LLC Filing Fees by State: Complete 2026 Guide to Formation Costs

How Much Does It Cost to Form an LLC?

LLC formation costs range from $40 to $500 in state filing fees, making the LLC one of the most affordable business structures available. But the filing fee is just the beginning. When you account for registered agent fees, operating agreement preparation, and annual report filing fees, total first-year LLC costs range from $100 to $1,500 depending on your state.

The most LLC-friendly states for cost — Kentucky ($40), Arkansas ($45), Colorado ($50), and Montana ($35) — charge minimal filing fees with simple annual renewal requirements. The most expensive states — Massachusetts ($500), Tennessee ($300), Illinois ($150), and Texas ($300) — charge significantly more for the same legal protection. State of formation matters: 73% of small businesses incorporate in their home state rather than Delaware or Wyoming, despite the online advice to do otherwise, because operating in a state where you didn't form your LLC triggers foreign qualification requirements that duplicate your costs.

For most small businesses with operations in a single state, forming your LLC in your home state is the correct choice. Delaware and Wyoming LLCs make sense for venture-backed startups seeking specific investor protections or businesses with multi-state operations, but add complexity and cost for a single-state service business.

LLC Filing Fees by State: All 50 States

The table below shows current LLC filing fees and annual report fees for all 50 states, sorted from lowest to highest filing fee. All fees are verified as of March 2026 from official Secretary of State websites.

Annual Report Fees and Ongoing LLC Costs

Filing fees are one-time costs, but LLCs also incur annual maintenance costs to stay in good standing. Annual report fees range from $0 (in some states, no annual report required) to $820 (California's $800 LLC franchise tax plus $20 filing fee). Failing to file annual reports results in administrative dissolution, which requires a reinstatement fee ($100–$500) and potentially personal liability exposure during the dissolution period.

California's annual franchise tax is the most significant ongoing LLC cost in any state. All California LLCs pay a minimum $800 annual franchise tax regardless of revenue — even if the LLC made $0 that year. New LLCs are exempt in their first taxable year (if formed after December 31 of the year before). This $800/year floor makes California particularly expensive for early-stage businesses with minimal revenue.

New York imposes a unique publication requirement: newly formed LLCs must publish notice of formation in two newspapers (one daily, one weekly) in the county where the LLC operates. This publishing requirement costs $400–$2,000 depending on county, with New York City counties being most expensive. Failure to publish within 120 days of formation suspends the LLC's right to sue in New York courts.

Massachusetts charges $500 to form an LLC and $500 annual filing fee, making it the most expensive state for both initial and ongoing LLC costs. Tennessee charges $300 to form (plus $50/member up to a $3,000 maximum for multi-member LLCs) and $300 annually. Texas charges $300 to form and has no annual report — instead requiring a franchise tax return when revenue exceeds $2.47 million (most small businesses pay no Texas franchise tax).

Registered Agent Requirements and Costs

Every LLC must designate a registered agent — a person or service with a physical address in your state of formation available during business hours to receive legal documents. You can serve as your own registered agent (no cost beyond your time) or hire a registered agent service.

Professional registered agent services cost $50–$300/year and offer several advantages: they prevent your home address from appearing in public state records, they ensure legal documents are received and forwarded promptly even when you're traveling, and they provide reminders when annual reports are due. Popular services include Northwest Registered Agent ($125/year), Registered Agent Inc ($200/year), and National Registered Agents ($299/year). All three are nationally licensed and can serve as registered agents in any state.

If you operate from a home office and want privacy, a registered agent service is worth the $100–$150/year cost. Your registered agent address appears on public state records that appear in online business searches — if privacy matters, don't use your home address.

Businesses that form an LLC in their home state and are also the managing member can serve as their own registered agent at no cost, provided they have a physical address in the state (not a P.O. Box) available during business hours. This works well for businesses with a fixed commercial address or home office.

Operating Agreement: Required or Recommended?

Only a handful of states legally require an LLC operating agreement (California, New York, Maine, Missouri, and Nebraska). But in every state, having one is essential. Without an operating agreement, your LLC's governance defaults to state law, which may not reflect your intentions for profit distribution, management authority, or what happens when a member wants to exit.

A single-member LLC operating agreement costs $0–$500: many attorneys offer free templates, legal zoom charges $99, and a private attorney charges $300–$500 for a customized single-member agreement. For multi-member LLCs, the stakes are higher — disagreements about profit distribution and management authority are a primary cause of business partnership failures. A customized multi-member operating agreement from an attorney costs $800–$2,500 but prevents far more expensive disputes.

For single-member LLCs, the operating agreement also serves a tax purpose: it documents that the LLC is separate from the owner, which is important evidence if the IRS ever audits your business and questions whether you properly maintained the corporate veil.

