A lot of people get surprised when they find out how much an LLC actually costs. Here’s the breakdown so you know what you’re really paying for.
State Filing Fees
Every state charges a fee to register an LLC. It can be as low as 40 dollars in Kentucky or as high as 500 dollars in Massachusetts. Most states are in the 100 to 300 dollar range.
Service Fees
If you don’t want to file directly with the state, you can use a company that guides you through it. Common options are LegalZoom, Genie LLC, and Tailor Brands. They all add a service fee on top of the state filing fee.
Upsells and Traps
Many services advertise a “0 dollar LLC” but then hit you with 200 to 400 dollars in add-ons. Things like registered agents, operating agreements, or EINs often get sold separately. Some are optional, others are required to actually run your business.
So What Do You Actually Pay
Filing directly with the state means you only pay the state fee. Using a service means the state fee plus a service fee, usually somewhere between 49 and 300 dollars. If you don’t watch out for upsells, your “cheap” LLC can suddenly cost 500 dollars or more.
Bottom line
Know your state’s filing fee, decide if you want to file yourself or pay a service, and avoid unnecessary upsells. That’s the real cost of forming an LLC in the US.
The Real Cost of Forming an LLC in the US
byu/Nachoag7 inEntrepreneur
Posted by Nachoag7
3 Comments
You make some good points. I always file it myself with the state and get my EIN papers. Then I pay a registered agent to switch it to their info if someone goes to SOS website. That usually costs between $49-99(depending on state and agent). I have found this to be the cheapest, easiest and best option for me. But until I looked into it and did it a couple of different ways, it always cost more than I expected. Now I pay just the state fee and then registered agent fee to file change of registration forms. But you also have to check because some RA’s have fees for more than say three pieces of mail or other “hidden” fees if you don’t thoroughly vet them. I have found that if I look I can find an agent that doesn’t charge these extra fees typically.
I feel like posts like this are shared by folks who have never run into any issues in their business. I just finished helping a client deal with a lazy Member that was not holding up her end of the bargain. It was dragging the business down. My client was quickly burning out picking up the slack while simultaneously dealing with complaints from her employees stemming from the few times they did have to work with the other partner. Problem was, they didn’t want to spend money to set the LLC up for success on the front end so they ordered a cheap Operating Agreement from LegalZoom. It was garbage. It didn’t address what conditions would permit the other to force a sale of the other’s membership interests. It didn’t address what price would be paid for the membership interests. Whether the purchase price had to all be paid up front or spread out over several installments. Everything had to be negotiated and the problem with that was that the relationship had deteriorated to a point where neither side felt like playing nice. Legal fees to deal with that was yikes, and all could have been avoided had they simply opted to pay for the “add on” 🙄 on the front end.
On top of that, partnerships with good Operating Agreements tend to work better because both parties know exactly what they’re getting into, what to expect, and what is expected of them. Good contracts lead to good relationships. Maintaining good relationships keeps business costs low because legal disputes get real very expensive very quickly.
Thank you for coming to my Ted Talk.
Thanks ChatGPT