How Much Does It Cost to Start an LLC? Real Costs By State (2025 Guide)

Starting an LLC comes with varying state filing fees. You can expect to pay between $35 and $500, though most states charge $50 to $200. Montana stands out as the most affordable option with a $35 filing fee, while Massachusetts demands the highest at $500.

The state filing fee might be your first expense, but it's just one part of the LLC formation cost picture. Most business owners spend around $1,000 to get their LLC up and running. Your total costs will include both the initial setup and regular expenses like annual reports.

Some states have specific requirements that affect your LLC's long-term costs. California, for example, requires business owners to pay an $800 yearly fee, while other states need publication notices.

Let us walk you through the exact costs to start an LLC in each state. You'll learn about the budget requirements, ongoing expenses, and some unexpected costs that might catch new business owners off guard. The guide also reveals the most budget-friendly states to establish your business entity in 2025.

How much does it cost to start an LLC in 2025?

The cost to start an LLC in 2025 ranges from $35 to $500 for the original state filing fee. Most states charge between $50 and $200. The national average sits at $132, which makes this business structure available to most entrepreneurs.

Typical cost range across states

Your LLC formation costs will vary by a lot based on your chosen state. Montana has the lowest fee at $35, while Kentucky and Arkansas come in at $40 each. Massachusetts tops the list with $500, and both Tennessee and Texas require $300.

Here's a breakdown of costs by region:

• Low-cost states ($35-$50): Montana, Kentucky, Arkansas, Arizona, Mississippi, Michigan, Colorado, Hawaii, Iowa, Missouri, New Mexico

• Mid-range states ($51-$200): California ($70), Florida ($125), Virginia ($100), Washington ($200)

• High-cost states ($201-$500): Massachusetts ($500), Tennessee ($300), Texas ($300), Alaska ($250)

Some states also adjust their fees based on member count or business income. To name just one example, see Tennessee's structure - $50 per member with a $300 minimum and $3,000 maximum.

What's included in the base cost

The filing fee covers your Articles of Organization (also known as Certificate of Formation or Certificate of Organization) processing. This document establishes your LLC's legal existence by registering key information with your state's business authority, usually the Secretary of State.

The base fee is just the start of your potential costs. Your location and business requirements might add:

• Publication requirements: States like Arizona, Nebraska, and New York ask you to publish notices in local newspapers, costing $40 to $2,000

• Initial reports: California needs a Statement of Information within 90 days of registration for $20

• Registered agent designation: Every state requires this, but you can serve as your own

• Name reservation: Optional in most states, typically costs $10-$50

Why costs vary by state

Each state's LLC costs reflect different factors:

1. Government funding models: States with smaller tax bases often charge higher filing fees to fund their business departments.

2. Administrative processing costs: More complex regulatory environments usually mean higher operational costs.

3. Economic incentives: Lower fees help some states attract businesses and boost their economy.

4. Regulatory philosophies: Different approaches to business oversight affect fee structures.

5. Population and demand: Higher business formation volumes can lead to lower per-filing costs.

Annual costs show even bigger differences. Annual or biennial report fees range from $0 in several states (including Alabama, Arizona, Idaho, Minnesota, Missouri, New Mexico, Ohio, Pennsylvania, and South Carolina) to $800 per year in California. California also charges an extra $20 biennial fee.

Smart business planning requires you to look at both startup costs and recurring expenses that will impact your business finances long-term.

State-by-state LLC filing fees

The cost to file an LLC differs remarkably across the United States. Your choice of state can make a big difference to your wallet. State filing fees in 2025 range from a modest $35 in Montana to $500 in Massachusetts.

Lowest and highest filing fees

Kentucky keeps things affordable with a $40 filing fee for LLC formation documents. Arkansas charges $45 for online filings. Eight states maintain a simple $50 filing fee: Arizona, Colorado, Hawaii, Iowa, Michigan, Mississippi, Missouri, and New Mexico.

The states that charge the most for LLC formation include:

• Massachusetts: $500 (highest in the nation)

• Tennessee: $300 minimum (adds $50 per member above six members, up to $3,000)

• Texas: $300

• Alaska: $250

• Washington DC: $220

• New York: $210 (plus publication requirements costing $425-$1,200 extra)

Delaware, known for its business-friendly laws, asks $140 for filing and charges relatively steep annual fees of $300.

States with no annual report fees

One-time filing fees are just the start. Annual report fees can substantially affect your LLC's budget year after year. The good news is that several states don't require any annual report fees:

• Arizona

• Missouri

• New Mexico

• Ohio

• Pennsylvania (needs filing just once every 10 years)

• South Carolina (for LLCs with default tax status)

• Texas (for LLCs earning less than $1.23 million)

• Idaho

• Minnesota

• Mississippi

Some states keep annual fees low. Kentucky, Colorado, and Hawaii charge just $15, $10, and $15 respectively.

