The cost of forming an LLC depends primarily on which state you file in. Every state charges a filing fee for Articles of Organization, and most have ongoing annual fees. Beyond the state costs, you may pay for a registered agent, an operating agreement, and optional services like expedited processing.
This guide breaks down every cost you'll encounter — the mandatory, the optional, and the ongoing — so you can budget accurately before you form.
The Essential LLC Costs
Here are the categories of expense every LLC owner should understand:
- State filing fee (Articles of Organization) — mandatory, one-time
- Registered agent service — mandatory (can be yourself for free, or a professional service)
- EIN (Employer Identification Number) — free from the IRS
- Operating agreement — strongly recommended, often free or low-cost
- Annual report / renewal fees — varies by state, ongoing
- Optional add-ons — expedited filing, certified copies, business licenses
State-by-State Cost Comparison: NM, NC, and GA
Entity Lane specializes in New Mexico, North Carolina, and Georgia. Here's how their costs compare:
| Cost Item | New Mexico | North Carolina | Georgia |
|---|---|---|---|
| Articles of Organization | $50 | $125 | $100 (online) / $110 (mail) |
| Annual Report | None required | $200/yr | $50/yr |
| Registered Agent (Entity Lane) | $49/yr | $49/yr | $49/yr |
| EIN | Free (IRS) | Free (IRS) | Free (IRS) |
| Operating Agreement | Free (template) or $0–$99 | Free (template) or $0–$99 | Free (template) or $0–$99 |
| Total First Year | $99 | $374 | $199 |
| Annual Cost (Year 2+) | $49 | $249 | $99 |
Total first-year cost assumes Entity Lane registered agent service and free operating agreement template. State fees are as of 2026.
Why New Mexico Is the Cheapest State to Form an LLC
New Mexico stands out as one of the most affordable states in the country for LLC formation. At just $50 to file and no annual report requirement, your ongoing costs are limited to your registered agent fee. Combined with New Mexico's strong privacy protections (no requirement to list member names on formation documents), it's a compelling choice for entrepreneurs nationwide. Read our complete New Mexico LLC formation guide for details.
Other Popular States: What They Cost
For comparison, here's what formation costs in other commonly chosen states:
| State | Filing Fee | Annual/Biennial Fee | Notes |
|---|---|---|---|
| Wyoming | $100 | $60/yr (minimum) | Popular for privacy; annual fee based on assets in WY |
| Delaware | $90 | $300/yr franchise tax | Preferred for C-corps; expensive for small LLCs |
| Texas | $300 | No annual report; franchise tax if revenue > $2.47M | High filing fee; no income tax |
| Florida | $125 | $138.75/yr | Annual report due by May 1 |
| California | $70 | $800/yr franchise tax + $20 biennial report | $800 minimum franchise tax makes CA expensive |
| Nevada | $75 + $150 business license | $350/yr (annual list + business license) | No state income tax, but annual fees are steep |
As you can see, New Mexico's $50 filing fee with no annual report is hard to beat. States like California ($800/yr franchise tax) and Nevada ($350/yr) can be surprisingly expensive despite their tax-friendly reputations.
Breaking Down Each Cost
State Filing Fee (Articles of Organization)
This is the non-negotiable cost of forming your LLC. You pay it once to the Secretary of State when you file your Articles of Organization (called a "Certificate of Formation" in some states). No formation service can waive this fee — when a company says "$0 LLC formation," they mean their service fee is $0, but you still pay the state.
Registered Agent Service
Every LLC must maintain a registered agent in its state of formation. You have three options:
- Be your own agent — Free, but your address becomes public and you must be available during business hours. See our detailed comparison.
- Use a professional service — Typically $49–$299/yr depending on the provider. See our registered agent comparison.
- Appoint a friend or family member — Free, but they take on legal responsibility and must be available at a physical address in the state.
EIN (Employer Identification Number)
An EIN is your LLC's tax ID number, similar to a Social Security number for businesses. The IRS issues EINs completely free of charge through their online application at irs.gov. The process takes about 5 minutes and you receive your EIN immediately.
Warning: Some formation services charge $50–$100 to "obtain your EIN." This is simply filling out the same free IRS form on your behalf. Unless you need someone else to do it because you lack a U.S. SSN/ITIN, save your money and do it yourself.
