If you are looking to form an LLC, or Limited Liability Company, it pays to be aware of the costs involved in setting it up in each of the 50 states.
Sometimes you are best advised to form the LLC in the state where you reside – it’s simpler that way.
But some people – foreign investors in the US and people establishing companies that are likely to operate across several states – have the choice of which state to incorporate in.
In the table, in this article, we break down the initial and annual costs of forming an LLC in all states of the US. First, we’ve summarised some of the key findings:
What is the Cheapest State to Form an LLC?
In terms of LLC formation fees, the cheapest states to form an LLC are:
- Kentucky ($40)
- Arkansas ($50)
- Colorado ($50)
- Hawaii ($50)
- Iowa ($50)
- Michigan ($50)
- Mississippi ($50)
- Missouri ($50)
- New Mexico ($50)
In terms of ongoing costs for filing the LLC’s annual report, the cheapest states are:
- Idaho, Mississippi, New Mexico, Ohio ($0)
- Wyoming (as little as $2)
- Colorado, Nebraska ($10)
- Hawaii ($15)
- Kentucky, Indiana ($15)
- Montana, Utah ($20)
How to Choose the Right State to Form An LLC
While formation costs and ongoing costs are important, they aren’t the only consideration regarding where to form your LLC (assuming you have that choice).
Other things to consider include:
Relevant taxes (sales tax, business tax)
It is beyond the scope of this article to go into the various levels of state taxes and whether they will apply to all LLCs, but if you have questions on that, it is worth contacting an account or a lawyer, such as our legal partner Kennedy Law.
LLC Formation times
Check the table below for the typical filing times for forming an LLC. Many states, including Wyoming and Alaska, offer immediate formation of LLCs that are established online as opposed to in person.
Degree of red tape
Different states have different compliance demands, and it is important for many people to keep it as simple as possible by choosing a state with minimal red tape.
Some people place a premium on privacy and want to choose a state where the actual owners of the business can stay in the background and can’t be identified via the state business register.
Strength of legal protection
One of the main reasons to form an LLC, along with tax advantages, is to avoid having your personal assets exposed in the event of legal action. An LLC offers good protection, but in some states, creditors have been able to successfully sue single-member LLCs because their respective state does not provide the necessary protection.
Foreign LLC vs. Domestic LLC
To decide on the best state in which to incorporate, it generally pays to consider the state you are actually doing business in. If you are doing business in Florida, you could incorporate as a domestic LLC in Florida. But if you incorporate in another state, you will then have to register that LLC as a “foreign LLC” in Florida as that is where you are actually doing business.
Although this type of structure can provide more privacy and better protection at times, it also creates extra complexity, and fees that should be considered.
What is the Best State to Form an LLC?
This always depends on your needs, but as a general recommendation for states that offer cheap, fast and easy formation, low costs, good legal and privacy protection and minimal red tape we recommend Wyoming, Delaware and Nevada.
Our legal partner, Jason Kennedy of Kennedy Law, explains the rationale for these choices below.
“Wyoming offers no state income tax, filing and reporting costs are low, members’ privacy is assured, allowing for private filings, and protects assets of the LLC from all creditors with strict charging order protection.
“Delaware offers no sales tax, no state income tax or gross receipt taxes for LLCs who don’t actually do business in Delaware, no tax on intangible income (like patent and trademark leases), no annual report filing, and business licenses are not required for LLCs who don’t actually do business in Delaware. Further, Delaware courts have historically been very business-minded and favorable.”
“Nevada offers no state income, corporate, or franchise taxes. Further, Nevada offers no tax on corporate shares or profits and privacy protection for owners to choose to be anonymous. There are no operating agreements or annual meetings, low business registration fees, and quick turnaround times. Nevada has a robust corporate veil protecting individuals from liability.”
