The True Cost of an LLC: Year 1 + Year 2 (No Fluff)
Quick answer: Forming an LLC costs $50–$500 in year 1 depending on your state and service. Year 2 costs $100–$300 more due to state renewal fees and registered agent renewals — costs the advertised price never includes. This page shows you the full math.
We earn commissions from some links — it never changes our verdicts or what you pay. See our methodology. Last updated: June 2026 · By LLCVerdict Editorial
Why the Advertised Price Is Almost Never the Real Price
“Form your LLC for $0!” sounds good. But by the time you’re done with year 1, you’ve paid your state filing fee, a registered agent fee (required in every state), and whatever add-ons the service quietly enrolled you in. Year 2 hits with a surprise: RA renewal, state annual report fee, and maybe a compliance subscription you forgot you opted into.
We built this page to give you the actual total — not the teaser number. Per-service, per-state, no spin.
What Makes Up the Real Cost of an LLC?
Before the breakdown, here’s every line item that can hit you:
| Cost Component | When | Who charges it | Typical range |
|---|---|---|---|
| Formation service fee | Year 1 | Formation service | $0–$149 |
| State filing fee | Year 1 | Your state | $35–$500 |
| Registered agent (RA) | Year 1 + every year after | Formation service or RA service | $0–$299/yr |
| EIN (federal tax ID) | Year 1 | IRS (free if you do it yourself) | $0 or $79 if service charges |
| Operating agreement | Year 1 | Service or DIY | $0–$99 |
| Compliance/annual report | Year 2 | State + sometimes service | $25–$300 |
| State annual report fee | Every year | Your state | $0–$300 |
| Upsell add-ons (Worry-Free, etc.) | Year 1 checkout | Formation service | $0–$199/yr |
The three costs that blindside most founders: 1. Registered agent renewal — your RA fee is annual. If you used a “free” service that bundled RA for year 1, year 2 triggers the renewal at full price ($119–$299). 2. State annual report fee — most states charge an annual fee to keep your LLC active. Miss it and your LLC gets dissolved. 3. Auto-renewing compliance subscriptions — ZenBusiness’s “Worry-Free” auto-renews at $199/yr. Bizee’s RA renews at $119/yr. These are easy to miss at checkout.
True Cost: Per-Service Breakdown (Year 1 + Year 2)
We use Wyoming ($100 state fee) as a standard baseline because it’s a common recommended state. Your actual state cost will vary — see the state fee table below.
Northwest Registered Agent — Verdict Score 9.2 ✦ Our #1
What they advertise: $39 + state fee
What you actually pay:
| Year 1 | Year 2 | |
|---|---|---|
| Formation fee | $39 | — |
| State fee (Wyoming) | $100 | $52/yr |
| Registered agent | Included year 1 (normally $125/yr — bundled) | $125/yr |
| EIN | $0 (DIY) or $79 (add-on) | — |
| Operating agreement | Included (basic) | — |
| Compliance subscription | None pushed | — |
| Total (Wyoming, no add-ons) | ~$139 | ~$177 |
Hidden fee risk: Low. Northwest is the only major service that does not push compliance subscriptions or auto-renewing add-ons at checkout. RA renews at $125/yr — that’s clearly disclosed and reasonable for the service level (real human support, privacy-first mail handling). The year-1 RA bundling is a genuine value.
Bottom line: $139 year 1 (Wyoming baseline), $177 year 2. Predictable, no surprises.
ZenBusiness — Verdict Score 8.0
What they advertise: $0 + state fee (Starter plan)
What you actually pay:
| Year 1 | Year 2 | |
|---|---|---|
| Formation fee | $0 (Starter) | — |
| State fee (Wyoming) | $100 | $52/yr |
| Registered agent | Not included on $0 plan → $199/yr add-on | $199/yr |
| EIN | Included on Pro ($199) or add-on | $0 if DIY |
| Worry-Free Compliance | Auto-enrolled unless you opt out (~$199/yr) | $199/yr if kept |
| Total (Wyoming, Starter + RA, no Worry-Free) | ~$299 | ~$251 |
| Total if you don’t opt out of Worry-Free | ~$498 | ~$450 |
Hidden fee risk: Medium-High. The Worry-Free Compliance plan auto-renews at $199/yr. At checkout, it appears pre-selected. You can opt out — but many people don’t notice. This is ZenBusiness’s single biggest complaint driver. The $0 formation advertised requires RA to be added separately ($199/yr) or you pick the Pro plan ($199/yr) which bundles it.
