How much does it cost to start an LLC
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Forming an LLC in the US can be done very efficiently and cost-effectively if you know what the formation costs are and how to minimize them. Here’s a list of costs associated with forming an LLC.
The formation costs of an LLC
The list of costs associated with forming an LLC is not a long one, but it does heavily depending on its location in one the US state. The formation costs of LLCs vary from state to state, and also depending on whether a particular state has any additional fees and requires to set up an LLC. To set up an LLC, people need to file their formation documents, whether it be Articles of Organization or a Certificate of Formation, they must pay a state filing fee. This fee starts from $40, in Kentucky, and can range anywhere up to $250 and $300 in Alaska and Texas, and go further up to $2000 in New York due to the state’s requirements, along with Arizona and Nebraska, that newly formed LLC publish a Statement of Formation in their location news outlet, which can cost between $200-$2000 depending on location. And in Alabama, LLCs are required to reserve their name and pay a name reservation fee of $10-$28, which is optional in other states. The cost of forming an LLC is always depending on the state in which it will operate. Other fees associated with forming an LLC including the cost of hiring a registered agent, which costs on average between $100-$300 a year, and filing for the appropriate business licenses and permits. The required business licenses and permits will depend on the industry (agriculture, mining and drilling, alcoholic beverages, etc.) and location of the LLC, but more details and information about specific licenses and permits can be found at the county clerk’s offices in every state.
LLC maintenance costs
In addition to the formation fees associated with forming an LLC, business owners will also be required to pay annual maintenance fees to ensure their LLC is kept in compliance. Maintenance fees usually come in the form of an annual or biennial report fee, where LLC owners are required to submit a report of the update LLC name, address and ownership, and the fee varies from state to state, from $50 in Indiana to $200 in Alaska. Other states, such as California and Tennessee, impose a tax levy on LLCs, which can be a flat tax in some states or depending on an LLC earning and profits in other states. Knowing the maintenance costs of the different states can only benefit business owners in the long run in managing the costs of forming and maintaining their LLC.
Using a LLC formation service
Entrepreneurs have several options available to them when forming an LLC. They can either hire an LLC formation service provider, which will assist with state filing forms, provide registered agent services, set up operating agreements and even provide legal advice, depending on the provider. But entrepreneurs can also accomplish everything on their own with the assistance of an attorney. However, on average in the US, attorneys can charge anywhere between $100 and $300 per hour and an overall average of $1000 to $3000 for legal advice, all the while LLC formation services, especially those who specialize in providing legal advice can charge between $79 and $349.99 (plus state fees) to assist in the formation of LLCs. For people on a budget, finding the best LLC formation service that is suited to their LLC formation needs will speed up and ease the process of formation at a very reasonable price.
Getting started
Starting an LLC is all about getting those first steps right, and knowing how much it will cost. However, if individuals want to form an LLC with as little money spent as possible, they can get by with paying the basic costs only, that is state filing fees, publication fees and annual and franchise tax, depending on their location. With a little bit of help from websites like TRUiC, that help people set up an LLC, and have how-to guides and step-to-step formation instructions to assist individuals in knowing how to file their LLC, be their own registered agent, and everything else required to form their LLC, people can really form their LLC for anywhere between $40 and $500, the average amount being $132 to set an up LLC in the US. So why not get started today?