How much does it cost to start an LLC: Filing Fees By State

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Companies that offer to help an owner get started for a fee take advantage of people who don’t know any better.

They are disguised as a package deal that helps you set up your company structure and allows you to start doing business almost instantly.

Here are the signs that these so-called packages are just a scam:

  • It’s too good to be true.
  • The company offers you cash to start your business.
  • It’s just a bit to get you in the door.
  • You’re not saving time but wasting it.
  • They want your credit card information.
  • You have to pay for this service upfront or put a deposit down on it, and it will cancel your order if you don’t pay in full within 24 hours.
  • These things are a huge red flag, and you should stay away from these companies, their promises, and come-ons!
  • The actual cost of setting up an LLC is ultimately cheaper than any of those scam packages, and it’s better because you don’t have to make any upfront payments or give out your credit card info to anyone, well, maybe the state, but that’s about it.

You’ll get through the process quickly because you’ll have little or nothing to do on your end.

How Much Does Forming your LLC cost: Everything You Need to Know

If you are thinking of forming an LLC, there is a lot to consider. The first and most important thing to know is that the cost of forming an LLC ranges from $100 to $200, depending on whether you opt for the simplified version or the standard package.

The second most important thing to know is that several companies offer free LLC incorporation in exchange for your review on their website or product.

This is an excellent way for them to make money, not you! You will have to pay an inflated price for the “service.”

Exact Cost of LLC Formation: Free or $200?

The True Costs of Starting an LLC Cost to form an LLC vary depending on which state you are creating your business in and whether you want to choose a complex or straightforward package.

The simple package will be $100 to start up your company.

The standard is $200, which includes the formation of a limited liability company, incorporating a business name, applying for an EIN, and then sending the EIN to the IRS for purposes of LLC filing fees returns.

Keep in mind that you are not taxed on any filing fee unless your LLC makes money. States like Nevada and Delaware have no corporate or LLC fees at all. So, the only way you are going to be paying is if your LLC is profitable.

If you are starting a business with low overhead, it is possible to create an LLC without using a lawyer.

If you have two others who are also starting your business, one lawyer can do all of this for each of them at a low cost. If you use a lawyer, you will only need one to prepare your LLC documents in most cases.

If you are not using a lawyer, some companies specialize in helping customers form your LLC without the expense of a lawyer.

For example, the standard package for forming an LLC can cost $300 using this method. So, if you are looking to save money, you may want to go with the simple package for $100.

They will also help you with filing all of your paperwork if you need it.

Standard or Simple?

Which package is best depends on several factors? First of all, if your business has assets, you should consider the standard package because it will be the most beneficial.

The simple package does not protect your business assets.

Regardless of which package you choose, the cost will be somewhere in the range of $100 to $200.

How Much Does It Cost To Start an LLC In Another State?

The cost of starting an LLC in another state varies depending on several factors, including the location in which you are doing business and whether you are using a lawyer or not.

If you use a lawyer, it will be more expensive than trying to do it yourself.

For a token to be of any use, you will need the Registered Agent Services and the Mailing Address for your LLC. If you don’t have them yet, it is going to cost you a bit more.

If you are moving into another state that doesn’t have an LLC statute, then the only way you can start an LLC within that state is if there are existing ones and they have already registered themselves as a representative of that state. In this case, you will have to register as a foreign LLC.

The cost of filing for a foreign LLC is more expensive than filing in your state or any other state because the company making money off of you has to pay for the paperwork and labor involved in filing within another state.

The average cost will be $500 with an extra $100 if you need help with the tax registration. It is so expensive because they are charged as a business entity and have to pay an annual fee.

Let’s discuss everything in detail step-by-step!

Business Licenses and Permits

Every business needs proper permits and licenses. A business license is a document that permits you to do business. They are issued under municipal law by the state in which the company is registered. It is the most universally accepted license there is for a business.

However, it’s not the only one! Some companies need other types of licenses, such as a car dealer’s license or liquor license, but we will be concentrating on your basic business license requirements here.

The prices vary from state to state and from city to city when it comes to business licenses. However, there are some things that are always true.

In a small town, anywhere from 1-5 businesses will need the same type of business license. Firms that have between 6-25 employees will need a different form of business license than companies with only a few employees.

It is important to note that your company needs entirely on its size and quantity of employees.

There are three essential licenses that every company needs, and they are as follows:

  • A Business License
  • A Commercial License
  • A Certificate of Authority/Licensure

Some businesses only require one of these licenses. However, there are quite a few that need two, and finally three. For example, your company may need two or three different kinds of business licenses.

You may have one for general business, another for commercial use, and still another if you’re going to be selling alcohol on the premises.

There are several forms that these business licenses come in. The most common is the standard business license, the standard commercial license, and the special business license.

