How Much Does an LLC Cost? A Complete 2026 Breakdown

An LLC costs $35 to $500 to form in 2026, plus $0 to $800 per year to maintain — depending on the state, the add-on services, and whether you DIY or pay a formation service. The cheapest possible path is $35 (Montana, DIY, no add-ons). The expensive path is $1,000+ in year one (Massachusetts, NY publication, attorney-drafted operating agreement, formation service). Most founders end up at $200-$600 in year one. Here’s exactly where the money goes.

Reviewed by Soft Crown Editorial Team — fact-checked against primary government sources • Last updated 2026-04-25 • 7 primary sources cited

TL;DR

LLC cost is six line items stacked: state filing fee ($35-$500), annual or biennial report fee ($0-$500), franchise tax in some states ($0-$800/yr), registered agent service ($0-$249/yr), operating agreement ($0-$1,500), and publication or licensing in a few states ($30-$2,000). Year-one cost ranges $35-$2,200 depending on state and add-ons. Five-year cost of ownership matters more than year one — California’s $4,070 5-year total is the highest, while Mississippi/Missouri/New Mexico tie at $50 for cheapest. The DIY path saves $200-$600/yr versus a paid formation service like ZenBusiness or LegalZoom. The IRS direct EIN application is free; pay-services charge $50-$99 to do the 5-minute online form for you.

The 6 cost components of an LLC

1. State filing fee — the only unavoidable cost

Every state charges a one-time fee to register the Articles of Organization (or Certificate of Formation in some states). Range: $35 (Montana) to $500 (Massachusetts). This is the only LLC cost no founder can skip — without filing this form, the LLC doesn’t legally exist.

The wide range across states is largely a state revenue policy choice. There’s no quality difference between a Montana LLC ($35) and a Massachusetts LLC ($500). Liability protection is identical; the legal effect is identical. The fee disparity reflects state legislative decisions about how to fund the SOS office, not anything substantive.

Median across all 50 states + DC: $100. Mode (most common): $100. Five states cluster at $50 (Mississippi, Missouri, New Mexico, Hawaii, Michigan). Five states cluster at the $300+ tier (Texas $300, Tennessee $300, Massachusetts $500, Nevada $425, plus a few mid-tier outliers).

See the pillar page filing fee table for all 50+1 jurisdictions, sourced directly from each state’s SOS website.

2. Annual or biennial report fee — the recurring entity tax

43 states + DC require the LLC to file an annual or biennial information report to keep the LLC in good standing. The report typically updates: registered agent, principal office address, member or manager names (in some states), and confirms the LLC is still active.

Range: $0 (Arizona, Missouri, New Mexico, Ohio, South Carolina, Texas under threshold, Mississippi) to $500 (Massachusetts). Median: $50/yr.

Cadence variants:

• Annual — most states. Due on a fixed date or the LLC’s anniversary month.
• Biennial — California, New York, Iowa, Indiana, Nebraska, Alaska, DC. Every 2 years.
• Decennial — Pennsylvania only. $70 every 10 years.

Missing the report fee triggers $25-$400 in late penalties and eventually administrative dissolution after 60-180 days. Once dissolved, the LLC loses its liability shield until reinstated.

The annual report fee is the recurring cost most founders underestimate. A “$50 LLC” with $200/yr annual report becomes a $1,050 5-year cost — that’s why the 5-year total of ownership matters more than year-one cost.

See /llc-renewal-cost for the full 50-state annual report cadence and fee table.

3. Franchise tax — the state-specific surprise

Eight to ten states impose an entity-level tax on top of the report fee. This is the line item that ruins California-vs-Wyoming math for most people. The 2026 franchise-tax states for LLCs:

• California — $800/yr minimum, Franchise Tax Board. Plus a gross receipts fee of $900-$11,790 above $250K.
• Delaware — $300/yr flat, Delaware Division of Corporations.
• Tennessee — $300/yr minimum + 0.25% net worth.
• Alabama — $50/yr minimum Business Privilege Tax.
• Texas — 0.375%-0.75% margin tax above $1.23M revenue.
• New York — annual filing fee $25-$4,500 sliding for partnerships, tax.ny.gov.
• Arkansas — $150/yr franchise tax.
• Georgia — Net Worth Tax for corporate-electing LLCs.

Most states do not have an LLC franchise tax. The list above covers the high-impact cases.

For full details, see /llc-franchise-tax-by-state.

