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Last updated October 26, 2021

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How Much Does it Cost to Setup an LLC?

How much does it cost to setup an LLC?

Here is a breakdown of the costs to forming an LLC:

1. Will you do-it-yourself (DIY), hire a lawyer, use an online incorporation website, or go through our free online course?

If you form your LLC yourself, you will just pay the state filing fees (see below for a list of all 50 states’ filing fees).

If you hire a lawyer, it will cost you between $1,000 and $1,500.

If you use an online incorporation website, it will cost you anywhere between $99 and $900 (note: if you pay just $99, you’ll need to pay extra for your Operating Agreement and Federal Tax ID Number aka EIN)

If you go through our free online course, it won’t cost you anything.

Regardless of which method you choose to form an LLC, you will still have to pay state filing fees.

LLC state filing fees range between $40 and $500. As of 2020, the average filing fee for an LLC in the United States is $132.

For a list of LLC state filing fees, please click here: LLC filing fees by state.

Beside the state’s filing fees, there are other costs to consider when setting up your LLC.

Need help with your LLC? Have a professional LLC service file for you:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

2. Do you need to hire a Registered Agent?

The Registered Agent is a person or company who agrees to accept Service of Process on behalf of your LLC.

Service of Process is delivery of any legal documents pertaining to a lawsuit, such as a subpoena.

If you have a street address located in the state where you are forming your LLC, then you can be your LLC’s Registered Agent. A friend or family member can also be your LLC’s Registered Agent, so long as they also have a street address located in the state where you are forming an LLC.

If you don’t have a street address located in the state where you are forming your LLC then you will need to hire a Commercial Registered Agent. Fees range $100 to $300 per year.

It doesn’t matter if you DIY, hire a lawyer, use an online incorporation website, or go through our 30-minute online course…

You have the same options as mentioned above.

Be careful though!

Most online incorporation websites force you into hiring them as your Registered Agent, and then they auto-charge you each year. This is why some sites appear to charge less to help you setup your LLC. They don’t tell you that you can be your own registered agent.

Please read the fine print at the bottom of their pricing pages.

Also, your lawyer may unnecessarily talk you into hiring them as your Registered Agent (for a yearly fee)… even if you can be your own Registered Agent.

This hidden fee, forced Registered Agent crap rubs us the wrong way.  We don’t think it is right to take advantage of people who are asking for your help.

To get the full scope, check out our video here: Registered Agent Industry Exposed.

Most of our customers designate themselves as their LLC’s Registered Agent (if they have a street address in the state where they are forming an LLC).

If you don’t have a street address in the state where you are forming an LLC (or prefer privacy), we recommend hiring Northwest Registered Agent ($125 per year).

Northwest Registered Agent has been in the business for over 20 years and they have great customer service. They will scan any mail that is sent to your LLC and upload it to your online account.

3. Do you need to pay for an Operating Agreement or are you getting one for free?

Depending on how you form your LLC, your Operating Agreement will either cost money or be included in your package.

If you DIY, you will most likely need to purchase an Operating Agreement online. Fees range $50 to $200. You may also be able to find one for free online. Just remember, bigger is not always better.  Your Operating Agreement should be clear and concise.  Less fluff, more substance.

If you hire a lawyer, this will most likely be part of the package deal, unless your business is very complex or requires special agreements among the LLC members. Fees range $0 – $500.

If you use an online incorporation website, it’ll either be included (if you purchase a mid-level or high-end package), or you will need to pay extra. Fees range $50 to $100.

If you follow our free free guides, though we provide a 6-page Operating Agreement and teach you how to fill it out. (see here)

4. Federal Tax ID Number (EIN)

You will need to obtain a Federal Tax ID Number (EIN) in order to open your business bank accounts.

Your EIN will also be used for filing taxes, obtaining finances, and getting credit cards to name a few.

Obtaining a Federal Tax ID Number is a free service provided by the IRS.

(Make sure you wait until your LLC is approved before obtaining your Federal Tax ID Number. If you’ve already obtained an EIN from the IRS before forming your LLC, then you did it incorrectly. That EIN is not attached to your LLC and it is attached to you personally, as a Sole Proprietorship. Click here to learn how to cancel your incorrect EIN: close an account with the IRS.)

Okay, back to the costs…

If you DIY, your EIN will be free from the IRS (unless you get ripped off by some bogus website).

If you hire a lawyer, this should be included in their fees. Some will charge extra, though. Fees could be $50 to $100 depending on their hourly rate.

