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What is the cheapest state to form an LLC?
Montana is the cheapest state to form an LLC: $35 to file the articles of organization and no annual report fee, so the state cost over five years is $35. An LLC that does business in a different state from the one where it was formed registers in that state as a foreign LLC and pays that state's fees as well.
The ten cheapest states over five years
State filing fees only. "To start" is the fee to file the articles or certificate of organization plus any filing the state requires with it. "Each year" is the annual report fee plus any flat annual LLC tax, with a biennial report counted at half its fee per year. "First year" is the filing plus one cycle of each recurring fee; "5 years" is the filing plus five years of them.
| # | State | To start | Each year | First year | 5 years |
|---|---|---|---|---|---|
| 1 | Montana | $35 | $0 | $35 | $35 |
| 2 | Arizona | $50 | $0 | $50 | $50 |
| 3 | Mississippi | $50 | $0 | $50 | $50 |
| 4 | Missouri | $50 | $0 | $50 | $50 |
| 5 | New Mexico | $50 | $0 | $50 | $50 |
| 6 | Ohio | $99 | $0 | $99 | $99 |
| 7 | Idaho | $100 | $0 | $100 | $100 |
| 8 | South Carolina | $110 | $0 | $110 | $110 |
| 9 | Kentucky | $40 | $15 | $55 | $115 |
| 10 | Hawaii | $50 | $15 | $65 | $125 |
Every state is in the Rank table, which also covers corporations, nonprofits and out-of-state registration.
Cheapest filing fee is not the same as cheapest over five years
By filing fee alone, Montana is lowest at $35, then Kentucky at $40, then nine states at $50: Arizona, Arkansas, Colorado, Hawaii, Iowa, Michigan, Mississippi, Missouri and New Mexico. The yearly fee separates them. Arizona, Mississippi, Missouri and New Mexico charge no annual report fee, so an LLC there stays at $50 over five years. Hawaii adds $15 a year ($125 over five years), Colorado and Michigan add $25 a year ($175), and Arkansas charges $300 a year with its franchise tax report, $1,550 over five years.
Three states with a higher filing fee still land in the ten because they charge nothing each year: Ohio ($99), Idaho ($100) and South Carolina ($110). Minnesota ($155, with a free annual renewal due by December 31) is just outside the ten.
Forming in another state: the registration fee that follows
An LLC formed in one state and doing business in another registers in the second state as a foreign LLC. The registration fee is often higher than the fee to form an LLC there: Texas charges $750 to register a foreign LLC against $300 to form one, South Dakota $750 against $150, and Massachusetts $500 either way. An LLC formed in Montana for $35 and registered in Texas pays $785 in state filing fees to start, against $300 for a Texas LLC.
The registered state can require its own reports too. Mississippi lists a $250 annual report fee for foreign LLCs against $0 for its own, and Maine charges $150 for a foreign LLC's annual report against $85 for a domestic one. Each state also requires a registered agent with a street address in that state. The fee for every state is in foreign LLC registration cost by state, and the steps are in registering an LLC in another state.
First year versus five years
Kentucky's first year is $55 ($40 to file plus a $15 annual report) and its five-year total $115. Montana's first annual report is due between January 1 and April 15 of the year after formation; it is free in that window and $35 after April 15. Minnesota's annual renewal is free when filed on time. The state totals leave out registered agent fees, local licenses and income-based taxes.
Common questions
What is the cheapest state to form an LLC?
Montana, at $35 to file the articles of organization. Kentucky is next at $40, and nine states charge $50: Arizona, Arkansas, Colorado, Hawaii, Iowa, Michigan, Mississippi, Missouri and New Mexico.
Which states have no annual LLC fee?
Alabama, Arizona, Idaho, Minnesota, Mississippi, Missouri, Montana, New Mexico, Ohio, South Carolina and Texas list a $0 annual report fee and no flat annual LLC tax. Minnesota and Mississippi still require the yearly filing; Montana's report is free only between January 1 and April 15.
What does an LLC cost over five years in the cheapest state?
$35 in Montana: the $35 filing fee and nothing each year. Arizona, Mississippi, Missouri and New Mexico follow at $50.
Does forming an LLC in a cheap state save the filing fee at home?
An LLC doing business in a state other than its home state registers there as a foreign LLC and pays that state's registration fee, which ranges from $50 to $750, plus that state's recurring reports. Texas, for example, charges $750 to register a foreign LLC and $300 to form a Texas LLC.
Which cheap-to-file state is expensive to keep?
Arkansas: $50 to file, then $300 a year with the franchise tax report, $1,550 over five years.