4. Registered agent service — optional but practical

Every state requires the LLC to designate a registered agent — a person or service with a physical street address (no PO boxes) in the formation state, available during business hours to receive service of process and official mail.

You can be your own RA at $0 if you live in the formation state and accept your home address being public record. Otherwise:

• Northwest Registered Agent — $125/yr (northwestregisteredagent.com)
• ZenBusiness — $199/yr (often bundled with formation packages)
• LegalZoom — $249/yr
• Wyoming-specific budget agents — $50-$80/yr

The differentiator is mostly customer support, document storage, and how aggressively the service upsells additional products. Functionally, all RAs do the same thing: receive your mail, scan it, forward to you.

For deeper analysis, see /registered-agent-cost.

5. Operating agreement — required in 5 states, smart everywhere

A written contract among members defining management, ownership, profit/loss allocation, and dissolution procedures. Five states legally require it: California, Delaware, Maine, Missouri, New York. The other 45 states do not require one, but most banks require an operating agreement to open a business bank account.

Cost tiers:

• Free SBA template or state-bar form — $0
• Online template (LegalNature, Rocket Lawyer, Bonsai) — $39-$99
• Attorney-drafted, single-member — $400-$800
• Attorney-drafted, multi-member with profit/loss allocations — $800-$1,500

Sources for free templates: the American Bar Association Section of Business Law model OA library, the SBA template, and many state bar associations.

For a single-member LLC with no investors, the free template is usually enough. For multi-member or anything with a buy-sell provision, attorney review is worth $400-$800 because the default state law (the LLC Act) often gives equal management and equal profit splits regardless of capital contribution — which is rarely what founders intended.

See /llc-operating-agreement-cost for tier-by-tier comparison.

6. Publication and licensing — the hidden state-specific costs

Three states require newspaper publication of formation notice:

• New York — $1,200-$2,000 in Manhattan, $200-$500 upstate. dos.ny.gov publication FAQ.
• Arizona — $30-$300, exempt in Maricopa and Pima counties.
• Nebraska — $40-$200.

Plus, almost every city or county requires a business license for any business operating there: $25-$500/yr. Plus, sales tax permits (free or under $50) in any state where you have nexus and sell taxable goods. Plus, workers’ compensation insurance in 49 states (Texas is the exception).

For the full hidden-cost stack, see /hidden-llc-costs.

DIY vs formation service: real cost comparison

The “$0 LLC formation” pitch from ZenBusiness, Bizee, LegalZoom, and others is technically real for the formation step itself — the headline price is $0 plus the state filing fee. The recurring revenue is the registered agent service that auto-renews after a free or discounted first year.

The DIY path is genuinely the cheapest. Formation services add convenience (form-filling, document storage, customer support) at $200-$1,400 in 5-year cost. Whether that’s worth it depends on the founder’s comfort with the SOS form and willingness to be their own RA.

For real pricing comparison, see /llc-formation-services-cost.

Year one vs ongoing cost

Year-one cost is misleading because it includes one-time items (filing fee, operating agreement). Ongoing cost — the recurring annual outflow — is what matters for 5-year total of ownership.

Cheapest 5-year total of ownership (DIY, no add-ons):

• Mississippi / Missouri / New Mexico / Ohio: $50-$99
• Montana: $115
• South Carolina: $110
• Pennsylvania: $160 (filing + decennial amortized)
• Wyoming (DIY no RA, possible only for residents): $340

Most expensive 5-year total of ownership:

• California: $4,070
• Massachusetts: $3,000
• Nevada: $1,825
• Tennessee: $1,500+
• Maryland: $1,300
• Delaware: $1,290

The 80x range between cheapest and most expensive is largely driven by state franchise tax policy. California’s $800/yr franchise tax alone outweighs the entire 5-year cost of any non-franchise-tax state.

How states compare on cost

The state-by-state hub details every jurisdiction, but the key clusters:

• Sub-$200 5-year cluster — MS, MO, NM, OH, MT, KY, HI, NE, UT, SC. These are the absolute-cheapest LLC states for ongoing ownership.
• $200-$500 5-year cluster — most states. AZ, CO, IN, IA, MI, KS, OR, VA, WY, FL.
• $500-$1,000 5-year cluster — IL, MA-not, NY (depending on county), AL, ME.
• $1,000+ 5-year cluster — CA, MA, NV, TN, MD, DE, NC.