The first type of license is a standard business license, which is a permit to do business in the city where you have your company’s registered office.

There are two different forms for this type of license: sole proprietorships and general partnerships.

The second type of business license is a standard commercial license. This is actually the same thing as the first license, a permit allowing you to do business in the city where you have your registered office. The only difference is that it also allows you to sell products or services within that city.

Now, if your company is just starting and doesn’t need any of these licenses at all, then you can skip this next section entirely. You can go straight to the information on where you can legally do business in your state.

The reason for this is that many companies start out without the proper licenses. However, plenty of businesses out there would like to keep it on the down-low until they have a steady cash flow.

In this case, you’ll need an LLC and a DBA (Doing Business As) license, which will permit you to open up a bank account under an assumed name.

Publication Service Fees

As I already mentioned, before you get started with any type of business license or permit, you will need to publish the proposed name of your company in the newspaper where you are performing business. This is because this is a way to let other companies know what industry you are going into.

The cost for this publication differs depending on where you live and how many newspapers you choose to publish in. If your area has a small population, then newspaper companies will charge more for publication than if your company is located near a large city.

There are also different levels of newspapers; the larger the population, the higher the price will be for publication. For example, in Manhattan, a full-page ad in The New York Times will cost you $4,950, while a quarter-page ad on page 6 of The Wall Street Journal will only cost $1,300.

Name Reservation Fee

When you choose to publish your company name in a newspaper, then that is considered your first step towards business. The second step is to reserve the name in the state where you are doing business. This reservation fee varies depending on the state and the type of business that you do.

For example, if your company has a commercial license, this will cost nothing, but if you only have a standard business license, it will cost $100.

The reason for this is because a commercial license allows you to do business in the state in which you have chosen to do business. If you only have a standard license, then it will be required that you pay $100 for your company name to be approved.

If the proposed name of your company has already been taken, then you will not need to pay the reservation fee.

Fictitious Name Fee

This is very similar to the business license state fee. The only difference is that you will have to pay it in addition to the publication fee.

This charge also depends on where you live and whether or not your company has a commercial or standard business license. If you are just starting, this will cost a few hundred dollars for registration because your company name hasn’t been approved yet, but there will be no cost at all if it has already been approved.

In addition to this, if your company has a commercial business license, then you will have to pay $200 for a fictitious name. If it only has a standard one, then there will be no charge at all.

What is a fictitious name?

This is the name that you choose to go by while your company is in the early stages of its life cycle. You can do business under your real name if you like, but this will cost more money.

This is because after you have printed up your business cards, opened up a bank account, and established an online presence (such as a website), then you will want to reserve this name in addition to the publication of your company’s name.

If you own a restaurant, this may be something that needs to be done immediately after opening day.

Ongoing Maintenance Costs

This is where all of the fun stuff like taxes and accounting fees come in. These ongoing maintenance state fees are paid every month in the form of a checking account.

They will be collected by the state that you are doing business with, and once a month, they will deposit money directly into your business checking account. This is why it is essential to have both a personal and business bank account set up because you don’t want to forego your company’s income.

If you don’t have a business checking account, you will need to open one up to maintain your ongoing tax fees. You are going to want to keep it separate from your personal account because there is a high chance that it will fill up with money that is not yours, as the state of Georgia, for example.

Franchise Tax

Every business has to pay a certain amount of tax each year. This is called franchise tax because it is a tax that is directly levied by the government on any business. This franchise tax varies depending on how many employees you have and how big your business is.

In the state of Georgia, if you have more than ten employees, then you will need to pay a franchise tax every three months. If you don’t have any employees, it will only be four times a year (in April, July, October, and January).

Annual/Biennial Report

This is something that most people don’t think about, and it can actually be quite expensive if you don’t prepare yourself. An annual/biennial report is a document that you are required to fill out by the government every year or every other year.

This document contains information about your corporation, such as employees, revenue, and expenses.

The only way to get this information is by organizing all of the documents that you have from the past year, which can be overwhelming for people who aren’t business people by nature.

If you don’t prepare this report, then you will be fined, which can cost you a lot of money.

If your annual/biennial report is not filled out correctly, then a state tax officer will show up at your door with forms and a list of items that need to be included in the report. You will need to take care of this on time, or else you will find yourself facing some rather intense fines.

Hiring an LLC Service Provider

Every business needs to take care of some of the same things as an LLC. The most important thing is to create an invoice, inventory, income statements, and a record of doing business.

These are some internal documents that you will need for your business to run smoothly, and they are all handled by the state (you can’t do it on your own).

However, there are many other tasks that you are going to want to be completed by a professional company that specializes in LLC services.

Basic LLC Formation Service Package: $39 – $79

This is the basic package that every company needs to have. It does not have all of the bells and whistles that we discussed earlier in this article, but it covers everything that you are going to need to maintain an LLC.

