How Much Does It Cost to Start An LLC in 2026

In 2026, forming an LLC can cost anywhere from about $35 to $500 or more in state filing fees, depending on the state. But the amount you actually need to start and maintain an LLC can be higher once you include recurring state fees or taxes, business licenses, registered agent services, insurance, and other business expenses.

For example, Montana charges $35 to form a domestic LLC, while Massachusetts charges $500. California charges $70 to file its Articles of Organization, but California LLCs are generally also subject to an $800 annual tax. The California Franchise Tax Board provides the state's current LLC filing and tax requirements.

A useful way to think about the cost is:

• Formation cost: the fee your state charges to create the LLC
• First-year LLC cost: formation fee + required recurring state fees or taxes
• Actual business startup cost: LLC costs + licenses + insurance + equipment + software + other business expenses

The key point is that the cost to form an LLC is not necessarily the same as the cost to start or operate a business.

How Much Does It Cost to Start an LLC?

The first expense you'll usually encounter is the state formation fee.

When you create an LLC, you file a formation document with the state. Depending on the state, this may be called Articles of Organization, Certificate of Organization, or Certificate of Formation.

The filing fee varies significantly across the country. Some states charge only a few dozen dollars, while others charge several hundred dollars. Montana, for example, charges $35 for a domestic LLC filing, while Massachusetts charges $500.

But the formation fee answers only one question: How much does it cost to create the legal entity?

It doesn't necessarily answer: How much money do I need to start and maintain the business?

That's an important distinction when creating a startup budget.

A simple way to estimate your initial cost is:

Initial LLC cost = State formation fee + required startup costs

Then calculate recurring expenses separately:

Ongoing LLC cost = Recurring state fees/taxes + licenses + other recurring costs

This prevents you from treating a $50 filing fee as if it were the complete cost of starting a business.

LLC Formation Costs by State

The state where you form your LLC is one of the biggest factors affecting your initial cost.

The formation fee shown above refers to the basic state filing fee for forming a domestic LLC. Recurring costs and requirements may include annual or biennial reports, franchise taxes, business taxes, or other state filings. Fees and requirements can vary by filing method and may change, so the data should be verified against the latest official documents published by each state's Secretary of State or other relevant state agency before filing.

The cheapest formation fee isn't necessarily the cheapest LLC

Imagine two states.

State A charges $50 to form an LLC and has relatively low recurring costs.

State B charges $150 to form an LLC but has substantially higher recurring costs.

If you're looking only at the first day, State A appears cheaper. But if you plan to operate the business for five years, the initial $100 difference may become insignificant compared with hundreds of dollars in additional recurring costs.

This is why comparing LLCs by formation fee alone can produce the wrong conclusion.

When comparing states, look at four numbers:

• Formation fee
• Annual or biennial filing fee
• State-level taxes
• Business-specific and local requirements
• The first three tell you about the cost of maintaining the legal entity. The fourth tells you more about the cost of actually operating the business.

What Other Costs Do You Need to Start an LLC?

The LLC filing itself is only one part of getting a business ready to operate.

Depending on what you do, you may also need to budget for several other expenses.

Registered Agent

An LLC generally needs a registered agent to receive official documents and legal notices.

Depending on your state's rules, you may be able to serve as your own registered agent. If you hire a professional service, you'll generally pay an additional recurring fee.

For a small business owner, the decision is therefore less about "How much does an LLC cost?" and more about whether paying someone else to handle this responsibility is worthwhile.

Business Licenses and Permits

Forming an LLC doesn't automatically give you permission to perform every type of business activity.

Your licensing requirements can depend on your industry, state, city, county, type of service, and business location.

A freelance designer and a plumbing contractor may both operate as LLCs, but their licensing requirements can be completely different.

This is why a generic LLC cost estimate cannot accurately tell every business owner their total startup cost without knowing what the business actually does.

DBA Registration

You may also need to register a DBA, sometimes called a fictitious business name or assumed name.

For example:

Legal entity: Smith Home Services LLC
Business name: Smith Landscaping

Whether a DBA is required depends on the jurisdiction and how you use your business name.

Operating Agreement

An operating agreement explains how an LLC is managed and how responsibilities and ownership are structured.

You may create one yourself, use a template, or hire a professional. The cost therefore varies widely.

The important point is that an operating agreement is separate from the state filing fee.

Expedited Filing

Some states allow you to pay extra for faster processing.

If you have no deadline, this may not be necessary. If you need the LLC formed quickly, however, expedited processing can become part of your initial budget.