Opt-out instruction: On the checkout page, locate “Worry-Free Guarantee” or “Compliance Service” and toggle it off before paying.
CorpNet — Verdict Score 8.8
What they advertise: $99 + state fee
| Year 1 | Year 2 | |
|---|---|---|
| Formation fee | $99 | — |
| State fee (Wyoming) | $100 | $52/yr |
| Registered agent | Not included — $159/yr add-on | $159/yr |
| EIN | Included or add-on | — |
| Compliance add-ons | Available but not aggressively pushed | — |
| Total (Wyoming + RA) | ~$358 | ~$211 |
Hidden fee risk: Low. CorpNet has zero BBB complaints in 26 years of operation — the cleanest track record in the industry. Note there is a 3% processing fee on credit card payments. Higher upfront than Northwest but operationally clean.
LegalZoom — Verdict Score 7.0
What they advertise: $0 + state fee (Basic plan)
| Year 1 | Year 2 | |
|---|---|---|
| Formation fee | $0 (Basic) | — |
| State fee (Wyoming) | $100 | $52/yr |
| Registered agent | ~$249/yr | $249/yr |
| EIN + operating agreement | Often bundled in upsell packages | — |
| Business license research | $99–$249 (frequently pushed) | — |
| Total (Wyoming + RA, no extras) | ~$349 | ~$301 |
Hidden fee risk: High. LegalZoom has 1,469 BBB complaints in 3 years — the most of any service we reviewed — and a pattern of subscription enrollment complaints. The checkout experience includes multiple upsells. Legal plans that auto-renew are a recurring complaint. None of this disqualifies LegalZoom for people who want their attorney-consultation features, but go in with eyes open.
Bizee (formerly Incfile) — Verdict Score 6.0
What they advertise: $0 + state fee
| Year 1 | Year 2 | |
|---|---|---|
| Formation fee | $0 | — |
| State fee (Wyoming) | $100 | $52/yr |
| Registered agent | Included free year 1 | $119/yr |
| EIN | Add-on | — |
| Total year 1 (Wyoming) | ~$100 | ~$171 |
Hidden fee risk: Medium. The year-1 “free” RA is a known loss-leader. Year 2 RA at $119 auto-renews. Bizee holds an F BBB rating due to unresolved complaints — not a takedown, just a fact you should weigh. The platform works for many people; the trust floor is lower than competitors.
The “$0 Formation” Reality Check
Every service advertising “$0 formation” means: $0 service fee + your state fee + upsells. There is no such thing as a free LLC. Here’s what “$0” actually costs in practice:
- Bizee $0 plan (Wyoming): $100 in year 1 (state only) → $171 year 2 (state + $119 RA).
- ZenBusiness $0 Starter (Wyoming): $100 year 1 without RA → $299 if you add RA → $498 if Worry-Free isn’t opted out.
- LegalZoom $0 Basic (Wyoming): $100 year 1 without RA → $349 with RA.
The $39 service (Northwest) costs less in year 1 than most “$0” services once you include RA — which is required in every state. This is not an accident; it’s the math the advertised price obscures.
State Filing Fees: What Your State Actually Charges
State fees are unavoidable regardless of which service you use. These are paid to the state, not the service.
| State | Filing Fee | Annual Report Fee | Notes |
|---|---|---|---|
| Wyoming | $100 | $52 | Popular for privacy + low cost |
| Delaware | $110 | $300 franchise tax | Popular for investors |
| New Mexico | $50 | $0 annual report | Cheapest ongoing, but no RA requirement |
| Nevada | $75 | $200+ | Popular but higher ongoing costs |
| California | $70 | $800 franchise tax/yr | High ongoing; required if you operate in CA regardless |
| Texas | $300 | $0 (but public info report) | Higher filing, lower ongoing |
| New York | $200 | $9/yr BUT mandatory publication $300–$1,750 | Major gotcha — see below |
| Florida | $125 | $138.75/yr | Common for online businesses |
All state fees marked “verify” — these change and should be confirmed at your state’s Secretary of State website before filing.
