How much does it cost to form an LLC?

The one cost you cannot avoid: the state filing fee

Forming an LLC means filing one document — usually called the articles of organization or certificate of formation — with your state's business filing office. The fee for that filing is the only cost that is genuinely mandatory, and it varies more than people expect: roughly $35 at the low end, a few hundred dollars in the most expensive states, with most states clustered somewhere between $50 and $200.

Pay it directly on the state's own website. Every state runs an online filing portal, most approve in a few business days, and the fee you pay there is the fee. Search for your state's secretary of state (or, in a few states, its division of corporations or department of state) and check the current number before you budget — filing fees get raised.

The cost people forget: the annual or biennial fee

Almost every state charges you again, every year or every other year, to keep the LLC in good standing. It goes by different names — annual report, statement of information, franchise tax, annual registration — and it ranges from nothing at all to several hundred dollars a year. A couple of states charge a minimum annual tax that dwarfs the formation fee itself.

This is the cost that sinks people. Miss the filing and the state can administratively dissolve your LLC, which quietly removes the liability shield you formed it for. Put the due date in your calendar the day you file, not the following year when a reminder email might land in spam.

What is free

Several things that get bundled into paid packages cost nothing if you do them yourself:

• Your EIN (federal tax ID) is free directly from the IRS, issued online in minutes. Anyone charging you for one is charging you for typing.
• A business name availability search is free on your state's filing portal.
• An operating agreement is free to write. Most states do not require you to file one, but you should absolutely have one — especially if you are the only member, because it is part of what shows the LLC is real and separate from you.
• A business bank account is usually free to open, and opening one is not optional in practice: mixing business and personal money is the single most common way owners lose the liability protection they paid for.

What costs money and is sometimes worth it

Registered agent service: every LLC needs a registered agent with a physical address in the state, available during business hours to receive legal papers. You can be your own agent for free in most states. Paying a service $50 to $300 a year makes sense if you work from home and would rather not have your home address in a public database, if you travel, or if you are forming in a state you do not live in.

Expedited filing: $25 to $100 in most states, and genuinely useful only when a bank, landlord, or client is waiting on the certificate.

Certified copies and a certificate of good standing: usually $10 to $50 each. Banks and lenders sometimes ask; do not buy them in advance.

A lawyer: typically $500 to $2,000 for formation work. Worth it when there are multiple owners with unequal contributions, outside investors, real estate, professional licensing rules, or an unusual ownership structure.

Formation services: what you are really paying for

Online formation companies advertise "$0 plus state fees." The filing itself really is cheap for them — the business model is the recurring add-ons: registered agent renewals, compliance alerts, operating agreement templates, EIN filing, and annual report service, which together often run $200 to $400 a year after the first-year discount expires.

There is nothing wrong with paying for convenience. Just read the renewal terms before you subscribe, and know that the filing you are paying them to do is a short form you could complete yourself in about twenty minutes.

Do not form in Delaware or Wyoming to save money

The advice to incorporate in a low-fee state circulates constantly and costs people money. If you live and operate in one state and form your LLC in another, you generally have to register the out-of-state LLC as a foreign LLC where you actually do business — which means two filing fees, two annual reports, and two registered agents.

For a business that operates in one state, form it in that state. The exceptions are narrow: venture-backed companies, certain real estate holding structures, and businesses genuinely operating in multiple states.

A realistic first-year budget

For a single-member LLC operating in the owner's home state, doing the filing themselves:

• State filing fee: $50 to $200 (one time, varies widely by state).
• EIN: $0.
• Operating agreement: $0 if you write it, more if you want it drafted.
• Registered agent: $0 if you serve as your own, otherwise $50 to $300 per year.
• Annual report or franchise tax: $0 to several hundred, depending on the state, starting in year one or two.
• Business bank account: usually $0, sometimes a small monthly fee below a balance minimum.

The cost that matters more than any of these

The expensive mistake is not overpaying at formation. It is forming the LLC and then running it like a personal account — paying personal bills from the business, skipping the operating agreement, never filing the annual report, signing contracts in your own name instead of the company's. When a creditor argues the LLC was never really separate from you, those are the facts they use, and the liability protection you filed for disappears.

Budget the filing fee, yes. Then budget the ten minutes a month that keep the protection intact.