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How to Form an LLC easily
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Forming an LLC should be straightforward and affordable.
Which state is best for forming an LLC?
Steer clear of overly promoted states like Nevada, Wyoming, or Delaware. Instead, establish your LLC in your home state.
- The first question everyone needs to consider is which state to register in. The internet is filled with misleading information on this topic. Based on our own experience, we recommend registering in your home state, as this is the most cost-effective and convenient option.
- When conducting business in other states, report and file with that state as required by law, and pay taxes.
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How much does an LLC cost?
The cost of filing for an LLC varies by state. On average, the filing fee is around $128. Additionally, the average annual report fee for an LLC is $100.
What is a registered agent?
A registered agent is an individual or business designated to receive legal documents and official notices on behalf of your LLC.
How Long Does It Cost ?
If the registration name and shareholder information are prepared, it is possible to complete the registration and obtain the electronic version of the business license template within 1-10 business day
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What is an LLC?
An LLC, or Limited Liability Company, is a type of business entity designed to safeguard the personal assets of its owners. It blends the benefits of both corporations and partnerships while avoiding many of their drawbacks.
LLCs can be utilized to operate a business or to hold various assets, including real estate, vehicles, boats, or aircraft.
Where is the Best State to Form an LLC?
The ideal state to form your Limited Liability Company (LLC) is typically the state where you are actively conducting business. For most individuals, this will be their home state.
For real estate investors, it is crucial to establish your LLC in the state where the property is located, as this is where the business activities occur.
How Much Does It Cost to Form an LLC?
As of 2024, the average cost to file for an LLC is approximately $128. Filing fees across the 50 states generally range between $50 and $500.
You can find detailed information about LLC filing fees and annual costs for all 50 states here: LLC Filing Fees by State.
States with Higher LLC Formation Costs
Some states have notably higher LLC filing fees. For example:
Alaska: $250
Massachusetts: $500
Tennessee: $300
Texas: $300
However, high LLC fees in your state don’t necessarily mean you should form an LLC in a different state. Registering an LLC out-of-state will require you to file as a Foreign LLC in your home state, which could increase your overall costs significantly.
LLC Annual Reports
Most states mandate that LLCs file an annual report and pay an associated fee, commonly referred to as the Annual Fee. On average, this fee is $100, with most states charging between $50 and $100 per year.
States with No LLC Annual Reports
A few states do not have an annual fee for LLCs (though a report may still be required). These states include Arizona, Idaho, Minnesota, Mississippi, Missouri, New Mexico, Ohio, South Carolina, and Texas.
States with No LLCStates with Higher LLC Annual FeesAnnual Reports
Some states have notably high annual LLC fees. For example:
- California: $800
- Delaware: $300
- Maryland: $300
- Massachusetts: $500
- Nevada: $500
- Tennessee: $300
- Washington D.C.: $300
Additional Fees to Watch For
Be aware that even if a state has a low or no annual fee, there might be other costs involved. For instance, in Connecticut, while the Annual Report fee is $20, there is also a Business Entity Tax of $250 due every other year.
To fully understand the costs involved in forming and maintaining an LLC in your state, be sure to review our comprehensive guide for your specific state.
LLC Registered Agent Fees
If you choose to act as your own LLC’s Registered Agent, or if you designate a friend or family member for this role, there will be no additional cost. However, if you prefer to hire a professional, Commercial Registered Agents typically charge between $100 and $300 annually.
One recommended provider is Northwest Registered Agent, which offers their services for $125 per year and is known for its excellent customer support.
What is a Registered Agent?
A Registered Agent (also known as a Resident Agent or Statutory Agent) is an individual or company designated to receive legal documents and official notices on behalf of your LLC. Most states, with a few exceptions, require that your LLC designates a Registered Agent in its formation documents.
The role of the Registered Agent is to ensure that there is a dependable person or company and a valid street address (as PO Boxes are generally not accepted) where legal documents can be delivered. Be cautious of companies that may try to pressure you into hiring them as your Registered Agent; you or someone you know can fulfill this role without additional costs.
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