How Much Does It Cost to Form an LLC? A 2026 Breakdown
How Much Does It Cost to Form an LLC? A 2026 Breakdown
If you have been thinking about turning a side project into a real business, you have probably asked how much it costs to form an LLC. The answer depends mostly on where you live, and the numbers swing wider than most people expect. Filing fees run from $40 in Kentucky to $500 in Massachusetts, and a few states pile on annual taxes that dwarf the filing fee itself. Here are the real numbers for 2026 so you can budget with confidence and skip the traps that catch first-time founders.
The Short Answer: Most People Pay $200 to $400 in Year One
For the majority of new business owners, forming an LLC in 2026 costs between $200 and $400 in the first year. That covers the one mandatory expense, the state filing fee, plus the add-ons most people end up paying. Some owners spend far less. In New Mexico, for example, you can get an LLC for $50 total, because the state charges a $50 filing fee and no annual fee at all.
On the other end, the cost can climb past $1,000. New York charges a $200 filing fee, then requires you to publish a formation notice in two local newspapers for six weeks, which can cost anywhere from a few hundred dollars to over $1,000 depending on the county. California asks only $70 to file, but then hits you with an $800 annual franchise tax every single year.
How Much It Costs to Form an LLC by State in 2026
The state filing fee is the only cost you cannot avoid. Every state makes you file a document called the Articles of Organization (a few states call it a Certificate of Formation) with the Secretary of State, and each state sets its own price. Here is what a dozen of the most common states charge this year, along with the annual fee you will owe afterward:
| State | Filing Fee | Annual/Ongoing Fee |
|---|---|---|
| Kentucky | $40 | $15 annual report |
| Colorado | $50 | $10 annual report |
| New Mexico | $50 | $0 |
| Arizona | $50 | $0 |
| Missouri | $50 (online) | $0 |
| Wyoming | $100 | $60 minimum annual fee |
| Ohio | $99 | $0 |
| Florida | $125 | $138.75 annual report |
| New York | $200 | $9 biennial statement + publication costs |
| Texas | $300 | $0 (franchise tax applies above ~$2.65M revenue) |
| California | $70 | $800 annual franchise tax |
| Massachusetts | $500 | $500 annual report |
Notice how the ranking changes when you look past the filing fee. California looks like a bargain at $70 until you add the $800 tax that arrives every year. Texas looks expensive at $300, but with no annual report fee, a Texas LLC can be cheaper than a Florida LLC by year three.
The Hidden Costs Nobody Warns You About
The filing fee is only part of the bill. Here are the extras that surprise first-time filers:
Registered agent ($0 to $300 per year). Every state requires your LLC to have a registered agent with a physical address in the state to accept legal mail. You can serve as your own agent for free, but many owners hire a service for privacy. Those typically run $100 to $300 a year.
Publication requirement (New York, Arizona, Nebraska). A handful of states make you publish a notice of your new LLC in approved newspapers. New York is the famous one: six weeks of publication in two newspapers, and in New York City the cost routinely tops $1,000. Arizona and Nebraska have their own lighter versions of this rule.
Operating agreement ($0 to $200). Most states do not legally require one, but this document spells out who owns what, how profits split, and what happens if a partner leaves. Free templates exist online. Skipping it is one of the most common mistakes single-owner LLCs make.
Business licenses and permits ($0 to several hundred). Forming the LLC does not automatically license you to operate. Depending on your city, county, and industry, you may need a general business license, a home-occupation permit, or professional licenses.
The EIN (free). Here is some good news: the Employer Identification Number you need for taxes and bank accounts is completely free from the IRS, and you can apply online in minutes. Never pay a formation service extra for an EIN you can get yourself at no cost.
The Cheapest States to Form an LLC (and Why That Can Be a Trap)
If you sort purely by filing fee, Kentucky ($40), Arkansas ($45), and Colorado ($50) sit at the top of the cheap list, with New Mexico and Arizona close behind. New Mexico and Missouri are especially attractive for long-term owners because they charge $50 to file and nothing afterward.
But here is the trap: forming your LLC in a cheap state does not save you money if that is not where you actually do business. If you live in California and form a Wyoming LLC to save on fees, you still have to register as a “foreign LLC” in California, pay its $800 franchise tax, and keep filings current in two states. For about 95 percent of small businesses, the cheapest move is simply forming in the state where you live and work.
DIY vs. Formation Service: Which Is Cheaper?
You have two ways to file. Doing it yourself on your Secretary of State’s website costs exactly the state fee, nothing more. Filing takes most people 20 to 30 minutes, and the forms ask for basic information: the LLC name, the registered agent, and a business address.
Formation services like Northwest Registered Agent, Bizee, and LegalZoom charge anywhere from $0 (plus state fees) to $500 or more, usually bundled with a year of registered agent service. A service buys you convenience and fewer chances to botch the paperwork. If you are forming a simple single-member LLC in your home state, DIY is perfectly fine. Just watch for upsells you do not need, especially paid EIN filing and overpriced compliance calendars.
How to File an LLC Without Overpaying: 5 Steps
- Pick your home state. Unless you have a specific reason to file elsewhere, form where you live and operate. It is the cheapest and simplest option.
- Check the name. Every state has an online business-name search. Make sure your chosen name is available and meets the state’s naming rules (most require “LLC” or “Limited Liability Company” in the name).
- File the Articles of Organization. Submit directly on your Secretary of State’s website and pay the filing fee. Skip the middleman if you want the lowest possible cost.
- Get your EIN for free. Apply on the IRS website right after your filing is approved. It takes minutes and costs nothing.
- Write an operating agreement and open a business bank account. This is what separates your business finances from your personal money, which is the whole point of an LLC. If you are still sketching out the business itself, our guide on how to start a small business walks through the full launch checklist, and our roundup of small business ideas can help you pick the right venture to file for.
FAQs About LLC Formation Costs
What is the absolute cheapest an LLC can cost?
In 2026, the cheapest realistic total is $40, the Kentucky filing fee, if you act as your own registered agent and skip optional extras. New Mexico at $50 with no annual fee is the cheapest long-term deal in the country.
Can I form an LLC for free?
No legitimate route makes it truly free. Every state charges a filing fee, and anyone advertising “$0 LLC formation” means $0 for their service fee on top of the state fee you still owe.
Do I need a lawyer to form an LLC?
For a standard single-member or simple multi-member LLC, no. The filing itself is straightforward. An attorney becomes worth it when you have multiple partners, outside investors, or unusual ownership terms that need a custom operating agreement.
How long does it take?
Most states approve online filings within 1 to 10 business days. Colorado and Wyoming often process same-day. New York can take several weeks. Every state offers expedited processing for an extra fee if you are in a hurry.
Is an LLC worth it for a side hustle?
Usually, yes, once the hustle earns real money or faces real risk. An LLC separates your personal assets from business debts and lawsuits, which a sole proprietorship does not. For the $40 to $300 most states charge, it is cheap protection.
The Bottom Line
So, how much does it cost to form an LLC? For most people in 2026, budget $200 to $400 for the first year and you will be covered: the state filing fee, a registered agent if you want one, and any state-specific extras. The smartest savings move is not hunting for the cheapest state on a map. It is filing in your home state, getting the free EIN yourself, and skipping the upsells. If you want the full picture of getting a venture off the ground, start with our small business starter guide before you file.
