Service: Another optional cost (but one that we almost always recommend) is that of an LLC formation service to handle the paperwork on your behalf. As we discussed earlier, we love what ZenBusiness and Incfile have to offer, and we’ll dive deeper into this topic shortly.
• Registered Agent Service: Many of the same companies that offer LLC formation service also provide registered agent service, often as part of a package deal. Every LLC in every state needs to designate a registered agent to receive your important document deliveries from the state. You can save some money by serving as your own agent, but hiring a registered agent service only needs to cost around $100/year.
• Domain Name: These days, having a professional business website is more important than ever. GoDaddy can help you register the perfect domain name for your business, which is a good idea whether you’re ready to launch your website or not. Either way, it’s reassuring to know that you have a URL reserved that provides a good match with your business name.
• State-Specific Expenses: Depending on your state, there could be many other expenses or none at all! Some states require initial reports, general business licenses, and more, while others do not. Furthermore, ongoing expenses vary considerably, with some having costly annual report processes that total hundreds of dollars, while others have much lower costs or only require reports biennially. That’s why it’s so important to take a look at your state’s specific fees and align your expectations accordingly.

What Are the Penalties for Avoiding These Fees?

For some LLCs, the fees can add up quickly. You may be wondering what the repercussions would be for failing to pay them, to which the short answer is, “Don’t try it.”

No matter which state you’re forming in, there will be harsh penalties for avoiding the required fees, especially those for your Articles of Organization (or similarly named document). If you fail to pay this fee, your LLC will never exist to begin with!

In addition, skirting other required costs can force your LLC out of good standing with the state, and could even result in the state administratively dissolving your business. This would mean you’d need to follow its renewal process to get your LLC back in compliance, which usually involves multiple document filings and fees.

In short, it’s not even close to worth skirting these responsibilities because you will almost certainly get caught and you’ll just end up with more headaches and more money owed.

The Best LLC Formation Services

Does the LLC formation process sound like a hassle? Would you rather pay someone else to form your LLC while you focus on actually growing your business? Fortunately, there are plenty of reputable LLC formation services out there that can provide professional assistance for a mere fraction of a lawyer’s fees.

There are dozens of different companies that offer LLC formation services these days, and it can be difficult to discern which of them is your best option. That’s why we put together our comprehensive guide to the top-rated business formation services available online.

We encourage all of our readers to check out that guide and choose the right company for your specific situation. In addition, we’ll briefly run down a couple of our favorite options here.

In Conclusion

We’ve discussed many LLC formation costs in this article, some of which will apply to all LLCs nationwide. As you can see, there are also plenty of expenses that will only affect LLCs in certain states or with specific requirements. The most important takeaway is that you shouldn’t try to find loopholes to get out of paying these fees, as the consequences are potentially severe and easily avoidable.

That said, there are still some ways you can make financially smart decisions on your LLC formation and maintenance costs, like choosing an affordable business formation company to oversee your formation document filing and provide registered agent service.

To learn more, visit your state’s page to find out every detail about the cost of forming an LLC in your state!