Professional Help

You can often file an LLC yourself. You can also pay an attorney or accountant for assistance.

That cost is optional in many straightforward situations, but professional advice can become more valuable when the ownership structure, tax situation, or business activity is more complicated.

How Much Does It Cost to Maintain an LLC?

Creating an LLC is a one-time event. Keeping it active can create recurring obligations.

These may include annual reports, biennial reports, franchise taxes, state business taxes, registered agent services, business license renewals, and professional license renewals.

Annual Reports Aren't the Same as Annual Taxes

This distinction is worth emphasizing.

An annual report is generally a filing that keeps the state's business records current.

An annual tax is a tax obligation.

A state can have an annual report and an annual fee, an annual report without a fee, an annual tax without an annual report fee, or both an annual report and a separate tax.

So when researching your state's LLC requirements, don't stop after finding the words "annual report." Look for the actual fee and tax requirements as well.

Recurring Costs Become More Important Over Time

Consider a hypothetical LLC with:

• $100 formation fee
• $150 annual recurring cost

The first year would cost: $250

The next four years would add: $600

So over five years: $850

The initial $100 filing fee represents only a small part of the total.

This is why a business owner planning to operate for several years should think in terms of total cost of ownership, not just formation cost.

How Much Should You Budget for Your First Year?

Instead of searching for one number, build your own first-year estimate.

This separates the costs that create the business from the costs that keep it operating.

Example: A Freelance Business

Imagine you're starting a freelance design business.

You may need:

• LLC formation
• Registered agent
• Basic business license
• Website
• Computer and software
• Insurance
• Accounting
• Invoicing software

The LLC itself may be inexpensive, but your total startup budget can be considerably larger.

That doesn't mean the LLC is expensive. It means starting a business and forming an LLC are not the same thing.

Example: A Contractor

Now consider a contractor.

The LLC formation fee might be identical to that of the freelance designer. But the contractor may also need contractor licensing, local permits, general liability insurance, commercial vehicle expenses, equipment, payroll, accounting, and customer invoicing.

The difference comes from the business model, not the LLC structure.

This is why a useful startup budget should always include the business itself.

How to Estimate Your Real LLC Startup Cost

If you're trying to decide whether you can afford to start an LLC, use a three-level approach.

Level 1: Legal Entity Cost

Start with:

Formation fee + required state filing costs

This tells you the minimum amount needed to create the LLC.

Level 2: First-Year Compliance Cost

Add:

Annual reports + state taxes + registered agent + licenses

Now you have a better estimate of what it will take to keep the business compliant during its first year.

Level 3: Business Operating Cost

Finally add:

Insurance + equipment + software + accounting + marketing + other business expenses

This gives you a much more realistic first-year startup budget.

For example:

The important insight is that only $250 of this example comes directly from forming and maintaining the LLC.

The rest comes from operating the business.

LLC Cost FAQs

How much does it cost to start an LLC in 2026?

There is no single nationwide price.

Your initial cost is usually based on your state's formation fee, but your first-year budget may also include recurring state costs, licenses, permits, registered agent services, and other business expenses.

What is the cheapest state to start an LLC in 2026?

That depends on what you mean by "cheapest."

If you're comparing only the formation fee, some states charge less than $50.

But the lowest formation fee doesn't necessarily mean the lowest long-term cost.

Compare the formation fee, recurring filing requirements, taxes, and business-specific costs before making a decision.

Do all LLCs have an annual fee?

No.

Some states don't charge a conventional annual report fee, while others require annual or biennial filings. Some also impose separate taxes on LLCs.

You need to check both the filing and tax requirements for your state.

Can I form an LLC myself?

Yes. Many business owners file the formation documents themselves through their state's business filing system.

The advantage is that you can avoid paying a third-party formation service.

The tradeoff is that you're responsible for completing the filing correctly and understanding the applicable requirements.

Do I need a registered agent?

An LLC generally needs a registered agent that meets the state's requirements.

In many situations, the owner or another eligible individual can serve as the registered agent.

A professional service is an option if you prefer to outsource the responsibility.

Is an EIN free?

Yes. You can obtain an EIN directly from the IRS for free. The IRS explicitly states that you do not have to pay a fee to obtain an EIN. You can get an EIN directly from the IRS.

Is an LLC expensive to maintain?

It depends on the state and the business.

Some LLCs have relatively low recurring state costs. Others can have significant annual taxes or filing fees.

The best way to estimate your cost is to calculate both your first-year cost and your annual cost after the first year.