If you use an online incorporation website, it’ll either be included (if you purchase a mid-level or high-end package), or you will need to pay extra. Fees range $50 to $100.

Or, you can get your LLC’s EIN yourself for free at the IRS’s site and follow our video instructions. Just make sure to do this only after your LLC has been approved by the Secretary of State.

5. Does your state have Annual LLC fees?

Most states have an annual LLC fee as a requirement in order to keep your LLC in good standing. If you do not pay your annual LLC fee on time, your state may dissolve and shut down your LLC.

Annual fees range from $0 to $800, with the average LLC annual fee coming out to $91 (annualized).

For a full list of all 50 states and their annual LLC fees, click here: LLC annual fees by state.

Costs to Forming Your LLC:

 DIYLawyerOnline Incorp. WebsiteOur Course  
Cost of Service$0$1,000 - $1,500$99 - $900$0
State Feesvaries by state (see table)varies by state (see table)varies by state (see table)varies by state (see table)
Registered Agent$0 - $125/year$200 - $500/year$100 - $300/year$0 - $125/year
Operating Agreement$0 - $200$0 - $500$50 - $100$0
EIN$0 - $100$50 - $100$50 - $100$0
Annual Reportvaries by statevaries by statevaries by statevaries by state
TOTAL
(exc. State fees, RA, + AR)
$0$1,050 - $2,100$199 - $1,100$0

Let’s Talk About Crap Fees and Unnecessary Items

We get quite pissed off at our contemporaries when we see them stuffing crap fees into their LLC packages and adding unnecessary items.

Drumroll please…

1. Researching Your LLC Name

There are no costs for researching your desired LLC name. You can do this for free on your State’s website.

2. Forced Registered Agent Fees & Forced Annual Renewals

Again, please check the fine print on any website’s pricing page to make sure that you are not forced into using them unnecessarily as your LLC’s Registered Agent and paying hidden annual fees.

3. LLC Kit & Seal

This is just a binder and seal that you don’t need. Most websites make this sound like a “legal requirement”, but it’s not at all. If you really want to be “scrapbook fancy”, you can head to Staples and make your own.

4. Certified Copies

90% of the time, you won’t need this. And if you do, you can order them directly from your state yourself. Just google “secretary of state [state name] phone number”, call, and they’ll tell you what is needed. Fees for Certified Copies are usually just a few dollars. You also don’t need to decide right away. These can be ordered at any time.

5. Overnight Shipping/Rush Filing

Usually unnecessary and just leverages the fact that we are irrational humans. If we could hear ourselves think: “Even though I waited 17 months to finally form my LLC, yes, I absolutely need my LLC documents next day!” Calm your horses, Charlie. Unless you absolutely need your LLC formed right away (investment property goes to settlement in 1 week), save yourself some money. Plus, most times the “rush filing” is just “rush processing”.  This means they move your request to the top of the list, so it gets handled as a priority- but does not mean that it will actually get formed any faster – especially if there are any issues with your documents.

6. Free Trials to Anything

Most of the free trials are crap you don’t need, but they’re marketed well. They are all affiliate offers (the company you go through makes commission) and even if they say “Free trial”, don’t kid yourself. You’ll end up paying monthly or annual fees for things that are usually just a distraction.

If you really need the services they are giving you a “free trial” for, you’re better off purchasing them directly from the actually company.

Remember, “there is no such thing as a free lunch”. There is always a catch.

7. LLC Membership Certificates

Again, more fancy-looking crap you don’t need. If your ego really wants to put a plaque on the wall showing you own 100% of your new company, knock your socks off. But just so you know, most LLC’s membership interest is spelled out inside the Operating Agreement, which is a binding contract.

And, if you really want LLC Membership Certificates, our friends over at Northwest Registered Agent give them away for free: LLC Membership Certificates from NWRA.

8. Free Domain Name, Phone Number, Logo, Website, etc.

These are all highly marked up affiliate offers. Instead, follow the resources we use ourselves and have listed below.

Domain names: NameSilo.com ($10 per year) – and they include free privacy.

Business/800 Phone Number: I recommend Phone.com

Logo: Check out Fiverr for cheap stuff. Check out 99designs for more high-end logos.

Website: If you are not technical at all, check out SquareSpace. If you’re more “tech-comfortable”, purchase hosting from SiteGround, install WordPress, and purchase a premium theme from ThemeForest.

