Llcuniversity

What is an LLC?

An LLC is a Limited Liability Company . It is a business structure used to protect the personal assets of its owners. LLCs are a "hybrid entity", combining the advantages of Corporations and Partnerships, without taking on their disadvantages. An LLC can be used to run a business, or it can be used to hold assets (such as real estate, vehicles, boats, or aircraft).

Where is the best state to form an LLC?

It is best to form your Limited Liability Company in the state where you are doing business. For most people, this is their home state. For real estate investors, you'll need to set up your LLC in the state where the property is located since that is where you're legally doing business.

How much does it cost to form an LLC?

As of 2026, the average state filing fee to form an LLC is $132. The majority of the 50 states cost between $50 to $150. You can see the LLC filing fees and annual fees in all 50 states here: LLC filing fees by state .

Expensive States to Form an LLC

There are a few states that have higher than average LLC filing fees, like Alaska ($250), Massachusetts ($500), Tennessee ($300), and Texas ($300). However, just because your state has high LLCs fees does not mean you should form an LLC outside of your home state. Doing so will cost you even more! If you form an LLC out-of-state, you'll be required to register that out-of-state LLC as a Foreign LLC in your home state. This will double your LLC fees.

LLC Annual Reports

Most states require LLCs to file and pay an LLC Annual Report (also called Annual Fee). The average LLC Annual Report in the U.S. is $91. The majority of the 50 states cost between $50 to $100 per year.

States with no LLC Annual Reports

There are few states where there is no LLC Annual Fee (although a report may be due), such as Arizona, Idaho, Minnesota, Mississippi, Missouri, New Mexico, Ohio, South Carolina, and Texas.

States with Expensive Annual LLC Fees

There are a few states with higher than average LLC Annual Report fees, like California ($800), Delaware ($300), Maryland ($300), Massachusetts ($500), Nevada ($500), Tennessee ($300), and Washington D.C. ($300).

"Hidden" LLC Fees

And, be careful, even if a state doesn't have an Annual Fee (or they have a low fee), they may take that money from elsewhere. For example, in Connecticut, the Annual Report costs $20 each year, but Connecticut also has something called the Business Entity Tax. The Business Entity Tax is $250 every other year. Make sure to click your state above and read our entire guide in order to understand all of the costs associated with starting an LLC in your state.