Creating a Limited Liability Company (LLC) is one of the most popular business structures in the United States as it offers a unique combination of flexibility, personal liability protection, and simpler operational setup compared to a corporation.
Nonetheless, the overall cost of setting up an LLC and subsequently maintaining it differs according to the state, the service providers, and the individual business requirements.
For efficient budgeting with no unexpected expenses, this article details all the potential cost to start an LLC in 2025.
1. State Filing Fees (Mandatory, One-Time)
Every business entity proposed by law requires a fixed initial investment before commencement, and in the case of an LLC starting it is the State Filing Fee, which ranges from $35 in Montana to around $500 in Massachusetts.
This fee is a one-off payment made to the state government by an entrepreneur in the initial stage of business formation as part of registering a business in his/her name.
📍 Cost Range:
- Low end: $35 (Montana)
- High end: $500 (Massachusetts)
- National average: ~$130 – $132
📝 Notes:
- Every state sets its own fee, and the amount does not necessarily reflect the quality of service received or one’s expected speed of processing.
- Additional fees of $25-100 may also be added due to rushed filing requests in certain states called expedited processing.
- Regardless of whether an LLC application is rejected, later decisions by an applicant to alter the primary offered structures of an LLC, alongside universally accepted foundational assumptions, lead to irrevocable final expenditures.
If you were to start an LLC in Kentucky instead of Texas, you’d pay $300 in Texas and only $40 in Kentucky. This demonstrates how the state you form your LLC in can impact your costs significantly.
2. Annual/Biennial Report Fees (Mandatory, Recurring)
Most states have an ongoing compliance requirement where an LLC has to file annual or biennial reports to maintain good standing as a business entity. Reports minimally confirm information such as the business address, members, or registered agent.
💵 Cost Range:
- Low end: $0 (e.g., Arizona, Ohio)
- High end: $800 (California franchise tax)
- Typical range: $20–200 annually
💡 Things to Know:
- There could be a late filing penalty.
- Some jurisdictions will suspend or dissolve your LLC for non-compliance.
- Nevada needs both a business license and an annual report which increases your cost.
These repetitive and recurring expenses, just like initial filing fees, are vital to maintaining your LLC and if overlooked, may mean penalties or loss of status.
3. Registered Agent Fees
A registered agent is an individual or service that must receive official correspondence like mail, legal notices, and other business-related correspondence intended for the LLC. Every LLC is legally mandated to have a registered agent. Although, it is possible to be one’s own registered agent, a lot of business owners prefer hiring professionals.
💵 Cost Range:
- $0 (If you opt to be your own agent)
- $200-$300 each year for professional services
✅ Reasons for paying for a registered agent:
- Prevents your private address from appearing in public databases.
- Provides assurances in the legal handling of mail and monitoring legal compliance.
- Enables flexible working hours. No need to be available during standard business hours 9 am-5 pm.
- Useful for in-state or out-of state residents who conduct business in multiple states or those living abroad.
There is often other mail sent that professionals handle, and they take care of compliance alerts, document storage, and mail forwarding, making these services smart investments for many entrepreneurs.
4. Optional Startup Costs and Add-Ons
Other than state filing fees, compliance costs, and additional optional incurred fees may be encountered depending on the business structure and who assists you.
📌 Name Reservation:
- A few states grant the right to individuals seeking to file an LLC permit to block allocation of the company name in advance.
- Cost: $10-$50
- Advantages: Makes sure the selected are ready for the document drafting process.
📄 Operating Agreement:
- The document formalizing the framework, responsibilities, and governing principles for your LLC.
- Cost: $0 for DIY or $50-$300+ if you hire someone.
- Not legally required but all too often advisable, including for single-member LLCs.
🆔 EIN (Employer Identification Number):
- Needed by the IRS for tax reporting and when opening bank accounts.
- Cost: Obtaining through IRS.gov is free.
- Service fees: Formation companies charge $50-$100.
⚖️ Legal or Formation Service:
- Companies such as LegalZoom, ZenBusiness, Bizstartz, and Incfile can file on your behalf.
- Cost Range: $0-$350, not including state fees.