The costs can get steep in some states. California tops the list with an $800 annual franchise tax and a $20 biennial statement fee. Nevada requires $350 annually, while Delaware asks for $300 each year.

Where to find updated state fee charts

State filing fees change often. Here are reliable sources to check current rates:

1. State Secretary of State websites provide official fee schedules and filing requirements.

2. LLC University's annual fee chart offers a detailed database at llcuniversity.com with current information about initial filing and annual maintenance costs for all 50 states.

3. State business development offices provide business resource centers with current fee details and help.

4. Professional formation services like ZenBusiness maintain current fee charts as part of their offerings.

Some states require more than simple filing fees. Arizona, Nebraska, and New York need newspaper publication notices that can add $40 to $2,000 to startup costs.

States requiring biennial reporting (Alaska, Indiana, Iowa, Nebraska, New York, and Washington DC) might charge more but need less frequent filings.

Ongoing LLC costs you should plan for

Starting an LLC costs more than just the original filing fees. Many entrepreneurs don't realize the total business expenses include several ongoing costs. Setting up your LLC is just the beginning - you'll need to budget carefully for recurring fees that will affect your bottom line throughout your company's life.

Annual or biennial report fees

Your LLC must file regular reports to stay in good standing with most states. The frequency and costs vary substantially from state to state. These annual report fees typically range from $0 to $300, though some states have opted for biennial (every two years) reporting schedules.

Arizona, Missouri, New Mexico, Ohio, Pennsylvania, South Carolina, and Texas (for LLCs with less than $1.23 million in revenue) don't charge any annual report fees. States like Idaho, Minnesota, and Mississippi need information reports but don't charge filing fees.

Delaware charges $300 annually, while Nevada asks for $350 per year. Washington DC takes it further with a $300 biennial fee. Your location plays a huge role in determining these ongoing costs.

Franchise taxes and minimum business taxes

LLC owners must pay franchise taxes - this is a big deal as it means that businesses pay for the right to operate within state borders. California tops the list with its steep $800 annual franchise tax. The state offers some relief by exempting first-year LLCs formed between January 2021 and January 2024[174].

California LLCs that make substantial income face extra graduated fees based on revenue:

• $900 for income between $250,000-$499,999

• $2,500 for income between $500,000-$999,999

• $6,000 for income between $1,000,000-$4,999,999

• $11,790 for income exceeding $5,000,000[153]

Delaware ($300), Tennessee (minimum $300)[174], and Texas (varies with revenue)[174] also impose notable franchise taxes.

Business license renewals

Your LLC might need several business licenses that require regular renewal, depending on your industry and location. These renewal fees continue throughout your business's lifetime, unlike one-time formation fees.

Arizona's Transaction Privilege Tax (TPT) license needs yearly renewal by January 1st. The state doesn't charge a renewal fee, but missing the deadline can result in penalties up to 50% of city renewal fees and might count as a class 3 misdemeanor.

Running a business without proper licensing in any state can have serious consequences:

• Financial penalties

• Administrative dissolution of your LLC

• Loss of liability protection

• Personal liability for business debts

The cost of setting up an LLC goes well beyond the original filing fees. Smart financial planning must account for these ongoing expenses to keep your company legally compliant and in good standing year after year.

Optional and hidden LLC costs

Starting an LLC comes with many hidden costs that can greatly affect your budget. These optional expenses often add hundreds or maybe even thousands of dollars to your starting costs.

Registered agent services

Your LLC needs a registered agent to get legal documents and official mail. You can be your own agent for free, but professional services cost between $100 and $300 annually.

These services protect your privacy by keeping your personal address off public records. They also forward mail and stay available during business hours. LegalZoom charges $249 per year, while other companies offer rates as low as $99 for the first year.

Operating agreement preparation

An operating agreement shows how your LLC is owned and run. Most states don't require you to file this document publicly, but it's crucial for internal management.

You can create one at no cost, or pay professionals anywhere from $50 to $750. Five states make this mandatory - California, Delaware, Maine, Missouri, and New York.

DBA (Doing Business As) registration

Your LLC might need a DBA registration if you use a different name than your legal one. Counties handle these filings with different fees. San Francisco asks for about $63 while San Diego charges around $54. You only need this if you do business under another name.

Publication requirements in some states

Arizona, Nebraska, and New York make things tough by requiring new LLCs to announce their formation in local newspapers. New York's fees get pricey, ranging from $600 to $2,000 based on your county, plus a $50 filing fee for the Certificate of Publication. Albany County offers better rates at about $150.

