How Much Does It Really Cost to Form an LLC?
Whether you’re just starting out or are looking to upgrade your business structure, the cost of incorporating an LLC can seem daunting. But, the truth is, it’s not as expensive as you may think.
The overall cost to form an LLC depends on the state you live in and what kind of business you plan to run. But, on average, you can expect to spend between $250-$500 to start your LLC and roughly the same amount annually to maintain it.
State filing fees
Whether you form an LLC in New York or in another state, you’ll need to pay some filing fees. The fee amounts vary from state to state.
You also need to designate a registered agent in each state where you do business. This person or company will receive tax forms, legal documents, and other important communication from the state on your behalf.
In New York, the Secretary of State will act as your LLC’s registered agent by default, but you can also choose to appoint another individual or company to serve in this role.
In addition, most states require that you publish a notice of your LLC’s formation in at least two newspapers for six weeks. This requirement aims to give potential clients and customers a chance to learn about your new business.
Business licenses
A business license is a type of permit that lets you operate your business legally. It typically costs a one-time filing fee and requires an annual renewal.
The requirements for a license can vary by state, industry and location. Be sure to check your state’s website for more information.
For example, if your business involves radio or television broadcasting, you’ll likely need a federal license from the Federal Communications Commission.
Likewise, if you want to sell alcohol in your community, you’ll need to get a liquor license from the local government.
The process for obtaining a license can be lengthy and difficult, especially if you’re not familiar with local regulations. But it’s essential to ensure that your business operates legally and safely.
Registered agent fees
There are a variety of fees and costs involved in forming an LLC. However, many of these expenses are tax-deductible.
One of these expenses involves registered agent fees. A business needs a registered agent to receive and accept documents on behalf of the company.
This may sound like a small cost, but it can add up quickly. Depending on your state, the cost to become a registered agent can range from $99 to $400.
An experienced registered agent service can save you time, money, and stress by handling the paperwork for you. They are also available to accept documents in person if you need them to be present.
New York requires that LLCs publish a notice of their formation in two local newspapers for at least six weeks. The publication affidavit must be filed with the state within 120 days of formation.
Annual report fees
Each year, LLCs, corporations and nonprofits must file an annual report with their state’s Secretary of State to keep their business information up-to-date. These reports provide state governing authorities with vital information such as the addresses of managing members and directors, as well as the name and address of the company’s registered agent.
Due dates and filing fees for these reports vary greatly from state to state. They may be based on entity type or the anniversary of the date your LLC formed in that state.
To avoid late fees, make sure you know your state’s deadline and schedule a reminder to ensure that you file on time. Failing to do so can jeopardize your business’s status with the state and even lead to the dissolution of your LLC.