Cheapest vs. Most Expensive States to Form an LLC

The five cheapest states to form an LLC (considering first-year total costs including filing fee + registered agent + typical annual report) are: Kentucky ($40 filing + $15 annual report), Montana ($35 filing + $20 annual report), Arkansas ($45 filing + $150 annual report), New Mexico ($50 filing + no annual report required), and Colorado ($50 filing + $10 annual report).

The five most expensive states for first-year LLC costs are: California ($70 filing + $800 franchise tax + $20 annual report = $890 first year, though year-1 franchise tax exemption may apply), Massachusetts ($500 filing + $500 annual = $1,000 first year), Tennessee ($300 filing + $300 annual), New York ($200 filing + $200 biennial + $400–$2,000 publication requirement), and Illinois ($150 filing + $75 annual).

However, formation state choice should never be based solely on filing fees. Operating a Kentucky LLC while doing business in California still requires California foreign LLC qualification ($70) and payment of California franchise tax. The $800 California franchise tax applies to any LLC doing business in California regardless of where it was formed. Filing fees represent a one-time cost; ongoing operational costs are what matter for long-term economics.

How to File for an LLC: Step-by-Step

Step 1: Choose a business name. Your LLC name must include "LLC," "L.L.C.," or "Limited Liability Company" and must be distinguishable from existing entities on file with your state. Check name availability at your Secretary of State website before committing to a name. Cost: free.

Step 2: Choose a registered agent. Decide whether you'll serve as your own registered agent or hire a service. If hiring a service, sign up before filing so you have their address ready for your Articles of Organization.

Step 3: File Articles of Organization. Complete and submit your state's LLC formation form, typically called "Articles of Organization" or "Certificate of Formation." Most states now accept online filing. Pay the filing fee ($35–$500). Processing time: 1–4 weeks for standard filing, 1–3 business days for expedited processing (usually $25–$100 additional).

Step 4: Create an operating agreement. Draft and sign an operating agreement, even if your state doesn't require it. Keep this document with your business records. You typically don't file it with the state.

Step 5: Get an EIN. Apply for an Employer Identification Number (EIN) from the IRS at irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. This takes 10 minutes and is free. You need an EIN to open a business bank account, hire employees, and file business taxes.

Step 6: Open a business bank account. Use your EIN and formation documents to open a dedicated business checking account. Never mix personal and business funds — commingling funds is the primary reason courts "pierce the corporate veil" and hold LLC members personally liable for business debts.

Common LLC Formation Mistakes to Avoid

Using a personal address when privacy matters is the most easily avoided mistake. Your registered agent address appears in public state records. If you work from home and receive occasional odd mail from litigants or competitors, use a registered agent service or commercial mailbox service address.

Forming an LLC in the "wrong" state is a common error based on outdated internet advice. Delaware is the best state if you're raising venture capital (most VCs require Delaware C-Corp structure anyway). Wyoming is the best state if privacy is paramount and you have no business presence in any state. For 99% of small business owners who operate locally, form your LLC in your home state. Foreign qualification in your home state costs as much as formation and triggers dual annual reports.

Ignoring annual report deadlines causes more administrative LLC dissolutions than any other mistake. Set a recurring calendar reminder for your annual report due date (varies by state — some are due on the anniversary of formation, others have fixed dates like January 1 or June 1). Administrative dissolution can take months to reverse and creates personal liability exposure during the gap.

Not separating business and personal finances defeats much of the purpose of forming an LLC. Open a dedicated business checking account within 30 days of formation, get a business credit card, and pay all business expenses from business accounts. Keep personal expenses personal. This separation is the most important practical step to maintaining the liability protection the LLC structure provides.

Calculate Your Total LLC Formation Costs

Use our LLC Cost Calculator to see your total first-year and ongoing costs for your specific state. The calculator includes state filing fees, typical registered agent costs, annual report fees, and California franchise tax where applicable.

LLC Tax Treatment: How LLCs Are Taxed by Default and by Election

By default, a single-member LLC is taxed as a "disregarded entity" — the IRS treats it as if it doesn't exist, and all LLC income flows to the owner's Schedule C (same as a sole proprietor). A multi-member LLC is taxed as a partnership by default, with each member reporting their share of income on Schedule K-1. Neither default requires a separate business tax return; the income flows to the owner's personal 1040.

The significant tax disadvantage of sole proprietor and partnership taxation: all net profit is subject to self-employment tax (15.3% on the first $168,600 of net profit in 2024). A business owner earning $80,000 in net LLC profit pays $11,304 in self-employment tax on top of income tax. An S-Corp election can reduce this: the owner pays SE tax only on the salary portion (say $45,000) and takes the remaining $35,000 as distributions not subject to SE tax — saving $5,355/year at the cost of additional accounting fees ($1,500–$3,000/year). The math works when net profit exceeds $50,000–$70,000.