Two State Gotchas That Can Double Your Cost
New York: The Publication Requirement ($300–$1,750)
If you form an LLC in New York, state law requires you to publish a notice in two newspapers for six weeks. This costs $300–$1,750 depending on county. Manhattan (New York County) hits $1,750+. You cannot skip it — failure to publish can result in your LLC’s authority being suspended.
If you live in NY: Factor this in from day one. Some formation services will handle it (for a fee). If you use a service that doesn’t mention it, that’s a red flag.
If you don’t live in NY: Don’t form in NY to avoid it.
California: The $800 Minimum Franchise Tax
California charges every LLC a minimum $800/year franchise tax, due the first year of operation (with some nuances). If you operate your business in California, you owe this regardless of whether you formed your LLC in Wyoming, Delaware, or California — and you’ll need to register as a foreign LLC in CA, paying both states’ fees.
The Wyoming trick doesn’t work if you live and operate in California. You pay Wyoming fees AND California fees AND California’s $800 tax. It costs more, not less.
The Wyoming-but-Live-Elsewhere Trap
This is the most expensive misunderstanding in LLC formation. Forming in Wyoming when you live in Texas means: – Wyoming state fee: $100 – Wyoming RA: $125/yr (Northwest) or similar – Texas foreign LLC registration fee: ~$750 – Texas RA: another $125/yr
You’re paying for two states instead of one, and the “tax savings” Wyoming offers don’t apply to most small business owners who pay income tax in their home state regardless.
Rule of thumb: Unless you have a specific legal reason (multi-state operations, investor preference for Delaware, specific Wyoming privacy benefit), form in your home state.
Add-Ons: What to Buy vs What to Skip
| Add-on | Service charges | Our take |
|---|---|---|
| EIN (federal tax ID) | $49–$79 | Skip — file free at IRS.gov in 10 minutes |
| Operating agreement | $0–$99 | DIY for single-member LLCs (templates free online); buy if multi-member |
| Annual report filing service | $49–$99/yr | Worth considering if your state has complex filings; otherwise DIY |
| Worry-Free Compliance (ZenBusiness) | $199/yr | Opt out unless you have complex compliance needs |
| Business license research | $99–$249 | Skip — your county/city website has this free |
| Certified copy of articles | $30–$75 | Only buy if a bank/partner specifically requires it |
| Certificate of good standing | $30–$75 | Only buy if specifically required; obtainable directly from your state |
Year 3+ Costs: What Most Guides Don’t Mention
Most guides stop at year 2. Here’s the honest long-term view.
After year 2, your costs stabilize into a predictable annual pattern:
- State annual report fee: paid to your state to keep your LLC in good standing. This varies from $0 (New Mexico, no annual report) to $800+ (California franchise tax). Wyoming is ~$52/yr. Most states fall in the $25–$200 range.
- Registered agent: $49–$299/yr depending on service. Northwest is $125/yr.
- Any retained add-ons: if you kept a compliance service, it renews annually.
The two things that add unexpected cost in years 3–5:
- State fee increases. States periodically raise filing fees and annual report amounts. What costs $52 today may cost $65 in three years. Budget for 5–10% annual increases.
- Foreign LLC registration if you move states. If you formed in Wyoming and then move to California or New York, you’ll need to register as a foreign LLC in your new operating state — and pay that state’s fees too. This is the most common surprise cost for LLC owners who’ve been operating for a few years.
What Happens If You Miss the Annual Report
Your LLC doesn’t just get a late fee — in most states, it gets administratively dissolved. This means:
- Your LLC is no longer a legal entity in that state
- Any contracts you signed as the LLC may be questioned
- Reinstating costs extra: reinstatement fees typically run $25–$200 above the normal annual fee (verify your state)
- In some states, you lose your LLC name and someone else can register it
The fix: set a calendar reminder for 60 days before your annual report due date. Most states publish due dates on their Secretary of State website. Northwest and other RA services send reminders, but don’t rely on a vendor reminder as your only failsafe.