Name reservation fees

You might want to reserve your business name before forming your LLC. Texas charges $40 for a 120-day reservation, with a $40 fee to renew it. This optional step keeps your chosen name available while you prepare everything else.

EIN application (if using a service)

Getting an Employer Identification Number (EIN) from the IRS costs nothing, but some formation services charge $50 to several hundred dollars for this service. The IRS website lets you apply in minutes for free, so paying someone else to do this isn't really necessary.

Best and worst states to form an LLC

You can save thousands of dollars throughout your business's lifetime by choosing the right state to form your LLC. Kentucky leads the pack as the cheapest state with a filing fee of just $40 and an annual fee of only $15.

Most affordable states for LLC formation

Several budget-friendly states combine low original filing fees with minimal ongoing costs:

• Missouri: $50 filing fee with no annual report or franchise tax requirements

• Arizona: $50 filing fee with no annual report fees

• New Mexico: $50 filing fee with no annual reporting requirements

• Mississippi: $50 filing fee with no annual report fees

• Montana: Lowest filing fee in the nation at just $35

These five states help you save money in the long run because they either eliminate or minimize recurring expenses that add up over time.

States with high ongoing costs

Low original filing fees can be deceptive. California sets a modest $70 formation fee but demands a hefty $800 annual franchise tax whatever your LLC's profitability. Delaware draws businesses with its business-friendly legal system but requires a $300 annual franchise tax.

Massachusetts tops the list as the most expensive state with a $500 filing fee and a $500 annual report fee, which adds up to $1,000 yearly. Nevada also ranks among the priciest options, asking $425 upfront followed by $350 annually.

What makes sense to form in another state

Small businesses rarely benefit financially from forming an LLC outside their home state. Tax advantages in states like Wyoming or Nevada don't help much since you'll need to register as a foreign LLC in your home state anyway. This means you end up paying fees in both places.

Out-of-state formation makes sense in these cases:

• You do substantial business in that state

• The state offers great economic incentives or funding opportunities

• Your industry benefits from that state's specific laws or regulations

Note that running operations in multiple states means you must maintain registered agents and file annual reports in each location. These requirements quickly eliminate any potential savings.

Conclusion

LLC startup costs range from $35 to $500 for state filing fees. Most entrepreneurs should set aside around $1,000 to cover all formation expenses. Montana leads with the lowest fee at $35, while Massachusetts charges a hefty $500. Your business plan must account for visible and hidden ongoing expenses that impact your bottom line.

Annual maintenance costs play a vital role in your long-term business budget. Arizona, Missouri, and New Mexico attract budget-conscious business owners since they don't require annual reports. California's yearly franchise tax runs $800 whatever your profits, which dwarfs its modest $70 formation fee.

First-time entrepreneurs often miss publication requirements as a major expense. New York's newspaper announcement requirement adds $600-$2,000 to startup costs. Registered agent services, operating agreement preparation, and business license renewals add up over time.

Smart state selection can save thousands throughout your business's lifetime. Local LLC formation makes the most financial sense for small businesses, despite tax benefits elsewhere. Multiple state registration means you'll need registered agents and report filing in each jurisdiction. This doubles your administrative work and costs.

Research your state's specific requirements before launching your LLC. State filing fees change often, so check official government websites or trusted formation services for current information. Understanding everything in startup and ongoing costs helps you avoid surprises while building your business on solid financial ground.

FAQs

Q1. What is the typical cost range for starting an LLC across different states?

The cost to start an LLC varies by state, ranging from $35 to $500 for initial filing fees. Most states charge between $50 and $200, with the national average being around $132.

Q2. Are there any states that don't require annual report fees for LLCs?

Yes, several states don't require annual report fees, including Arizona, Missouri, New Mexico, Ohio, Pennsylvania, and South Carolina. Some states like Idaho, Minnesota, and Mississippi require information reports but don't charge fees for filing.

Q3. What are some hidden costs to consider when forming an LLC?

Hidden costs may include registered agent services ($100-$300 annually), operating agreement preparation ($50-$750), DBA registration (varies by county), publication requirements in some states (up to $2,000 in New York), and name reservation fees.

Q4. Which states are considered the most affordable for LLC formation?

The most budget-friendly states for LLC formation include Missouri, Arizona, New Mexico, Mississippi, and Montana. These states combine low initial filing fees with minimal ongoing costs, offering significant long-term savings.

Q5. Is it beneficial to form an LLC in a state other than where you live?

For most small businesses, forming an LLC in your home state makes the most financial sense. Out-of-state formation rarely provides advantages unless you conduct substantial business in that state, benefit from specific state laws, or receive compelling economic incentives. Multi-state operations often result in paying fees in multiple jurisdictions, potentially erasing any savings.