Before starting your own business, be aware of the costs of setting up your limited liability corporation (LLC). Here is an overview of the costs common to all states that will help you prepare and budget for this important step in the creation of your business.
Costs of Starting an LLC
Doing business as an LLC provides a relatively simple and economical way to set up a business of any size. Many people choose an LLC not only because of costs, but also for its tax advantages. An LLC also offers a small amount of legal and financial protection for your personal assets.
Each state has its own requirements and costs associated with filing for an LLC, but there are some general considerations that apply across the board. The best place to start is at the website for the secretary of state for the state in which you plan to register your LLC. Under the corporate division of the secretary of state, which is responsible for the filing and recording of all businesses in the state, there will be an option to find more information for starting an LLC. Filing can often be completed online.
Fees You Can Expect When Starting an LLC
There is more to the cost of starting and LLC than the state fees. Legal and accounting advice is valuable in determining the tax structure and economic benefits of the different types of corporations. Following is a breakdown of areas where you can incur fees.
Filing fee of approximately $100. This is paid to the state where the LLC is being formed.
Change fees might be charged by the state for any changes to your initial LLC filing. These are typically between $15 to $25 whenever you add, subtract or change the managers, members or attorney of record; basically you will pay an administrative fee for the paperwork generated by the state.
Attorney fees include the creation and execution of an operating agreement. You might also want to have your attorney file your LLC to make sure it is properly registered with the state.
Annual report filing fees are approximately $100 per year to keep your LLC current with the state. Late charges of up to $50 are charged by the state for late annual reports.
There are many companies who will help you complete the necessary paperwork and file your LLC. These services or software packages can range from $100 to $400, plus state filing fees.
Once the paperwork is filed along with corresponding fees, it will take approximately eight weeks to receive a certificate of formation and officially own a Limited Liability Corporation.