State income tax treatment varies significantly. Nine states have no personal income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming) — in these states, LLC profits are not subject to state income tax. California taxes LLC income at 1% to 13.3% depending on income level. New York taxes at 4% to 10.9%. State income tax can be a significant ongoing cost that makes low-income-tax states attractive for high-earning businesses.

The IRS requires reasonable compensation for S-Corp owner-employees: you cannot pay yourself $0 salary and take everything as distributions to avoid SE tax. The IRS uses the "reasonable compensation" standard, typically defined as what a comparable employee would earn for the same role. An S-Corp owner who actually works in the business should pay themselves a salary within $20,000–$30,000 of market rate for their role.

LLC vs. Sole Proprietorship vs. Corporation: When to Choose What

A sole proprietorship costs $0 to "form" (you're automatically a sole proprietor when you earn business income as an individual). But it offers zero liability protection: your personal assets — home, savings, car — are exposed to business debts and lawsuits. For any business that could realistically generate a lawsuit (serving the public, providing professional services, employing staff), the $40–$500 LLC formation cost is the best insurance premium you'll ever pay.

An S-Corporation is not a state-level entity type — it's an IRS tax election that an LLC or C-Corp can make. An LLC taxed as an S-Corp can reduce self-employment taxes by splitting income between salary and distributions. The crossover point where the S-Corp election saves more than it costs (accounting fees: $1,500–$3,000/year additional) is typically at $50,000–$70,000 in net business profit. Below that threshold, a single-member LLC taxed as a sole proprietor is simpler and equally legal.

A C-Corporation is the correct structure only for businesses planning to raise venture capital, offer stock options to employees, or eventually go public. The corporate tax rate (21%) plus dividend tax when profit is distributed creates double taxation that makes the C-Corp disadvantageous for small businesses. Delaware C-Corps are the investor-preferred structure because Delaware corporate law is well-established and investor-friendly. For 99% of small business owners, an LLC is the correct choice.

The LLC-to-S-Corp conversion path is well-established and inexpensive: operate as a single-member LLC until profits reach $50,000+, then file Form 2553 with the IRS to elect S-Corp tax treatment. This converts the LLC to be taxed as an S-Corp without changing your state-level entity type or requiring new formation documents. The conversion takes effect the following tax year.

• ›Sole Proprietorship: $0 cost, zero liability protection, not recommended for any business that could be sued
• ›Single-member LLC: $40–$500 filing fee, full liability protection, taxed as sole proprietor by default
• ›Multi-member LLC: $40–$500 filing fee, liability protection for all members, taxed as partnership by default
• ›LLC taxed as S-Corp: additional $1,500–$3,000/year in accounting, reduces SE tax when net profit exceeds $50,000
• ›C-Corporation: $50–$300 filing fee, best for venture-backed startups, double taxation disadvantage for small businesses

Annual LLC Maintenance Checklist

Maintaining your LLC's good standing requires consistent annual attention. Missing any of these items risks administrative dissolution, which suspends your right to conduct business and exposes you to personal liability during the gap in standing.

File your annual report with your Secretary of State. Due dates vary: some states require filing on the anniversary of formation, others set a fixed annual date (January 1 in Nevada, June 1 in Massachusetts). Many states send reminder notices to your registered agent — ensure your registered agent address is current.

Pay state LLC fees. California's $800 franchise tax is due April 15 (or the 15th day of the 4th month after your fiscal year end). Massachusetts' $500 annual fee is due on the anniversary of formation. Tennessee's $300 annual fee is due on the first day of the 4th month after your fiscal year end.

Update your operating agreement for any material changes: new members, changed ownership percentages, new management structure, or significant changes in business operations. While you typically don't file the operating agreement with the state, keeping it current ensures it accurately reflects how your LLC operates.

Maintain a separate business bank account and credit card. If you've been commingling personal and business funds, open a dedicated business account immediately. Order business checks and a business debit card. Update all vendor accounts, client payment arrangements, and recurring subscriptions to use the business account.

Review and renew your registered agent service annually. If you're using a professional service, they'll send renewal invoices — pay promptly. If you're serving as your own registered agent, ensure your address on file with the Secretary of State remains accurate and reachable during business hours.

Consult your accountant about any changes in tax treatment. If your net profit crossed $50,000 this year, discuss the S-Corp election. If your state recently changed LLC tax treatment, annual report requirements, or fee schedules, your accountant should flag these changes and advise on any action needed.

Explore Business Startup Costs