Starting an LLC does not have to be expensive. In many states, the cheapest way to start an LLC is to file the formation paperwork yourself directly with the state and avoid unnecessary upsells or expensive legal packages. However, LLC filing fees vary dramatically from state to state. Some states charge less than $50 to form an LLC, while others charge several hundred dollars in filing fees, annual fees, or publication costs.
For entrepreneurs trying to keep startup costs low, it is important to understand not only the initial filing fee, but also the ongoing costs associated with maintaining an LLC. Some states have low formation fees but high annual franchise taxes, while others have higher upfront costs but lower long-term maintenance expenses.
| LLC + Registered Agent Service 1/yr | LLC + Registered Agent Service 1/yr |
| Northwest Registered Agent $39 + state fee | LegalZoom $249 + state fee |
This guide explains the cheapest way to start an LLC, compares LLC filing costs by state, and discusses ways entrepreneurs can save money while still forming a compliant business entity.
Cheapest Way to Start an LLC
For most entrepreneurs, the lowest-cost approach is usually:
- Choose your LLC name
- File the Articles of Organization directly with the state
- Serve as your own registered agent if allowed
- Obtain a free EIN from the IRS
- Create your own operating agreement
- Open a business bank account
This do-it-yourself approach may significantly reduce startup costs compared to purchasing premium formation packages.
However, many business owners still choose to use LLC formation services because they prefer:
- Convenience
- Privacy protection
- Registered agent services
- Compliance reminders
- Reduced paperwork stress
LLC Formation Costs by State
The table below shows approximate state LLC filing fees and highlights some of the lowest-cost states for forming an LLC.
| State | Approximate LLC Filing Fee | Notes |
|---|---|---|
| Alabama | $200 | Additional annual requirements |
| Alaska | $250 | Higher upfront filing fee |
| Arizona | $50 | Publication may be required |
| Arkansas | $45 | Annual franchise tax applies |
| California | $70 | Annual franchise tax may apply |
| Colorado | $50 | Low annual maintenance costs |
| Connecticut | $120 | Annual reporting fees |
| Delaware | $90 | Popular for corporations and LLCs |
| Florida | $125 | Popular business state |
| Georgia | $100 | Moderate ongoing fees |
| Hawaii | $50 | Annual reporting required |
| Idaho | $100 | Standard filing costs |
| Illinois | $150 | Higher startup costs |
| Indiana | $95 | Affordable annual reports |
| Iowa | $50 | Relatively affordable |
| Kansas | $160 | Online filing discounts possible |
| Kentucky | $40 | One of the cheaper states |
| Louisiana | $100 | Moderate compliance costs |
| Maine | $175 | Higher annual fees |
| Maryland | $100 | Annual personal property filing |
| Massachusetts | $500 | One of the highest annual costs |
| Michigan | $50 | Low filing fee |
| Minnesota | $135 | Online filing may cost less |
| Mississippi | $50 | Affordable startup costs |
| Missouri | $50 | Low filing costs |
| Montana | $35 | One of the cheapest states |
| Nebraska | $100 | Publication costs may apply |
| Nevada | $425+ | High startup and annual fees |
| New Hampshire | $100 | Annual reports required |
| New Jersey | $125 | Annual reporting fees |
| New Mexico | $50 | No annual report requirement |
| New York | $200 | Publication requirement can be expensive |
| North Carolina | $125 | Moderate annual costs |
| North Dakota | $135 | Annual reports required |
| Ohio | $99 | No annual franchise tax |
| Oklahoma | $100 | Annual certificate fee |
| Oregon | $100 | Annual renewal fees |
| Pennsylvania | $125 | Decent long-term affordability |
| Rhode Island | $150 | Annual reporting fees |
| South Carolina | $110 | Reasonable overall costs |
| South Dakota | $150 | Moderate annual fees |
| Tennessee | $300 minimum | Annual franchise taxes |
| Texas | $300 | No personal income tax |
| Utah | $54 | Affordable annual renewal |
| Vermont | $125 | Annual report fees |
| Virginia | $100 | Annual registration fee |
| Washington | $200 | Annual reporting costs |
| West Virginia | $100 | Annual report fees |
| Wisconsin | $130 | Online filing may cost less |
| Wyoming | $100 | Popular privacy state |
States With the Lowest LLC Filing Fees
Some states consistently rank among the cheapest places to form an LLC based on filing fees alone.