9. I’m sure there’s more

I’m sure there are more hidden fees, but that’s all I can think of for now. Keep an eye out for hidden fees and crap you don’t need. Forming your LLC shouldn’t be this hard, geez!

Video Transcript:

Hey folks. Matt Horwitz, llcuniversity.com. I hope you’re doing well. Let’s talk about how much it costs to actually set up your LLC. You have four ways you can go about doing it, which will dictate your cost. You can DIY, do it yourself. You can hire a lawyer. You can use an online incorporation website, or you can go through our thirty minute online course.

No matter which route you take, you’ll still need to pay your state filing fees as well as any annual renewal or annual report fees. You can find details on both of those either below this video if you’re on our website, or if you’re on YouTube or somewhere else, there’s a link below this video which will take you to all the information, all the details.

On top of the state filing fees and the service fees, you need to consider whether or not you need to hire a commercial registered agent for your LLC or you or a family member will be your LLC’s registered agent. Most websites will trick you into hiring them as your registered agent. However, it’s not needed if you or someone you know has a street address located in the state where you’re forming an LLC.

If you don’t have a street address located in the state where you’re forming your LLC, you will need to hire a commercial registered agent. Those fees range about one hundred to three hundred dollars per year. Also depending on how you form your LLC, you may or may not need to pay for an operating agreement. You certainly do need an operating agreement. Sometimes it’s free, other times there’s a cost and that fee is usually fifty to one hundred dollars.

Next is your federal tax ID number, also known as your EIN or Employer Identification Number. This is a free service provided by the IRS. No matter which route you go or which website you go through, you shouldn’t be paying any extra for this. Again, full details are on the post and the article on our website.

Those are the basic fees for forming your LLC. Just in this format here in this video I can’t go through and tell you the filing fee on every single state. However, again click through you’ll find all those details. You’re either going to do it yourself or you’re going to hire someone to do it for you or hire someone to teach you how to do it.

Then you’re going to pay your state filing fees as well as your annual renewal fees. You may need to pay extra for an operating agreement, a federal tax ID number, and a commercial registered agent if you or a friend or a family member are not going to be your LLC’s registered agent. Again, those are the base fees.

Now, some websites do charge for a bunch of other crap. I’m going to expose all that and tell you that now. Just make sure you keep an eye out for this stuff and make sure if you’re checking out or using another website, or no matter who you’re going through, make sure you’re getting what you actually need and not extra bogus stuff that’s just being upsold to you for no reason.

The first is researching your desired LLC name. This is completely free. You can do it on your state’s website. We can do it for you. It’s simple. You can do it yourself if you just do a Google search. Again, full details on our post on the website.

Second thing to look out for is forced registered agent fees as well as hidden annual renewals. Make sure to check the fine print on any website’s pricing page to see whether or not you’re being charged those fees. Next is an LLC kit and seal, which is just a fancy binder and a seal that you don’t really need.

Next is certified copies, which are usually paid three, four, five X what they actually do cost. You do not need to order certified copies when you’re forming your LLC. Ninety percent of the time you won’t even need it. If you do need it later on, you can just contact your state. It will only cost you a few dollars.

Overnight shipping and rush delivery, just save yourself the money. Be patient. You don’t need it unless you’re forming an LLC for real estate and you have settlement in one week or some other crazy business scenario. Most of the time you do not need to pay rush delivery.

The next is free trials. Make sure to be very careful about these. Most of these are just affiliate offers promoting things you may or may not need. Just keep an eye out for that. The next is LLC membership certificates. You don’t need these. The members interest is dictated and spelled out inside of the operating agreement. The membership certificates are just fancy looking things. If you actually do want one, we have a link where you can get them for free.

Next is free domain name, business phone number, website, any other services. Again, those are all just affiliate offers. They’re promotions. Most of the time you don’t need them. Be careful.

I’m sure there’s more crap fees than this, so just make sure you really check out the fine print no matter which website or service you use to get your LLC formed. Make sure you fully understand all of the fees and realize that there’s really just a core group of things that you need to get done to form your LLC. Most of it is just upsells and crap and things that you don’t need.

Yeah, it rubs me the wrong way that I see a lot of websites taking advantage of people for just a bunch of crap. They spend hundreds of dollars on things that really do not help drive their business or move their business forward.

Hope this video was helpful for you. Again, for full details check out the link around this video or if you’re on our website, just check it out below. If you have any questions, do let us know. Thank you so much for your time. Take care.

Matt Horwitz
Matt Horwitz
Founder & Educator, LLC University®
Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
 
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.