How Much Does It Cost to Start an LLC in the United States
Starting a business is an exciting step, but one of the first and most common questions new entrepreneurs ask is: How much does it cost to start an LLC in the United States?
The short answer is: it depends. The total cost of forming a Limited Liability Company (LLC) varies based on your state, how you choose to file, and whether you handle everything yourself or use professional help.
This guide breaks down every major cost involved, explains what is required versus optional, and helps you understand what to expect financially before forming an LLC. The goal is to give you clarity, realistic expectations, and confidence—without sales pressure or unnecessary complexity.
Understanding the Basics of LLC Costs
An LLC is one of the most popular business structures in the United States because it offers liability protection, flexibility, and a relatively simple setup compared to corporations. However, “simple” does not mean “free.”
At a minimum, starting an LLC involves:
- Filing documents with a state government
- Paying state-required fees
- Maintaining basic compliance over time
Beyond that, costs can increase depending on the choices you make and the type of business you operate.
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State Filing Fees (With Examples)
The highest and most unavoidable cost of starting an LLC is the state filing fee. Every state charges a fee to register an LLC, and the amount varies widely.
Typical State Filing Fee Range
- Low end: $40–$50
- High end: $500+
- Average: $100–$200
Examples by State
- Delaware: ~$90
- Texas: ~$300
- California: $70 filing fee (plus additional annual costs)
- Florida: ~$125
- New York: ~$200 (plus publication requirements)
These fees are paid directly to the state and are required whether you file on your own or use a service.
Important Notes
- Filing fees are usually non-refundable
- Fees are paid once when forming the LLC
- Expedited processing may cost extra
State fees alone mean that starting an LLC is rarely free, even if you handle everything yourself.
Registered Agent Costs
A registered agent is a person or business designated to receive legal documents on behalf of your LLC. Every state requires LLCs to have a registered agent.
Your Options
- Be your own registered agent
- Use a professional registered agent service
Cost Breakdown
- DIY (yourself): $0
- Professional service: $100–$300 per year (average ~$125)
Considerations
Being your own registered agent can save money, but it requires:
- A physical address in the state
- Availability during business hours
- Public listing of your address
Many business owners choose professional agents for privacy and reliability, especially if they work from home or operate in multiple states.
Operating Agreement Costs
An operating agreement outlines how your LLC is managed, how profits are distributed, and what happens if ownership changes.
Is It Required?
- Required in some states
- Strongly recommended in all states
- Often requested by banks and investors
Cost Options
- Write your own: $0
- Template-based: $0–$50
- Attorney-drafted: $200–$1,000+
Even single-member LLCs benefit from having an operating agreement to demonstrate separation between personal and business activities.
Annual Compliance Fees
Starting an LLC is not a one-time expense. Most states require ongoing fees to keep your business in good standing.
Common Annual Costs
- Annual report fees
- Franchise taxes
- Statement of information fees
Examples
- California: $800 annual franchise tax
- Delaware: $300 annual franchise tax
- Florida: ~$138.75 annual report
- Texas: No annual fee for many small LLCs
Typical Range
- $0–$800+ per year, depending on state
Failing to pay these fees can result in penalties, loss of good standing, or administrative dissolution.
DIY vs Using a Formation Service
One of the biggest decisions that affects cost is whether you form the LLC yourself or use a professional service.
DIY (Do It Yourself)
Cost:
- State filing fee only
- Possibly $0–$50 for documents
Pros:
- Lowest upfront cost
- Full control
Cons:
- Easy to make mistakes
- Time-consuming
- No guidance or reminders
DIY works best for those who are comfortable reading legal instructions and managing deadlines.
Using a Formation Service
Cost:
- State filing fee
- Service fee (varies)
Pros:
- Saves time
- Reduces filing errors
- Often includes compliance reminders
Cons:
- Higher upfront cost
- Upsells may be offered
Many first-time entrepreneurs choose services to reduce stress and ensure accuracy, even if it costs more initially.
Hidden Costs New Business Owners Miss
Beyond the obvious fees, there are hidden or overlooked costs that often surprise new LLC owners.
Common Hidden Costs
- Business licenses and permits
- Local city or county fees
- EIN assistance (usually free if done yourself)
- Business bank account minimums
- Accounting or bookkeeping software
- Insurance (general liability, professional liability)
- Domain name and website hosting
These expenses vary by industry but can add hundreds or even thousands of dollars in the first year.
Cost-Saving Tips for Beginners
Starting an LLC does not have to be expensive if you plan carefully.
Practical Ways to Save Money
- File during regular processing (avoid rush fees)
- Obtain your EIN directly from the IRS (free)
- Start with essential licenses only
- Use free or low-cost accounting tools
- Delay optional services until revenue grows
- Compare state requirements carefully
Being strategic early can reduce unnecessary spending without increasing legal risk.
Realistic Cost Summary
Here’s a realistic first-year cost estimate for most small businesses:
| Expense Category | Estimated Cost |
|---|---|
| State filing fee | $100–$300 |
| Registered agent | $0–$150 |
| Operating agreement | $0–$200 |
| Annual compliance | $0–$300 |
| Misc. setup costs | $100–$500 |
Estimated total:
$200 to $1,500+ in the first year, depending on state and choices
Experience-Based Perspective
From an educational and research perspective, most new LLC owners underestimate ongoing costs and overestimate initial filing complexity. The paperwork itself is usually manageable, but compliance and organisation over time are where businesses struggle.
The most successful small business owners treat LLC formation as a foundation—not a one-time task—and plan financially for both setup and maintenance.
Final Thoughts and Conclusion
So, how much does it cost to start an LLC in the United States?
There is no single number, but for most entrepreneurs, the cost falls within a predictable range. By understanding state fees, registered agent requirements, compliance obligations, and optional services, you can make informed decisions that match your budget and goals.
Starting an LLC is not just about minimising costs—it’s about setting up your business correctly so it can grow, stay compliant, and operate with confidence. With proper planning, forming an LLC is an achievable and worthwhile investment in your business future.
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“AmericanVaultX Team writes practical business startup guides based on industry research and real-world reference sources. Not legal or financial advice.”