This is what you will be paying for when you purchase your domain name, set up hosting, and register your LLC with the state.

Operating Agreement: $40-$99

This is a document that you will create with the help of your LLC service provider. This agreement states who owns the company, how it is going to be run, and what the responsibilities of each party are.

This is read into every meeting that your company has to ensure that every employee knows what their role is. It also makes sure that everything in the company runs as smoothly as possible because this document gives each party a detailed version of their duties within the company.

EIN Registration: $60-$70

Every business needs an EIN number. This special number ties together any employee, tax, or insurance reports that have to do with your state. If you are ever audited, then this is the only thing that will be used during the audit because it ties everything together.

If you still want to use your social security number as your EIN, you can do that, but there are some very specific rules about how this has to be done to maintain an LLC.

Registered Agent Fees: $0-$125 per year

Every business needs someone to deliver important documents to the state, another person to confirm that documents have been delivered, and pay your taxes. This is why it is recommended that you have a registered agent service who will come to your office and do all of this for you.

However, it is important to note that no one can be the registered agent of two companies in the same state.

Business License Research Service: $99

This is a service that you can use to help you find out which business license you need. You will be charged for this service at the beginning of each year and then again if you decide to change your state.

If the business that you are purchasing or starting up does not need a license, then there will be no charge.

Do you have to pay for an LLC every year?

You are not required to pay for your LLC every year. However, there are some benefits to doing so.

The state of Georgia is very strict about maintaining that you have been operating the company in good health for the entire year before you receive an annual fee.

So, if you start a company to only use it for a couple of months and then shut it down before the next year begins, it will be charged again.

However, if you continue to operate your LLC, then you can pay quarterly or annual.

Quarterly:

Paying quarterly will make it so that your annual fee won’t charge until the following year. This is great for people who are just starting up an LLC because they don’t have enough money to pay for an entire year at once, but they do have enough money to pay for three months at a time.

Annual: 

If you plan on paying upfront, then this is the best thing that you can do. This is because you will be able to save yourself a lot of money, and it also gives you time to save money because your company will have enough money to operate correctly for one year.

Why would you want to pay upfront?

This is beneficial because it allows your business to start off with more than enough money. For example, if you do a drop-shipping business and sell 10 million dollars worth of products every year, you will be paying over $1000 a month in fees.

Annual fees can be expensive if you are not careful, so it is best to make sure that your company is running properly before you start paying for them.

The time that you will pay upfront is called your effective period. This is the amount of time your company will be in effect before you begin paying annual fees again.

This is all determined by the state, so make sure to check with your registered agent in order to see how long this period lasts.

Can I pay myself a salary from my LLC?

Yes. You can pay yourself a salary and/or benefits from your company. However, you will have to pay the company instead of yourself. This means that your money will be taxed twice (once by your business and once by the government).

You can do this if you want but, if you are making less than $500,000 per year, then it is better to take out what you need in order to live and then have the rest sent into your account so that it is only taxed once.

Do I need a lawyer to start an LLC?

No. There are two reasons that you do not need a lawyer to start an LLC:

  1. If you are purchasing or registering your domain name, you already have a business incorporated, so it would be redundant to have a lawyer register the domain name.
  2. Second, there are very specific laws regarding how you incorporate your LLC, and they can’t be discovered by searching Google or Imgur.

If you still want to use professional help, you can hire someone licensed in Georgia to conduct all of the incorporation procedures for you.

How much does a lawyer charge for forming an LLC?

This is hard to answer because it really depends on the lawyer.

However, the average cost for the state of Georgia is $1200, and this doesn’t include taxes and fees. Most lawyers will charge less for LLC services, but, again, they can’t tailor their services because there are different laws depending on your state.

What if I Don’t Pay?

There are penalties if you do not pay for your LLC; this will cost you more money in the long run.

For example, if you don’t pay for your annual fees and then try to open a business bank account, then you will be denied because your company is not properly registered.

If this happens, then you will have to register again and pay the penalty, which includes fees and back taxes.

However, there are some states that do not require companies to renew their status (because the state is recognized as a foreign entity within the country). In these states, you can pay every year without any penalties.

This is something that you should look into if your state falls into this category.

What is the cheapest way to get an LLC?

The cheapest way to get an LLC is to register your domain name in a different name.

If you do that, then you will not have any worries about registering your company with a government agency.

The second cheapest route is to set up a website with the intention of selling products online in order to sell products from another company. This is called an E-Commerce business opportunity.

E-Commerce businesses generally require less customer service, and they also do not need teams of employees like companies that are looking for full-time employees.

Conclusion

I hope you found this guide helpful and that you will decide to get started.

Make sure that you read the guide completely before going through any of the steps because they have subtle differences.

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