How Much Does It Cost to Register a Company in the USA?
Starting a business is a big step, and one of the first questions you might have is, “How much will it cost me to register a company in the USA?” It’s a smart question because understanding the costs will help you plan better and avoid surprises. Whether you’re thinking of forming an LLC, a corporation, or another type of business, knowing the costs is essential. Let’s break it down step by step.
The cost to register a company in the USA typically ranges from $50 to $500, depending on the state you choose. Additional services, like a registered agent, can cost $35 to $120 per year. Expect annual reports or other fees ranging from $10 to $100.
What Are the Costs of Registering an LLC?
An LLC (Limited Liability Company) is one of the most common business structures in the USA. People like it because it’s simple and offers some protection for personal assets. But what will it cost you?
- State Filing Fees
This is the main cost of registering an LLC. Filing fees vary depending on the state. For example, in Kentucky, it costs as little as $50, while in Massachusetts, it can go up to $500. Most states charge somewhere between $100 and $300. - Registered Agent Fees
A registered agent is someone who handles official mail and legal documents for your business. You can act as your own registered agent, but many people choose to hire a service. These services typically cost between $35 and $120 per year. - Ongoing Annual Fees
Some states require LLCs to file annual reports or pay yearly fees to stay active. These fees can range from $10 to $100, depending on the state. For instance, California charges an annual franchise tax of $800, while other states, like Arizona, don’t have an annual fee at all.
What About Registering a Corporation?
If you’re thinking about forming a corporation instead of an LLC, the costs are similar in some ways but can also be higher.
- Incorporation Fees
Just like LLCs, corporations have to pay state filing fees. These fees vary but are usually in the $50 to $500 range. Delaware and Nevada are popular states for corporations, and while they may have low initial fees, their ongoing costs can be higher. - Bylaws and Operating Agreements
While not always required, creating bylaws or an operating agreement for your corporation may involve additional costs if you hire a professional to draft these documents. - Registered Agent and Ongoing Fees
Corporations also need a registered agent, and the costs are the same as for an LLC—$35 to $120 annually. Many states also require corporations to file annual reports or pay franchise taxes.
What Else Should You Consider?
Sometimes there are extra costs that people don’t think about. Here are a few things to keep in mind:
- DBA Fees (Doing Business As)
If you want to operate your company under a name that’s different from its legal name, you may need a DBA. Filing for a DBA usually costs between $10 and $100, depending on your location. - Business Licenses and Permits
Some businesses need special licenses or permits to operate legally. The cost varies depending on the industry and location. A small, local license might only cost $20, but a more specialized permit could run you hundreds of dollars. - Professional Services
If you hire a lawyer or use an online service to help you register your business, expect to pay additional fees. Online services like LegalZoom or ZenBusiness can charge between $50 and $300 for their packages. - EIN (Employer Identification Number)
The good news is that getting an EIN from the IRS is free. However, some services might charge you for helping with the process.
Can You Save Money By Doing It Yourself?
Yes, you can save money if you handle the paperwork yourself. Many states have websites where you can file online. If you’re comfortable reading instructions and filling out forms, this might be the cheapest option for you. But remember, small mistakes can lead to delays or extra costs, so it’s not a bad idea to get professional help if you’re unsure.
Which State Is the Cheapest to Register a Company?
Some states are known for their low filing fees and business-friendly policies. For example, Kentucky and Arkansas have some of the lowest LLC filing fees, starting at just $50. On the other hand, states like California and Massachusetts can be much more expensive, both upfront and in ongoing costs.
If you don’t plan to physically operate in a specific state, you might consider registering your business in a state with lower fees. However, if you’re running your business from your home state, it’s often easier and more practical to register there.
How Much Should You Budget Overall?
Let’s say you want to form an LLC and keep everything simple. Here’s a rough breakdown of what you might spend:
- State filing fee: $100 (average)
- Registered agent service: $50 per year
- Annual report fee: $25 per year
- Optional services (e.g., legal help): $100
In this case, you’re looking at around $275 in the first year and about $75 to $100 each year after that. Of course, this is just an estimate, and your actual costs may be higher or lower depending on your state and the services you choose.
Key Points to Remember
- State filing fees for registering a company range from $50 to $500, depending on the state.
- Hiring a registered agent service costs $35 to $120 per year, but it’s optional.
- Ongoing costs like annual reports or franchise taxes can range from $10 to $100.
- DBAs, business licenses, and professional services may add extra costs.
- Doing it yourself can save money but might be challenging if you’re unfamiliar with the process.
