Starting an LLC has exactly one mandatory cost: your state's filing fee, which runs from $35 in Montana to $500 in Massachusetts and averages about $132 nationwide. Everything else you see advertised — registered agent services, operating agreement templates, expedited handling — is optional. The bills that surprise people come later: recurring annual fees that range from zero to California's $800 minimum franchise tax, charged every single year whether the business makes money or not.
Break the formation bill into required and optional pieces and it stops being mysterious:
| Cost item | Typical price | Required? |
|---|---|---|
| State filing fee (Articles of Organization) | $35 – $500 | Yes — the only unavoidable one |
| EIN from the IRS | $0 | Yes if you have employees or want a business bank account — and it's free |
| Registered agent | $0 DIY – $300/yr | The role is required; paying someone else to fill it isn't |
| Operating agreement | $0 – $40 template | Required in spirit, not in most states' filing offices |
| Online formation service | ~$150 | No — they file the same form you can |
| Attorney | $1,000+ | Only for unusual ownership or tax structures |
A useful paranoia: any service charging $50 or more for an EIN is reselling something the IRS hands out free in about ten minutes at irs.gov. That's the single most common upsell in the formation industry.
Every state charges something different, and the differences don't follow any logic you'd guess. Here's a representative spread from current published fee schedules:
| State | LLC filing fee | Annual / franchise cost |
|---|---|---|
| Montana | $35 | $20 |
| Kentucky | $40 | $15 |
| Arizona | $50 | $0 |
| California | $70 | $820 ($800 franchise tax + $20 Statement of Information) |
| Wyoming | $100 | $60 |
| Delaware | $110 | $300 flat annual tax |
| Florida | $125 | $138.75 |
| New York | $200 | $4.50/yr, but see the publication trap below |
| Texas | $300 | $0 below the ~$2.47M revenue threshold |
| Nevada | $425 | $350 |
| Massachusetts | $500 | $500 |
Fees shift with legislative sessions, so confirm with your Secretary of State before filing — but these bands are stable year to year. Nine states charge no annual report fee at all for LLCs: Arizona, Idaho, Minnesota, Mississippi, Missouri, New Mexico, Ohio, South Carolina, and Texas below its franchise-tax threshold.
New York looks cheap at $200 to file — and then the state requires new LLCs to publish a formation notice in two newspapers for six consecutive weeks. In most counties that runs $300 to $600. In New York County, it can top $1,500. The counties with the cheapest newspapers are upstate, which doesn't help a business based in the city. Budget roughly $1,000 on average if you're forming a New York LLC, and know that some upstate counties let it go for a fraction of that.
The annual bill is where states really differ. Nine states charge LLCs nothing recurring. At the other end, California's $800 minimum franchise tax applies to every LLC, every year, including year one — the first payment comes due about three and a half months after formation, before most businesses have their first customer. Delaware's flat $300 annual tax and Nevada's $350 are the other big ones. Most states land between $0 and $150.
Usually not, and the marketing that says otherwise is selling you something. Delaware and Wyoming earn their reputations with courts and privacy laws that matter to investors and holding companies. But if you live in Texas and form in Wyoming, you still have to register as a foreign LLC in Texas the moment you operate there — which means a second filing fee and a second registered agent. You've doubled your paperwork to save nothing. The rule that holds for almost everyone: form in the state where the business physically operates. The exceptions are multi-state businesses and companies raising institutional money.
Filing fees alone lie about total cost. Run the same do-it-yourself LLC, no paid agent, for five years and the picture changes completely:
| State | Year 1 | Ongoing/yr | 5-year total |
|---|---|---|---|
| Texas | $300 | $0 | $300 |
| Montana | $35 | $20 | $115 |
| Wyoming | $100 | $60 | $340 |
| Ohio | $99 | $0 | $99 |
| New York (incl. publication) | ~$1,200 | ~$5 | ~$1,218 |
| Delaware | $110 | $300 | $1,310 |
| Nevada | $425 | $350 | $1,825 |
| Massachusetts | $500 | $500 | $2,500 |
| California | $70 | $820 | $3,350 |
Ohio quietly wins for a business that qualifies: $99 total over five years. California loses by a factor of 34, and it isn't close. Add a $125-a-year registered agent to any of these and the five-year column grows by $625.
Pick your state, entity type, and formation route. See year-one, ongoing, and five-year costs — including the New York publication fee — before you file anything.
LLC Cost Calculator →Expect $35 to $500 to file — the only required cost — then check the recurring column before committing, because that's what compounds. A Montana or Ohio LLC can live five years on about a hundred dollars in state fees, while the identical California business pays $3,350. Formation services are convenient, not necessary, and your EIN is always free. Once the entity exists, the tax questions start: the incorporation cost calculator compares any state, and pairing it with the LLC vs S-corp calculator and self-employment tax calculator covers the payroll and tax side of the decision.
Montana has the lowest filing fee at $35, with Kentucky at $40 and Arkansas at $45 close behind. For ongoing costs, Arizona, Missouri, New Mexico, and Ohio charge no annual report fee at all. But the cheapest state for you is almost always the one you live in, because forming elsewhere means registering as a foreign LLC at home and paying fees in both states.
It's the minimum franchise tax, and it applies to every California LLC every year, including the first, whether the business has revenue or not. The first $800 comes due within about three and a half months of formation. Add the $20 Statement of Information and the ongoing bill is $820 a year — roughly $4,170 over five years in state fees alone.
No state files articles of organization for free, so the filing fee — $35 to $500 — is unavoidable. What you can get for free: your EIN from the IRS (minutes online), your operating agreement (write it yourself), and the registered agent role (act as your own if you have an in-state street address). DIY filing means your total cost is the state fee and nothing else.
Most states require an annual report or franchise tax payment, ranging from $0 in states like Ohio and New Mexico up to California's $800 minimum. A handful of states bill every two years instead. Miss the filing and most states charge late fees, and eventually administratively dissolve the LLC.
An LLC is usually cheaper to run. An S corporation is a tax election that typically adds payroll processing and accounting costs — often $1,000 or more a year — in exchange for self-employment tax savings once profit is meaningful. Below roughly $40,000 to $60,000 of net profit, the extra overhead usually eats the savings.