Cheapest Way to Form an LLC (State-by-State Breakdown)

One of the most common questions new business owners ask is: "What's the cheapest way to form an LLC?" The answer depends on your state, what services you actually need, and whether you are willing to do some paperwork yourself. Here is a complete breakdown.

State Filing Fees (The Non-Negotiable Cost)

Every state charges a filing fee to create an LLC. This is the one cost you cannot avoid — it goes directly to the state government. Here are the ranges:

• Cheapest states ($40–$50): Kentucky ($40), Colorado ($50), New Mexico ($50), Arizona ($50), Iowa ($50)
• Moderate states ($75–$150): Wyoming ($100), Florida ($125), Georgia ($100), Illinois ($150)
• Expensive states ($200–$500): New York ($200), Washington ($200), Texas ($300), Massachusetts ($500)

Things That Are Free (Don't Pay For These)

1. EIN from the IRS. Always free at IRS.gov. Any service charging you for this is marking up a free government form. Takes 10 minutes.
2. Operating agreement templates. Free from state bar associations, the SBA, and numerous legal websites. Not customized, but functional.
3. Business license research. Your city and county websites list required licenses for free.
4. Compliance calendars. Set phone reminders for your annual report due date. Free.

The DIY Approach: $40–$500 Total

If you want to spend the absolute minimum, you can handle everything yourself:

1. File Articles of Organization directly with your state's Secretary of State website.
2. Apply for your EIN at IRS.gov.
3. Download a free operating agreement template.
4. Be your own registered agent (if your state allows it and you have a qualifying address).

Total cost: just the state filing fee. The downside: you are responsible for getting everything right, and you have no registered agent privacy (your personal address goes on public records).

The Value Approach: $69–$529 Total

Using an affordable formation service like Sedes ($29) or Northwest ($39) adds a small amount to your total cost but provides:

• Professional filing (they catch errors before submission)
• Registered agent service (keeps your address private)
• Operating agreement (customized at Sedes, template at most services)
• EIN filing (Sedes handles this for you)
• Compliance reminders

For $29 on top of your state fee, you get peace of mind that everything was filed correctly and your personal address stays off public records.

What to Avoid

• $0 formation bait. If the formation is $0, the upsells are where they make money. Read the total cost carefully.
• Paying for EIN filing. It is free. Period.
• Annual compliance packages. Most states only require an annual report (one form, once a year). You do not need a $99/year service for this.
• Forming in a "cheap state" when you live elsewhere. You will end up paying fees in two states and managing double compliance.

The Bottom Line

The cheapest LLC formation is DIY in a low-fee state like Kentucky ($40) or Colorado ($50). The best value is using an affordable service like Sedes ($29 + state fee) that bundles everything you need without the upsells. And the most expensive option, ironically, is often the one that advertises "$0 formation."