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Llc Cost By State 2021

An LLC, or limited liability company, is a business structure that is a hybrid of a corporation and a partnership or sole proprietorship. The owners of an LLC are not personally liable for the company’s debts or liabilities. LLCs typically combine the flow-through taxation of partnerships and the limited liabilities of corporations. Any entity can form an LLC except for banks and insurance companies.

Advantages and Disadvantages of LLCs

Advantages of LLCs include personal asset protection, where members are not personally responsible for the LLC’s debts or lawsuits, and flow-through taxation, where profits and losses are passed through to the members, who claim them on their tax returns. Additionally, LLCs offer simplicity by being relatively easy to form and maintain, unlike S- or C-Corporations. LLCs also tend to have more credibility than sole proprietorships and partnerships due to having a more formal business structure.

Disadvantages of LLCs include a higher cost of operation than a sole proprietorship or partnership, the possibility of dissolving upon the death or bankruptcy of a member, and the downsides of flow-through taxes. Flow-through taxation is beneficial in some ways; however, LLC owners are responsible for paying taxes on their personal share of LLC income, whether or not they are given a disbursement. Additionally, LLCs are not the most suitable option if the founder is looking to become a publicly-traded company.

What Fees Do LLCs Pay?

LLCs are formal partnerships, with the owners referred to as “members” that require articles of organization to be filed with the state followed by a fee paid directly to the state. Additionally, paperwork and other fees will need to be submitted at the federal level to obtain an employer identification number.

LLC regulations vary from state to state, including filing fees that range anywhere from $50 to $500 and annual or biennial fees that arrange from $0 to $800. An LLC filing fee is a one-time fee paid to create an LLC and an LLC annual or biennial fee is a mandatory, on-going fee paid either every one or two years that keeps your LLC in compliance. Failure to file an LLC’s report and the annual or biennial fee will result in the LLC being shut down in 90% of states in the U.S.

States with the least-expensive filing fee of $50 are Arizona, Arkansas, Colorado, Hawaii, Iowa, Michigan, Mississippi, and New Mexico. Massachusetts’s $500 filing fee is the most expensive among states.

As for the mandatory, on-going annual or biennial fees, several states have a $0 fee: Arizona, Idaho, Minnesota, Mississippi, Missouri, New Mexico, Ohio, South Carolina, and Texas. California has the most expensive annual fee of $800 per year plus an additional $20 every two years.

Here are the 10 states with the highest LLC costs:

  1. Massachusetts ($500)
  2. Nevada ($425)
  3. Tennessee ($300)
  4. Texas ($300)
  5. Alaska ($250)
  6. New York ($200)
  7. Washington ($200)
  8. Alabama ($183)
  9. Maine ($175)
  10. Kansas ($160)

Llc Cost By State 2021

*Renewal fees are annual, except for the following states with biennial renewals: Alaska, Indiana, Iowa, Nebraska, New York, District of Columbia. Pennsylvania renewal is every 10 years.
State Filing Fee Renewal Fee* 2021 Pop.
Massachusetts$500$5006,912,239
Nevada$425$3503,185,786
Texas$300-29,730,311
Tennessee$300$3006,944,260
Alaska$250$100724,357
Washington$200$607,796,941
New York$200$919,299,981
Alabama$183$1004,934,193
Maine$175$851,354,522
Kansas$160$502,917,224
Minnesota$155-5,706,398
South Dakota$150$50896,581
Rhode Island$150$501,061,509
Illinois$150$7512,569,321
North Dakota$135$50770,026
Wisconsin$130$255,852,490
Vermont$125$35623,251
Pennsylvania$125$7012,804,123
North Carolina$125$20010,701,022
New Jersey$125$758,874,520
Florida$125$13821,944,577
Connecticut$120$203,552,821
South Carolina$110-5,277,830
Nebraska$105$101,951,996
Wyoming$100$50581,075
West Virginia$100$251,767,859
Virginia$100$508,603,985
Oregon$100$1004,289,439
Oklahoma$100$253,990,443
New Hampshire$100$1001,372,203
Maryland$100$3006,065,436
Louisiana$100$354,627,002
Idaho$100-1,860,123
Georgia$100$5010,830,007
Ohio$99-11,714,618
Indiana$95$306,805,663
Delaware$90$300990,334
Utah$70$203,310,774
Montana$70$201,085,004
California$70$80039,613,493
New Mexico$50-2,105,005
Missouri$50-6,169,038
Mississippi$50-2,966,407
Michigan$50$259,992,427
Iowa$50$453,167,974
Hawaii$50$151,406,430
Colorado$50$105,893,634
Arizona$50-7,520,103
Arkansas$45$1503,033,946
Kentucky$40$154,480,713

Llc Cost By State 2021