Operating Agreement
An operating agreement is an internal document that defines how your LLC is managed, how profits are distributed, and what happens if a member leaves. While not every state legally requires one, operating without one is risky — it can compromise your liability protection.
Cost ranges from free (using a basic template) to $99 for a state-specific customized version from a formation service, to $500–$2,000+ if drafted by an attorney for complex multi-member arrangements.
Annual Reports and Ongoing Fees
Most states require LLCs to file an annual or biennial report to confirm that your business information (address, members, registered agent) is current. Fees range from $0 (New Mexico has no requirement) to $800/yr (California's franchise tax minimum).
Missing an annual report deadline can result in late fees, loss of good standing, or even administrative dissolution of your LLC.
Optional Costs
- Expedited processing: $25–$100+ depending on the state. Standard processing in NM is typically 1–2 business days; NC and GA may take 5–10 business days.
- Certified copies: $10–$25. Useful for opening bank accounts or applying for business licenses.
- Certificate of Good Standing: $10–$25. Required by some banks, lenders, or states when you foreign-qualify.
- Business licenses: Vary by city and county. Check your local government's requirements.
- DBA / Trade Name: $10–$50 if you want to operate under a name different from your LLC's legal name.
How Formation Services Add Up: Real Examples
Let's compare the total first-year cost of forming a New Mexico LLC through different services:
| Service | Service Fee | NM State Fee | RA (Year 1) | Total Year 1 |
|---|---|---|---|---|
| Entity Lane | $0 | $50 | $49 | $99 |
| Northwest RA | $39 | $50 | $125 | $214 |
| ZenBusiness | $0 | $50 | $199 | $249 |
| LegalZoom | $0 | $50 | $299 | $349 |
| DIY (self-file + self-agent) | $0 | $50 | $0 | $50 |
DIY is the cheapest, but you lose privacy and take on the responsibility of being available during all business hours. For most business owners, the $49/yr for professional registered agent service is well worth the convenience and privacy.
How to Minimize Your LLC Costs
- Choose your state wisely. If you don't need to form in a specific state, New Mexico offers the lowest total cost with no annual reports.
- Get your EIN directly from the IRS. Don't pay a formation service to do it.
- Use a free operating agreement template for single-member LLCs. Pay for legal review only if you have multiple members or complex terms.
- Compare registered agent pricing carefully. The difference between $49/yr and $299/yr adds up over the life of your business.
- Skip expedited processing unless you truly need it. Most states process within a week.
- Set calendar reminders for annual reports. Late fees are avoidable costs.
Frequently Asked Questions
Is it really free to form an LLC?
No. When formation services advertise "$0 LLC formation," they mean their service fee is $0 — you still pay the state's filing fee (ranging from $35 in Kentucky to $500 in Massachusetts). The state fee is unavoidable regardless of which service you use.
What's the cheapest state to form an LLC?
Looking at both formation and ongoing costs, New Mexico ($50 filing, no annual report) and Kentucky ($40 filing, $15/yr annual report) are among the cheapest. However, if your business operates in a different state, you may need to foreign-qualify there as well, adding to your costs.
Do I need to pay for an EIN?
No. The IRS provides EINs completely free. You can apply online at irs.gov and receive your number immediately. Be wary of any service charging $50+ for this.
What happens if I don't file my annual report?
Most states impose late fees and eventually place your LLC in "not in good standing" status. If you continue to miss filings, the state can administratively dissolve your LLC. Reinstatement usually costs more than the original filing would have.
Should I form in my home state or another state?
If your business operates primarily in one state, form there. Forming in a "business-friendly" state like Wyoming or Delaware while operating in California, for example, means you'll need to foreign-qualify in California anyway — paying fees in both states. The exception is if you want a specific state's privacy benefits (like New Mexico's anonymous LLC) for a business that operates entirely online.
How much does an LLC cost per year after formation?
Ongoing costs include your annual report fee (if applicable) and registered agent service. In New Mexico with Entity Lane, that's just $49/yr. In North Carolina, it's $249/yr ($200 annual report + $49 RA). In Georgia, it's $99/yr ($50 annual registration + $49 RA).