What Does an LLC Cost?
The one-time cost, the yearly cost, and what you can safely skip.
Verdict: expect roughly $40 to $500 once to form it, then $0 to $800 a year to keep it, depending almost entirely on your state. Most of the other costs you will be offered are optional.
The one-time cost
The only unavoidable cost is the state filing fee for your articles of organization. It varies enormously: some states charge well under $100, a few charge several hundred. Your secretary of state's website lists the current figure, and it is the only source worth trusting.
Everything else at formation is optional. Expedited processing rarely matters. A formation service does the same filing you can do yourself in under an hour. A lawyer is genuinely worth it if you have partners or a regulated business, and generally not otherwise.
The yearly cost
Three recurring items, and only the first is universal.
Annual or biennial report fees. Most states want a short filing to keep your registration current, often with a fee. This ranges from nothing to a few hundred dollars. A handful of states charge a franchise tax instead, which can be higher and may apply whether or not you made money.
Registered agent. Free if you act as your own, which most single-owner businesses can. A commercial agent runs about $100 to $300 a year and buys you privacy and reliability.
Bookkeeping and tax prep. Not required, but realistic. A Schedule C added to your personal return is modest. If you later elect S corp treatment, budget considerably more, because you add payroll and a separate return. The S corp calculator prices this properly.
What you can skip
Paying for an EIN. It is free from the IRS and takes about fifteen minutes. Services charging for this are selling you a free government form. See EIN Easy Guide.
Expensive operating agreement packages. For a single-owner LLC a solid template is fine. Multi-owner is different, and worth real money.
Forming in another state. Wyoming and Delaware are marketed hard. If you operate from your home state you will have to register there anyway, so you pay twice for one business.
Corporate kits and seals. Decorative. Nothing requires them.
The cost people forget
The real ongoing cost is not a fee, it is discipline. LLC protection depends on keeping the business genuinely separate: its own bank account, its own records, contracts in the company's name. That costs time rather than money, and skipping it can quietly undo the protection you paid for.
Is it worth it?
For a business with real revenue and real exposure, a few hundred dollars a year for liability protection is straightforward value. For a side project earning a little with almost no risk, it is a cost without much benefit yet. Our three-question test is the fastest way to tell which one you are.
Frequently asked questions
The cheapest state is the one you live and work in, whatever it charges. Forming somewhere cheaper and operating from home means registering as a foreign LLC at home too, so you pay both.
In most states, yes. Usually an annual or biennial report with a fee, and in some states a franchise tax that applies whether or not the business made money.
No. You can be your own in most states for free. A paid agent costs about $100 to $300 a year and keeps your address off the public record.
Yes. Apply directly at IRS.gov and it costs nothing. Any service charging for an EIN is charging you for a free form.