How Much Does It Cost to Start an LLC?

If you’re starting a business, you may consider forming a limited liability company (LLC). However, you should know that doing so comes with costs. To help prepare you, this handy guide details all you need to know about the costs of starting an LLC.

Name Reservation Fee

One of your first decisions will be what to name your LLC. Once you’ve chosen the perfect name, you can reserve it with your state until you’re ready to form your LLC officially.  This is the first fee you’ll encounter. 

To do so, you’ll need to make sure the name is available. Here’s how:

1. Check for availability in your state

To ensure the business name is available in your state, go to the relevant website, usually the Secretary of State’s, and enter the names you like and similar ones. Remember, you don’t want a name that can be easily confused with other businesses in your state. 

2. Check your state’s LLC name regulations

In most states, your business name must include “limited liability company,” LLC, or L.L.C. Additionally, your name cannot be confused with a government entity or university. Each state has its regulations, so check with your state for requirements. 

3. Check Trademarks

It’s also good to ensure the name has not been trademarked. Check with the US Patent and Trademark Office to provide the name available nationally. 

4. Check domain name availability

You’ll want to make sure the domain name is available. You can check at a site like GoDaddy.com. Be sure to use .com or .org, as those give your business more credibility.

5. Google it

Do a Google search to ensure the name is not being used in the U.S. or internationally. This is particularly important if you plan to have a strong online presence for your business.  

Once you’ve done your due diligence and know your name is available, you can reserve the name with the state using their name reservation form. Again, the fee is usually nominal. 

Cost to Register Your LLC in State

To officially form your LLC, you’ll file articles of organization with the state by visiting the relevant department website. Again, it’s probably the Secretary of State. You’ll generally need at least the following information:

• Business name
• Business address
• Registered agent name and address
• The organizer’s name and contact information

As the fees for forming an LLC vary by state, it’s important to research and prepare accordingly. To understand the total costs and any additional charges specific to your state, select a state from the list below.

Business Licenses and Permits

Your business may also require specific licenses and permits at the federal, state, and local levels. These will also come with fees, which vary. 

At the federal level, licenses and permits are generally industry-specific and may include health licenses and permits from the Occupational Safety and Health Administration (OSHA).  

You may need a general business license to operate at the state level. If you sell tangible goods or services subject to sales tax, you’ll need a sales tax license, also known as a seller’s permit. 

Check the SBA guide for specific licenses required for your business. 

Here are some standard licenses and permits you may need:

• Industry-specific licenses for certain professions and industries, such as construction, plumbing, electrical, childcare, food handling, liquor, architecture, and finance
• Building and zoning permits
• Doing business as (DBA) permits using a name other than your LLC.
• Health licenses and permits at federal, state, and local levels
• Fire permits    
• Sign permits

This is a very important step in the LLC formation process, so make sure that you check with your state and local government offices to find out all the licenses and permits that you need and their costs. You could face steep fines and penalties if you operate without the proper licenses and permits.

If you need help, it’s a good idea to consult a business attorney to ensure you’re in full compliance. You can also use a service like MyCorporation to do the research and provide you with all the forms you need to license your business. 

Doing Business As (DBA) Name

If you plan to do business under a name that is not your LLC name, you’ll need to register a “doing business as” or DBA name. 

To do so, you’ll again visit the relevant department’s website. Fees vary by state.  

Annual Reports

In most states, you must file an annual report for your business. The report confirms your business information and verifies that you’re still doing business. This can usually be filed online, and the fees vary but are generally nominal. 

In Closing

Starting an LLC comes with several costs. But the benefits are well worth the money you’ll spend. For example, you’ll have personal liability protection and the advantage of pass-through taxation. 

LLC formation can be daunting, so many entrepreneurs turn to an LLC formation service like ZenBusiness, saving time and ensuring the process is done correctly.