Paying for an LLC involves two categories of costs: the one-time state filing fee to form the business, and the recurring fees to keep it active each year. Most people pay their state filing fee online with a credit or debit card, then fund the LLC itself through a personal capital contribution deposited into a business bank account. Here’s how each piece works.
State Filing Fees to Form an LLC
Every state charges a filing fee when you submit your Articles of Organization (sometimes called a Certificate of Formation). This is the core cost of creating an LLC, and it varies widely by state. On the low end, several states charge between $50 and $100. Mid-range states fall between $125 and $300. A handful of states charge $400 or more once you factor in required extras like publication requirements or additional state fees.
If you want to lock in your business name before you’re ready to file, most states let you reserve it for 60 to 120 days. Name reservation fees typically run $10 to $50.
How to Pay Your State Filing Fee
Most states let you file online through the Secretary of State’s website and pay with a credit card, debit card, or both. Visa, Mastercard, Discover, and American Express are commonly accepted. Some states route you to a third-party payment processor to complete the transaction. You can usually check out as a guest without creating an account.
If you prefer not to pay online, many states also accept mailed paper filings with a check or money order made payable to the Secretary of State or the relevant agency. Paper filings take longer to process, sometimes several weeks compared to a few business days for online submissions.
One important note: if your payment is rejected for any reason (insufficient funds, expired card), the filing may stay on record but won’t be considered in good standing. You’ll need to resolve the payment before the state will process any future filings for that entity.
Funding Your LLC With Capital Contributions
After the state approves your formation paperwork, you need to put money into the LLC so it can actually operate. This is called a capital contribution, and it’s separate from the filing fee you paid to the state. A capital contribution is simply the money, property, or services that a member (owner) transfers into the business.
The simplest approach is writing a check from your personal bank account and depositing it into your LLC’s new business checking account. There’s no legal minimum in most states. You might contribute $500 to cover initial expenses, or $50,000 if your business needs significant startup capital. The amount depends entirely on what the business needs.
LLC laws also allow non-cash contributions. You can contribute equipment, vehicles, real estate, or other property. You can even contribute services, such as web development or consulting work you perform for the company. If you contribute property or services, you need to record their fair market value on the company’s balance sheet. Whatever you contribute becomes the property of the LLC, not your personal asset anymore.
For multi-member LLCs, each member’s capital contribution should be spelled out in the operating agreement. This document records how much each person put in, what percentage of the company they own, and how profits will be split. Even single-member LLCs benefit from documenting contributions clearly, since it helps maintain the legal separation between you and your business.
Ongoing Costs to Keep Your LLC Active
Forming the LLC is a one-time expense, but staying in good standing requires ongoing payments. Most states require an annual or biennial report, which is a short filing that confirms your LLC’s address, members, and registered agent. Report fees range from about $25 to several hundred dollars depending on the state.
Some states also charge a franchise tax or an annual LLC tax. These vary significantly. In some states, LLCs with revenue below a certain threshold owe nothing. Others charge a flat annual fee regardless of revenue. Missing these deadlines can trigger late fees, and some states will administratively dissolve your LLC if you fall too far behind.
Optional Costs Worth Budgeting For
Beyond the required state fees, several optional expenses come up during LLC formation that are worth planning for.
- Registered agent service: Every LLC needs a registered agent, which is a person or company designated to receive legal documents on the LLC’s behalf. You can serve as your own registered agent for free in most states, or hire a service for roughly $50 to $300 per year.
- Operating agreement: Not legally required in every state, but strongly recommended. You can draft one yourself using a template at no cost, or pay an attorney a few hundred dollars to customize one.
- EIN (Employer Identification Number): This is your LLC’s tax ID number from the IRS. It’s free to obtain directly through the IRS website. Be cautious of third-party sites that charge a fee for something you can do yourself in minutes.
- Business bank account: Most banks offer free or low-cost business checking accounts. Some charge a monthly fee of $10 to $15, though many waive it if you maintain a minimum balance.
- Online formation services: If you’d rather not handle the paperwork yourself, companies that file on your behalf typically charge $0 to $300 on top of the state filing fee. The free-tier options usually try to upsell you on add-ons like registered agent service or compliance monitoring.
Putting It All Together
For a bare-bones LLC where you file the paperwork yourself, serve as your own registered agent, and draft your own operating agreement, your total first-year cost could be as low as $50 to $100 in a state with a cheap filing fee. In a more expensive state, or if you hire a formation service and a registered agent, expect to spend $300 to $800 in the first year. Annual maintenance costs after that are typically $50 to $300 depending on your state’s report and tax requirements.
The most practical approach is to check your specific state’s Secretary of State website for current filing fees, then open a business bank account as soon as the LLC is approved. Deposit your capital contribution into that account, and use it for all business expenses going forward. Keeping personal and business finances separate from day one protects the liability shield that makes an LLC worth forming in the first place.