Table of Costs involved in forming an LLC in each state
|State||LLC Formation Fee||LLC Filing Times||Annual Report Fee||State Business Site|
|State||LLC formation fee||LLC filing times||Annual report fee||Link to state business site|
|Alabama||$200||Within 24 hours||$100||https://www.sos.alabama.gov/business-entities/llcs|
|Alaska||$250||Immediate (File Online)|
10-15 business days (File by Mail)
|5 – 7 business days (Expedited)|
13 – 15 business days (Non-Expetided)
|For-profit corporation – $45|
Nonprofit corporation – $10
|1-2 weeks |
2-3 business days (online)
|California||$70||3-5 business days (online)||$800||https://www.ftb.ca.gov/file/business/types/limited-liability-company/index.html|
|Colorado||$50||3 business days||$10||https://www.sos.state.co.us/pubs/info_center/fees/business.html|
|Connecticut||$120||3-5 business days||$80||https://business.ct.gov/manage/all-business-filings/llc-forms?language=en_US|
24 hours ($50 extra) Expedited
|Florida||$125||1-2 business days (online)|
5-7 days (by mail)
|Georgia||$100||7-14 days (online)|
12-15 days (mail)
Expedited: 2 days ($100 extra)
|Hawaii||$50||5-7 business days (online)|
7-10 business days (mail)
Expedited: 1-3 business days ($25 extra)
|Idaho||$100||7-10 business days (online)|
or 2-3 weeks (mail)
|$0 (however, an information report must be filed every year)||https://sos.idaho.gov/business-forms/|
|Illinois||$150||7-10 business days (online)|
4-5 weeks (mail)
|Indiana||$95||24 hours (online)|
5-7 business days (mail)
|$30 (every 2 years)||https://www.in.gov/sos/business/guide_print.html|
|Iowa||$50||5 business days||$45 online (biennial)|
$60 by mail (biennial)
2-3 weeks (mail)
|Kentucky||$40||4-5 business days||$15||https://sos.ky.gov/bus/business-filings/Pages/default.aspx|
|Louisiana||$100||2-4 business days|
3-5 business days
3 business hours ($50 extra)
|Maine||$175||24 hours ($50 extra) |
Immediate ($100 extra)
5-10 business days
|Maryland||$100||5-7 days (online) |
4 to 6 weeks (mail)
|Massachusetts||$500||1-2 business days||$500||https://www.sec.state.ma.us/cor/corpweb/corllc/llcinf.htm|
|Michigan||$50||11 Business Days|
4-7 business days
|$0 (however, an information report must be filed every year)||https://www.sos.state.mn.us/business-liens/business-forms-fees/minnesota-limited-liability-company-forms/|
|Mississippi||$50||1-2 days||$0 (however, an information report must be filed every year)||https://www.sos.ms.gov/business-services/faqs#ar03|
|Missouri||$50||5-10 days||$0 (no fee and no information report)||https://www.sos.mo.gov/business/corporations/forms#llc|
24 hours ($20 extra)1-hour ($100 extra)
|Nebraska||$105||4 business days (online)|
4 weeks (mail)
|Nevada||$425||2 business days (online) 2 weeks (mail)||$150||https://www.nvsos.gov/sos/businesses/start-a-business/limited-liability-company|
|New Hampshire||$100||3-7 business days (online)|
1-3 weeks (by mail)
|New Jersey||$125||Immediately (online)|
1-2 business days (by mail)
|New Mexico||$50||1-3 business days |
|$0 (no fee and no information report)||https://www.sos.state.nm.us/business-services/start-a-business/domestic-nm-llc/|
|New York||$200||Immediate (online)|
3-5 weeks (by mail)
|$25 to $4,500||https://dos.ny.gov/forming-limited-liability-company-new-york|
|North Carolina||$125||7-10 business days if you file (online)|
3-4 weeks (by mail)
Expedited LLC24 hours* ($100 extra)Same-day* ($200 extra)
|North Dakota||$135||2-3 weeks (online) |
4-5 weeks (by mail)
|Ohio||$99||2-3 business days (online) |
2-3 weeks (by mail)
|$0 (no fee and no information report)||https://www.ohiosos.gov/businesses/filing-forms–fee-schedule/#main-content|
|Oklahoma||$100||1 business day online or when filed in-person with $25 expedite fee|
7-10 business days by mail
|Oregon||$100||3-5 business days||$100||https://sos.oregon.gov/business/pages/starting-business.aspx|
|Pennsylvania||$125||4 – 5 weeks||$70 (every 10 years)||https://www.dos.pa.gov/BusinessCharities/Business/Resources/Pages/Pennsylvania-Limited-Liability-Company.aspx|
|Rhode Island||$150||2-3 days||$50||https://www.sos.ri.gov/|
|South Carolina||$110||24 hours (online)|
5 to 7 business days (by mail)
|$0 (no fee and no information report)||https://sos.sc.gov/about-us|
|South Dakota||$150||1-2 business days||$50||https://sdsos.gov/Business-Services/corporations/corporate-forms/limited-liability-companies.aspx|
|Tennessee||$300||2 days online /Immediately in-person|
4 business days (by mail)
|Texas||$300||5-7 business days||$0 for most LLCs (however a No Tax Due Report and Public Information Report must be filed every year)||https://direct.sos.state.tx.us/help/help-corp.asp?pg=fee|
|Utah||$70||5-7 business days||$20||https://corporations.utah.gov/business-entities/considerations-in-forming-a-limited-liability-company/|
|Vermont||$125||24 hours (online)|
7-10 business days (by mail)
|Virginia||$100||2-3 business days (online)|
2 weeks (by mail)
|Washington||$200||7-10 business days (online) |
4-5 weeks(by mail)
|West Virginia||$100||5-10 business days|
Expedited LLC:24 hours ($25 extra) plus 2 more options
|Wisconsin||$200||5 business days||$60||https://wdfi.org/corporations/fees/ltd.htm|
Another Consideration: A Series LLC
Some states (Delaware, Nevada, Illinois, Iowa, Oklahoma, Tennessee, Texas and Utah) offer a relatively new form of LLC known as a series LLC.
The advantage of a series LLC, using the advantage of real estate, is that it allows you to create a single LLC to hold a particular property and to create “cells” within that LLC to hold other properties. The theory is that each of these cells forms a separate entity so in the event there was legal action related to one property, the only assets exposed would be the property in question that sits within that cell.
Kennedy Law’s Jason Kennedy said the series LLC is a way for companies that have various assets or companies to address liability without having to register multiple LLCs.
Final Thoughts on Choosing Where to Register Your Limited Liability Company
Ultimately, the most important thing to do is to form an LLC in order to protect you, and your family from being personally liable for your business debts or judgment creditors. We recommend filing in your own state for ease; however, if you have tax concerns or your business deals in a particularly litigious field, please contact an attorney in order to structure your company properly.