Forming an LLC: How Much Does It Cost?

Mihai-Alexandru Cristea 08/09/2022 | 19:04

Starting your own business will require a lot of thinking before making important decisions. One of the most important is deciding what legal structure your business will take. There are several different types of business structures, but one of the most popular is the limited liability company (LLC). In this article, we will discuss the costs associated with forming an LLC. By understanding the costs, you can make an informed decision about what is best for your business.

 

What should you be expecting to pay when forming an LLC

Having a company that has limited liability is a great way to protect your assets in case something goes wrong with the business. However, there are some costs associated with this type of protection. Now, you should also be aware of the fact that the cost of an LLC in New York will not be the same as the cost of an LLC in Florida. The reason for this is that each state has different requirements and fees. Hence, if you are to form an LLC in New York, you will have to pay the state filing fee, which is $200. On the other hand, if you want to form an LLC in Florida, then you will have to pay a state filing fee of $125.

Filing fee

This is the fee that you pay to file your LLC paperwork with the state. The amount of this fee varies by state, but it is typically around $100-$200. Now, filing fees are not the only costs associated with forming an LLC. However, they are the most straightforward and easy to calculate. In addition, paying for the filing fees is usually the first step in starting your LLC.

State requirements

When you are forming an LLC, you will be required to file certain paperwork with the state. The specific paperwork varies by state, but it typically includes forms such as the Articles of Organization and the Operating Agreement. In addition, some states require that you publish a notice in a local newspaper. These requirements are in place to let the public know that you are forming an LLC. The cost of these requirements varies by state, but it is typically around $100-$500.

Attorney fees

If you decide to hire an attorney to help you form your LLC, you will need to pay their fees as well. Attorney fees vary depending on the experience and expertise of the attorney, but they typically start at around $500. Your attorney will be of crucial help in ensuring that all of your paperwork is filed correctly and that you are in compliance with state requirements. Moreover, whenever you want to dive into waters you are not familiar with, it is always best to hire a professional.

Operating Agreement

A lot of people choose to have an attorney draft an operating agreement for them. If you don’t have one, however, there are a number of templates available online that you can use for free. An operating agreement essentially outlines all of the rights, as well as responsibilities, that each member of the limited liability company works with. It is not required by law, but it is a good idea to have one nonetheless. Moreover, if you have more than one member in your LLC, it is required by some states. On average, you will be looking at a cost of around $100-$200 for an operating agreement.

EIN – Employer Identification Number

Also known as a Federal Tax Identification Number, this number is used by businesses to identify themselves for tax purposes. It is free to obtain an EIN from the IRS, and you can do so online or by mail. In addition, if you have more than one member in your LLC, you will need to obtain an EIN for the LLC itself. The EIN number is used to open a bank account for the LLC, and it is also used to file taxes. Although you will not have costs associated with obtaining an EIN, there will be some time and effort involved.

Registered Agent services

A registered agent is someone who handles official correspondence on behalf of your LLC. This person must have a physical address in the state where your LLC is formed, and they must be available during business hours. Registered agents typically charge around $100-$500 per year for their services. However, there are a number of registered agent services that offer their services for free.

As you can see, there are a number of costs associated with forming an LLC. However, by understanding these costs, you can make an informed decision about whether or not forming an LLC is right for you. If you have any questions, please feel free to reach out to us, and we would be happy to help.

 

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