The Cheapest Way to Form an LLC in Your State (2026 Costs)

An LLC protects your personal assets, looks professional to clients, and unlocks business banking — and it costs less than most people think. The cheapest way to form an LLC in your state is almost always doing it yourself directly with the state, skipping the $200+ middlemen.

State fees range from $40 to $500, and the process takes 20 minutes online. Here’s exactly how to do it for the lowest possible cost.

The short answer: file directly with your state’s Secretary of State website — DIY filing costs only the state fee ($40–$300 in most states; cheapest in Kentucky, Arkansas, and Arizona at $40–$50). Skip formation services that charge $200+ on top. Budget extra for a registered agent if you don’t want your home address public.

What Is the Cheapest Way to Form an LLC in My State? The DIY Method

Go to your Secretary of State’s website (search ‘[your state] secretary of state LLC filing’) and file the Articles of Organization online yourself. The form asks for basics: your LLC’s name, your address, and a registered agent (that’s you, in most cases). It takes 15–30 minutes, and you pay only the state filing fee — no service markup, no upsells.

State fees vary enormously: Kentucky ($40), Arkansas ($45), Arizona ($50), and Colorado ($50) are cheapest; Massachusetts ($500), Illinois ($150), and California ($70 filing + $800/year franchise tax) are priciest. After filing, get your free EIN (tax ID) from the IRS website — never pay for this; any site charging for an EIN is a scam. Then open a business bank account to keep finances separate, which is the whole point of the liability protection.

• File Articles of Organization directly with the Secretary of State
• Cheapest states: KY ($40), AR ($45), AZ ($50), CO ($50)
• Priciest: MA ($500), CA ($70 + $800/year tax), IL ($150)
• Get your EIN free from the IRS — never pay for one
• Open a separate business bank account immediately

DIY vs Formation Services: The Real Math

LegalZoom, Incfile/Bizee, and Northwest Registered Agent charge $0–$300+ plus state fees for what is essentially filling out one form. Their value isn’t the filing — it’s the hand-holding and the registered agent service. If the paperwork intimidates you, the budget play is Bizee’s free tier (you pay only state fees) or Northwest ($39 + state fees) for genuinely good support.

What I’d actually recommend: DIY the filing (it’s genuinely simple), and spend money only where it matters — a registered agent service ($100–$125/year from Northwest) if you work from home and don’t want your home address on public records. That’s the one upsell that’s actually worth it for home-based businesses. Everything else — operating agreements, EIN, banking — you can do free.

The Hidden Costs Nobody Mentions

The filing fee isn’t the total cost of LLC ownership. Many states charge annual report fees ($0–$300/year) — miss them and your LLC gets dissolved. California’s $800/year franchise tax applies even if you make $0, which is why Californians sometimes form elsewhere (though if you operate in California, you still owe it). Some cities and counties require separate business licenses ($25–$100/year).

And the biggest hidden cost: not keeping the LLC legitimate. An LLC only protects you if you treat it like a separate entity — separate bank account, no commingling funds, annual filings current. Pierce that veil by paying personal bills from the business account and a lawsuit can reach your personal assets anyway. The paperwork is cheap; the discipline is the real requirement.

Do You Even Need an LLC Yet?

Honest take: if you’re freelancing with no employees, no significant assets at risk, and clients who pay via invoice, a sole proprietorship (free, no filing) plus good insurance is often fine to start. The LLC becomes clearly worth it when you have meaningful revenue, hire people, sign leases, or work in litigious industries.

There’s no prize for forming too early — but there’s real cost in forming and then ignoring the maintenance. Start as a sole proprietor, form the LLC when revenue justifies it (many accountants suggest the $30k–$50k revenue range as a rule of thumb, though liability exposure matters more than revenue). When you do form, you’ll know the cheapest path: straight to the Secretary of State, DIY, no middleman.

What Is the Cheapest Way to Form an LLC in My State Without Mistakes?

The DIY path is cheap, but a few common mistakes cost more than the filing fee. Mistake one: choosing a name that’s too similar to an existing business — check your Secretary of State’s business name database before filing, and run a quick USPTO trademark search too. A rejected filing wastes weeks; a trademark conflict wastes the whole brand.

Mistake two: being your own registered agent with your home address when privacy matters — your address becomes public record permanently. If that bothers you, the $100–$125/year registered agent service is worth it from day one. Mistake three: forgetting the next steps — the LLC filing is step one of five. You still need the EIN (free, IRS.gov), the operating agreement (free templates work for single-member LLCs), the business bank account, and any required local business licenses.

Mistake four: forming in the wrong state to ‘save money.’ Form where you operate — forming in Delaware or Nevada while running the business in Ohio means paying both states’ fees plus a registered agent in each. The YouTube gurus selling Wyoming LLCs to everyone are selling, not advising. And mistake five: forming the LLC and then ignoring annual reports — set a calendar reminder now; dissolved LLCs protect nothing.

Related reading: what is the difference between an LLC and a sole proprietorship  ·  what is the best business bank account for startups

The Bottom Line

File directly with your Secretary of State for just the state fee ($40–$300 depending on state) — skip the formation service markups. Get your EIN free from the IRS, open a separate bank account, and consider a $100/year registered agent to keep your home address private. Remember annual fees and don’t commingle funds, or the liability protection is just paper.

Sources: SBA: choose your business structure  ·  IRS: apply for an EIN online