How Much Does It Cost to Form a Limited Liability Company?

By William Pirraglia

The costs to form an LLC (limited liability company) typically arise from one or two sources. Since LLCs are authorized by individual U.S. states, not the federal government, filing and registration fees can vary. Be assured, however, all states require registration fees, regardless of the name used for these charges. The second source of cost is the charge for others to advise you and prepare filing documents.

Filing and Registration Fees

Typical state filing fees fall in the $100 to $250 range. However, a few states charge less (e.g., Iowa, $55) and some charge more (e.g., Illinois, $675) to register LLCs. Most states require filing fees that are similar for both LLCs and corporations for fairness and simplification reasons. These fees are usually required at the time you file your articles of organization, which contains the name and address of your new LLC and your registered agent.

Document Preparation and Filing Costs

If you are not an attorney, accountant or experienced entrepreneur, you might want to have someone prepare your articles of organization and file for your LLC with your state. Charges for this service will vary, but always ask about the fee before you commit to anyone but a trusted adviser. There are other do-it-yourself options, which are extremely cost effective and offer you the forms, knowledge and assistance you need to file for your new LLC.

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Other Costs to Consider

Costs to form an LLC are usually reasonable. However, you should plan for maintenance costs after you form your new company. Renewal fees are typically as reasonable as filing fees. But, some states charge considerably more for annual renewal fees. For example, some states, e.g., California, impose annual fees that must be considered. Filing for an LLC in California only costs $90, but an automatic "tax" of $800 is due annually. Although called a "tax," this fee is really just a charge for the "privilege" of operating as an LLC in California.

Additional Filing Costs

Some states have a "publication" requirement that will come with a cost. Some states require you to publish your intention to create a new LLC in local newspapers. Five or six states impose the fee for you. For example, Arizona includes a publishing cost of $75 in addition to its $170 LLC filing fee. Those states that require publishing your intent usually make it your responsibility to "remind" them, via an affidavit of publication, that you fulfilled this requirement. Your local newspaper can help you satisfy this necessity, proving that, at your expense, you met this requirement.

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The Cost of Forming an LLC

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What Does it Cost to Form a Delaware LLC?

Delaware’s favorable legal environment for companies makes it an attractive place for businesses to register in. Limited liability companies, or LLCs, formed in the state pay fees ranging from basic filing to licensing fees. The complete schedule of fees for registering a business entity in Delaware is available online at the state’s Division of Corporations website. All fees cited are valid as of December 2010.

What Does It Cost to Set Up an LLC in the State of Illinois?

Setting up an LLC or limited liability company in Illinois includes both mandatory and optional costs. The mandatory costs are primarily in the form of governmental fees that must be paid to file the required state forms to legally create an LLC. Optional costs generally include fees for professional services, such as for an attorney or accountant, or service fees charged by a private company that assists with filing the state-required LLC forms.

Advantages of Filing for a DBA

Filing for a DBA is the easiest type of business registration. The acronym "DBA" is short for "doing business as" and is generally used when referring to any type of fictitious name, assumed name or trade name for your business. Filing for a DBA is most advantageous when you are just starting your business, but as you become established you should consider the advantages offered by other forms of business registration.

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