How to Start an LLC for as Little as Possible

Forming a company is never entirely free, but almost every service charging you hundreds is reselling something you can do yourself in an hour.

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Search for how to form an LLC and you will find a wall of services charging anywhere from modest to substantial fees. Almost all of them are filling in a form you could file yourself. The state filing fee is unavoidable; nearly everything else is optional.

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What genuinely costs money

The state filing fee. This is set by the state and cannot be avoided. It varies widely, from under a hundred dollars to several hundred depending on where you form.

Annual or biennial reports. Most states require an ongoing filing with a fee. Some states have a substantial recurring franchise tax. This ongoing cost matters more than the setup cost and is what people forget.

Everything else on the typical checkout page is optional.

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What is genuinely free

Your employer identification number. Obtained directly from the tax authority at no cost, usually issued immediately online. Any service charging for this is charging for a free government process.

Your operating agreement. Required in some states, sensible everywhere. Templates are widely available at no cost, and for a single-member company the standard template is usually adequate.

Name availability search. Free through the state business registry.

Filing the formation documents. Most states have an online portal where you file yourself in under an hour.

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The registered agent question

Every company needs a registered agent with a physical address in the state to receive legal documents. In most states you can be your own agent at no cost.

The trade-offs are real though: your address becomes public record, and you must be available during business hours. Paying a service is reasonable if you work from home and would rather not publish your address, or if you form in a state where you do not live.

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Where to form

Advice to form in Delaware or Wyoming is usually wrong for a small operating business. If you operate in your home state, you will generally need to register as a foreign entity there anyway, meaning two sets of fees and two sets of filings.

Unless you have a specific reason such as outside investment, form where you actually operate.

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What to do after forming

Obtain your tax identification number, open a business bank account, and keep business and personal money genuinely separate. That last point matters legally, because mixing them undermines the liability protection that is the entire reason for forming a company.

Check whether your city or county requires a business licence, which is separate from formation and frequently missed.

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A realistic total

Doing it yourself, the cost is the state filing fee plus any local licence. Everything else can wait until you have revenue. If paperwork genuinely stresses you, paying a service is a reasonable convenience purchase, but go in knowing that convenience is what you are buying.

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