Montana
Montana often has one of the lowest LLC filing fees in the country. The state is attractive for entrepreneurs looking for low upfront costs.
Kentucky
Kentucky remains one of the most affordable states for basic LLC formation.
Mississippi
Mississippi offers relatively low LLC startup costs and simple filing procedures.
Colorado
Colorado combines low filing fees with relatively affordable annual maintenance requirements.
New Mexico
New Mexico is popular because of its low filing fee and lack of annual report requirements for LLCs.
States That Can Become Expensive Over Time
A low filing fee does not always mean low overall LLC costs.
Some states impose:
- Annual franchise taxes
- Mandatory annual reports
- Publication requirements
- Business privilege taxes
- Gross receipts taxes
California
California has relatively moderate formation costs but may impose annual franchise taxes and additional state fees.
New York
New York’s publication requirement can significantly increase startup costs depending on the county.
Massachusetts
Massachusetts has one of the highest annual LLC report fees in the country.
Nevada
Nevada markets itself as business-friendly, but total startup and annual LLC costs are often much higher than expected.
Cheapest DIY LLC Formation Method
Many entrepreneurs save money by filing directly through the Secretary of State website rather than using paid formation services.
Advantages of DIY Filing
- Lowest upfront cost
- Direct filing with the state
- Avoid upsells
- Full control over the process
Potential Downsides
- More paperwork responsibility
- No compliance reminders
- No registered agent privacy protection
- Greater chance of filing mistakes
For simple single-member LLCs, DIY filing is often manageable for many entrepreneurs.
Using LLC Formation Services to Save Time
Although DIY filing is the cheapest option, many business owners still choose formation companies because they simplify the process.
Popular LLC formation providers include:
Northwest Registered Agent
Known for privacy-focused services and strong customer support.
Bizee
Popular budget-friendly formation service for startups and side businesses.
ZenBusiness
Beginner-friendly platform with streamlined LLC setup tools.
LegalZoom
Large legal services platform offering LLC formation and ongoing legal support.
Harbor Compliance
Strong option for businesses operating in multiple states.
Ways to Reduce LLC Startup Costs
Entrepreneurs can often lower LLC formation costs by avoiding unnecessary extras.
Serve as Your Own Registered Agent
Many states allow LLC owners to act as their own registered agent. This can save annual registered agent fees, although it may reduce privacy.
Get Your EIN Directly From the IRS
An EIN can usually be obtained for free directly from the IRS website.
Create Your Own Operating Agreement
Many single-member LLC owners use simple operating agreement templates rather than paying for expensive legal packages.
Avoid Unnecessary Upsells
Some formation companies offer:
- Expedited filing
- Corporate kits
- Seals
- Website packages
- Banking add-ons
Some entrepreneurs may not need these extras initially.
Should You Form an LLC in Another State to Save Money?
Some business owners consider forming LLCs in states with lower fees or stronger privacy protections, such as Wyoming or New Mexico.
However, if you primarily operate in your home state, you may still need to:
- Register as a foreign LLC
- Pay fees in both states
- Maintain multiple registered agents
- File annual reports in multiple jurisdictions
In many cases, forming the LLC in your home state remains the simplest and cheapest option overall.
Final Thoughts
The cheapest way to start an LLC is usually to file directly with your state, act as your own registered agent if allowed, and avoid unnecessary add-on services. However, the total cost of maintaining an LLC depends heavily on the state where the business is formed.
Some states offer very low startup costs but impose higher annual fees later, while others remain relatively affordable long-term. Entrepreneurs should compare both formation fees and ongoing compliance costs before choosing where to form an LLC.
For business owners who value convenience, privacy, or compliance support, LLC formation services may still provide worthwhile value even if they cost more than a basic DIY filing approach.
