LLC formation costs vary significantly by state — from $35 in Montana to $500+ in Massachusetts. Beyond the initial filing fee, ongoing annual costs (annual reports, registered agent fees, franchise taxes) matter just as much for long-term planning. This tool shows total first-year and ongoing annual costs for every state so you can make an informed decision. Educational purposes only, not legal advice.
*Includes $100 estimated registered agent service. Actual costs vary. Verify current fees at your state's Secretary of State website.
All States Comparison
| State | Filing Fee | Annual Report | 1st Year Total | Ongoing/yr |
|---|
Fees as of 2024/2025. All totals include estimated $100/year registered agent service. Verify current fees at each state's Secretary of State website before filing. Some states have additional taxes (CA: $800/yr minimum franchise tax).
How to Choose the Right State to Form Your LLC
The state you form your LLC in affects filing fees, annual costs, privacy protections, and legal frameworks. While Delaware and Wyoming get outsized attention, the right choice depends heavily on where your business actually operates.
Rule 1: Form in Your Home State If You Operate There
If your business operates in one state, forming there is usually simplest and cheapest. Forming in Delaware or Wyoming but operating in California means paying: Delaware/Wyoming fees + California foreign LLC registration ($70) + California $800/year minimum franchise tax. The "tax haven state" strategy adds complexity without benefit for most small businesses.
Rule 2: Consider Delaware or Wyoming for Investor-Facing LLCs
Delaware's Court of Chancery (business-specialized court) and established LLC law make it preferred for investor-backed companies and those planning eventual conversion to a corporation. Wyoming's complete anonymity provisions (no public member names) make it popular for privacy-focused businesses. Nevada is marketed similarly but has higher fees than Wyoming for the same protections.
Rule 3: Watch for Hidden Annual Costs
California's $800/year minimum franchise tax applies to all LLCs with California activities, regardless of where formed. Massachusetts charges $500/year. Tennessee's annual tax is based on member count. Look beyond the one-time filing fee and calculate the 5-year total cost (filing + 5 annual reports + registered agent fees).
Rule 4: Filing Process
File Articles of Organization with the Secretary of State. Most states allow online filing. Required information: LLC name (must include "LLC" or "L.L.C."), registered agent with physical in-state address, principal business address, and management structure (member-managed vs manager-managed). Operating agreements are recommended but rarely required. Receive your filed Articles (certificate) within 1-5 business days for online filings.
FAQ
Is this LLC cost guide free?
Yes, completely free with no signup required. This tool is for educational purposes only and does not constitute legal advice. Consult a licensed attorney or business formation specialist for your specific situation.
What is the cheapest state to form an LLC?
Kentucky ($40), Montana ($35), New Mexico ($50), and Colorado ($50) have among the lowest formation fees. Arkansas ($45) and Iowa ($50) are also inexpensive. However, the cheapest formation state may not be the best choice if your business operates in a different state — you'd pay both that state's fees AND your home state's fees to register as a foreign LLC.
What is the most expensive state to form an LLC?
Massachusetts ($500), Tennessee ($300-$3,000 depending on members), and California ($70 filing + $800 minimum annual franchise tax) are among the most expensive. California's $800/year minimum tax makes it expensive for small businesses even with a low filing fee.
Should I form my LLC in Delaware or Wyoming?
Delaware and Wyoming are popular for their business-friendly laws, privacy (Wyoming allows anonymous LLCs), and no state corporate income tax. However, if your LLC does business in your home state, you'll need to register as a foreign LLC there too, paying both states' fees. For most small businesses operating in one state, forming in your home state is simpler and cheaper.
What is a registered agent and why is it required?
A registered agent is a person or company that receives official legal documents (lawsuits, state notices) on behalf of your LLC during business hours. Every LLC must have one. You can be your own registered agent (free) if you have a physical address in the state and are available during business hours. Professional registered agent services cost $50-$300/year and provide privacy and reliability.
What are LLC annual report fees?
Most states require LLCs to file an annual or biennial report confirming business information, with a fee. These range from $0 (Ohio, New Mexico — no annual report required) to $500+ (Massachusetts, Nevada). Not filing can result in penalties or administrative dissolution of your LLC. Mark your calendar for the due date.