- Filing, operating agreements, and EINs as well as compliance alerts and other services may be offered.
- Some give out registered agent services free for the first year.
🧑⚖️ Attorney Help:
- A small business attorney can assist with custom legal recommendations or contracts.
- Cost Range: $1,000-$2,500+, depending on the complexity of work and where the work is done.
5. Business Licenses And Permits
You may need local or state business licenses to complement your LLC depending on the industry and their location. A restaurant or contractor or even a daycare may, for example, need extra permits.
💵 Cost Range:
- $50-$500+, based on industry and location.
- Recurring license renewal and inspections may be needed for some industries.
Note: Forming an LLC does not in itself guarantee that you have the right to operate. Check with your local city or county government for local licensing requirements.
6. Publication Requirement (State-Specific)
LLCs currently forming in Arizona and Nebraska remain as the only states to still require the publication of a legal notice in local newspapers.
🧾 Typical Cost:
- Between $30-150 dependent on the newspaper and county fees.
This may not be one of the most well known costs, however, it is a cost that must be taken into account if you are forming in one of the states that requires this. Other services can take care of this requirement for you.
7. Typical Cost Scenarios for Year 1
Different methods of forming an LLC incur differing costs.
| Type of LLC Formation | Estimated Year 1 Cost |
| DIY Only | $130–$300 |
| DIY + Registered Agent + Licenses | $300–$600 |
| Professional Formation + Registered Agent | $500–$900 |
| Full Legal/Attorney Assistance | $1,000–$2,500+ |
These estimates have been provided alongside a full legal, first year of compliance, operating agreement, and EIN.
8. Annual Costs Starting Year 2
The completion of the formation of an LLC marks the beginning of perpetual and recurrent fines for a company who’s strive for absolute compliance has been non stop.
Expected Annual Costs:
As dictated by the regulations of whichever state the LLC first registers:
- Annual report/biennial fee: $20-$800 depending on the state.
- Registered agent (if applicable): $100-300/yr.
- Business licenses renewal: $50–$200 depending on locality.
- Franchise taxes (such as in CA, DE, NY): Varies, can be significant.
Just as important are recurring costs that put the LLC out of compliance.
9. Best & Worst States for LLC Formation (Cost-Wise)
🟢 Low-Cost States:
- Montana: $35 filing and $0 annual report
- Kentucky: $40 filing and $15 annual report
- Arizona: $50 filing with no annual report
These states are favorable to entrepreneurs focused on decreasing initial and ongoing expenses.
🔴 High-Cost States:
- California: $70 filing plus $20 biennial and $800 franchise tax
- Massachusetts: $500 filing and $500 annual report
- Illinois: $150 filing, $75 annual report, and other fees
These states tend to be the most logical for local businesses but less so for remote entrepreneurs.
10. Cost-Saving Tips
DIY: File directly with the Secretary of State’s office and skip formation service fees.
Act as your own registered agent: Saves $100 to $300 per year, provided availability is maintained and an address is publicly listed.
Compare formation companies: Some charge as little as $0 + state fees (e.g., IncFile or Bizstartz).
Do not pay for additional services: Skip things like LLC seals and deluxe binders for documents unless absolutely essential.
Protect yourself: Ensure to pay the annual payment on time to avoid late fees or higher grievance costs.
✅ Conclusion: What Should You Budget?
| Expense Type | Estimated Cost Range |
| Filing fee (one-time) | $35–$500 |
| Registered agent (optional) | $0–$300/year |
| Annual report | $0–$800/year |
| EIN (IRS) | Free (or $50–$100 via service) |
| Legal help (if needed) | $1,000–$2,500 |
| Formation service (optional) | $0–$350+ |
| Licenses & permits | $50–$500+ |
Total first-year costs:
- Basic DIY: ~$130–$300
- Standard LLC with some services: $300–$900
- Full-service legal route: $1,000–$2,500+
If you’re considering completing your LLC in 2025, our prices are unmatched. Bizstartz completes your LLC formation with fast processing, expert assistance, and ancillary services all in one location like EIN procuring, BOI filings, and Acting as a Registered Agent.
👉 Contact us today so we can schedule your free consultation and get the ball rolling!