Pick your formation state based on where you operate (nexus drives tax exposure regardless of formation state), not based on the cheap-state pitch. Forming in Wyoming to avoid California’s $800 franchise tax doesn’t work if you have CA nexus.

When formation services are worth it

The pitch from ZenBusiness, LegalZoom, Northwest, Bizee, and Tailor Brands is convenience. Whether it’s worth $200-$1,400 over 5 years depends on:

• First-time founder anxiety — a service holds your hand through the first filing. Worth it for founders intimidated by the SOS form.
• Lack of physical address in the formation state — you need an RA service. Northwest at $125/yr is the budget pick.
• Multi-state operations — services with compliance dashboards reduce missed deadlines across states.
• Time-cost trade-off — if your hourly rate is $200+, spending 4 hours filing yourself costs more than the service fee.

Skip formation services if:

• You’re DIY-comfortable with online forms.
• You live in the formation state and can be your own RA.
• You only operate in one state.
• The $200-$600/year savings matter to you.

Frequently asked questions

How much does it cost to start an LLC?

In year one: $35 (Montana DIY no add-ons) to ~$2,200 (NY with Manhattan publication + RA + attorney OA). Most founders pay $200-$600 in year one. The state filing fee is the only unavoidable cost; everything else is optional or state-specific. Source: each state’s Secretary of State, last verified 2026-04-25.

What’s the cheapest state to form an LLC?

By 5-year total cost: Mississippi, Missouri, New Mexico, and Ohio tie at $50-$99 (filing fee only, $0 ongoing). The catch: filing-fee math only matters if you live and operate in that state. Forming Mississippi from California costs MORE because California’s $800 franchise tax still applies via foreign qualification.

Is an EIN free?

Yes — directly from the IRS. Apply at irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. Online application takes 5 minutes; the EIN is issued instantly during IRS hours. Services charge $50-$99 to do this for you — pure markup. The only legitimate paid-EIN case is non-US residents without an SSN/ITIN.

Do I need a registered agent?

Yes. Every state requires the LLC to maintain a registered agent with a physical street address in the formation state, available during business hours. You can be your own RA at $0 if you live in the state and accept your home address being public record. Otherwise, hire a service ($50-$249/yr).

How long does LLC formation take?

Online filing in most states: same-day to 7 business days. Florida and Wyoming online: 24-48 hours. California: 7-10 days standard, 24 hours expedite ($350-$750). Massachusetts: 5-7 days. New York: 7-14 days, no online option for LLCs (mail/walk-in only). Each state’s processing time is on its SOS website.

Do I need a lawyer to form an LLC?

No. State SOS forms are designed for non-lawyer use. For a single-member LLC with no investors, DIY via the state’s online portal is straightforward. Attorneys add value for multi-member LLCs with profit/loss allocations, regulated industries, or complex multi-state operations. Cost: $400-$1,500 for attorney-formed.

What’s the difference between filing fee and annual report fee?

The filing fee is one-time at formation ($35-$500). The annual report fee is recurring ($0-$500/yr) and keeps the LLC in good standing. Most states have both. Some states (Arizona, Missouri, New Mexico, Ohio, South Carolina, Mississippi, Texas-under-threshold) have $0 annual report — these are the cheapest states for long-term LLC ownership.

Are LLC fees tax-deductible?

Yes. State filing fees, annual report fees, and franchise taxes are ordinary and necessary business expenses, deductible on Schedule C, Form 1065, or Form 1120-S. Source: IRS Publication 535 Business Expenses.

Sources

1. IRS Limited Liability Company (LLC) overview — last verified 2026-04-25
2. IRS Apply for an Employer Identification Number Online — last verified 2026-04-25
3. IRS Publication 535 Business Expenses — last verified 2026-04-25
4. California Franchise Tax Board LLC guidance — last verified 2026-04-25
5. Delaware Division of Corporations Fees — last verified 2026-04-25
6. American Bar Association Section of Business Law — last verified 2026-04-25
7. Northwest Registered Agent Services — last verified 2026-04-25

About the author

Aissam Baidi is the founder and researcher behind llcformationcost.com. He compiles the 51-jurisdiction LLC fee dataset directly from each state’s Secretary of State website and IRS publications, refreshing the data quarterly. Connect on LinkedIn.

Not legal advice. Estimates based on publicly available data from each state’s Secretary of State office. Consult a licensed attorney in your jurisdiction.