Step 01
The four costs to separate
When comparing states, separate the state formation filing, recurring report or renewal fee, registered-agent cost, and any state or local tax, license, or publication requirement. A low formation fee does not necessarily mean a low first-year cost.
Step 02
2026 benchmark snapshot
A 2026 LLC University compilation reports state filing fees ranging from $35 to $500, with an average formation fee of about $132. Treat those numbers as a planning benchmark—not a filing quote. Confirm the exact amount and current form with the official state portal before paying.
Step 03
Formation fee is only the first line
The state filing fee is the charge to submit the formation document. Confirm the current amount, payment method, processing time, expedited options, and whether online and paper filings differ on the official state business portal.
Step 04
Ongoing reports and taxes vary
Some states require an annual or biennial report; others use franchise, privilege, minimum, or other business taxes. These are different from the filing fee. Check the state revenue department and Secretary of State or equivalent.
Step 05
Add the operating costs
Budget for a registered agent when required or useful, local permits, industry licenses, insurance, bookkeeping, banking, contracts, website tools, and taxes. The LLC filing itself does not authorize every business activity.
Step 06
Use a first-year comparison
For a realistic planning number, add formation filing + first recurring report or tax if applicable + registered-agent cost + known local or industry requirements + basic operating setup. Label estimates separately from official fees.
Step 07
Avoid the cheapest-state shortcut
The best state is usually connected to where the business operates, is managed, or serves customers. Forming elsewhere can add foreign-registration, registered-agent, tax, banking, and recordkeeping complexity.
Step 08
Verify before filing
State prices and procedures change. Use the official state portal on the day you file, save the fee page or receipt, and ask a qualified attorney or tax professional when ownership, tax, privacy, or multi-state questions are material.