How We Calculated These Costs
Our methodology:
- We used Wyoming ($100 state fee, ~$52/yr annual report) as the standard baseline because it’s the most commonly recommended non-home state and gives a clean comparison.
- Formation service fees are the standard listed prices as of June 2026. Sale prices and promotional rates were not used.
- Registered agent fees are the standard renewal rates — not the discounted or bundled year-1 rate.
- We excluded optional add-ons from the base totals but listed them separately so you can add them if relevant.
- State fees marked “” should be confirmed directly with your state’s Secretary of State before filing.
This page is updated periodically. If you notice a price change, contact us (verify link) and we’ll verify and update.
How to Minimize Your True Total Cost
- Use Northwest ($39) — the RA is included year 1, no upsells, year-2 cost is predictable at $125 RA + state.
- Get your EIN free from IRS.gov — takes 10 minutes, it’s free, every service charging for it is charging for convenience only.
- Opt out of Worry-Free/compliance add-ons at checkout — save $199/yr from day one.
- Form in your home state unless you have a specific legal reason not to — avoids double-registration fees.
- Set a calendar reminder for your state’s annual report deadline — missing it costs reinstatement fees or LLC dissolution.
- Write your own operating agreement for single-member LLCs — free templates exist and are sufficient for most situations.
- Audit your LLC-related subscriptions every January — list every annual fee tied to your LLC and decide whether each one is still earning its cost.
FAQ
How much does it cost to form an LLC?
The total year-1 cost ranges from $100 (state fee only, if you use a $0 service and skip RA) to $400+ depending on your state and service. A realistic year-1 total using Northwest (our top pick) in Wyoming is approximately $139. In California, add $800 franchise tax. In New York, add $300–$1,750 publication requirement.
What is the cheapest way to form an LLC?
The cheapest formation is to file directly with your state (no service fee, just the state fee). This works — states make it straightforward. If you want help, Northwest at $39 is the cheapest reputable service once you account for the included year-1 RA. See our cheapest LLC formation guide for a full comparison.
What hidden fees should I watch for?
The biggest hidden costs are: (1) registered agent renewal fees in year 2 (usually $119–$199/yr), (2) auto-renewing compliance subscriptions like ZenBusiness’s Worry-Free, (3) EIN charges (always free from the IRS directly), (4) state publication requirements (New York), and (5) California’s $800 franchise tax.
Is there a yearly fee for an LLC?
Yes — two types. Your state charges an annual report fee or franchise tax to keep your LLC in good standing (varies by state, $0–$800+). If you use a registered agent service, that renews annually ($119–$299). Budget at least $52–$175/yr for the ongoing costs of an active LLC.
How much does registered agent service cost?
Most registered agent services charge $49–$299/yr. Northwest charges $125/yr. This fee is unavoidable unless you serve as your own RA (possible in some states if you have a physical address in the state). For more detail, see our best registered agent services guide.
What does it cost to maintain an LLC each year?
Year 2 and beyond: state annual report fee ($0–$300) + registered agent ($0 if you’re your own, $49–$299 if using a service) + any compliance subscriptions you’re enrolled in. For most small businesses using a service like Northwest in a low-fee state, budget $150–$200/yr.
Is forming an LLC worth the cost?
For most small business owners earning $30,000+ from their business, yes — the liability protection and tax flexibility are worth the cost. For very early-stage side hustles under $10–15k in revenue, the cost may outweigh the benefit. See our do I need an LLC guide for a full decision framework.
Can I form an LLC myself to save money?
Yes. Every state allows you to file directly. You’ll need to handle the articles of organization, registered agent appointment, and EIN yourself. It’s not hard but does require a few hours of research per your specific state’s requirements.
See Also
- Best LLC Formation Services (2026) — ranked by Verdict Score
- Cheapest LLC Formation: $0 vs $39 vs DIY — cost-focused comparison
- Best Registered Agent Services (2026) — if you’re shopping RA separately
LLCVerdict earns affiliate commissions when you use our links — it does not change our rankings or what you pay. Verdict Scores are assigned by our editorial team based on price transparency, speed, support, RA value, and UX. State fees marked “” should be confirmed at your state’s Secretary of State website before filing.