The $99 LLC formation ad is the corporate version of a $99 car lease. The price gets you in the door — then come the add-ons. This guide itemizes every cost most formation services and YouTube videos gloss over.
State filing fee (advertised)
Range: $40 (Kentucky) to $500 (Massachusetts). This is the only cost that gets prominent display. Average across all 50 states: ~$132.
Registered agent renewal
Formation services often advertise "free first year registered agent" — then auto-bill $125-$300/year. Northwest Registered Agent and ZenBusiness charge around $125. Bizee renews at $119. Some services renew at $299+ unless you cancel. Always check the renewal price before signing up.
Annual report fees
40+ states require annual or biennial reports. Range: $0 (Idaho, Pennsylvania pre-2025) to $500 (Massachusetts). Late fees are punitive: New York charges nothing for a late biennial report but Florida charges $400 on top of the $138.75 base fee if filed after May 1.
Franchise / privilege / minimum taxes
Often labeled "tax" but really a recurring fixed fee:
- California: $800/year minimum, owed regardless of revenue
- Delaware: $300/year flat LLC tax
- Tennessee: $100 minimum F&E tax (LLCs not disregarded)
- Maryland: $300/year personal property return
- Alabama: $50 minimum Business Privilege Tax
- DC: 8.25% Unincorporated Business Tax on net income over $12k
Publication requirements
Four states require new LLCs to publish a Notice of Organization:
- New York: $400-$2,000 depending on county (Manhattan is highest)
- Arizona: $30-$300 (Maricopa and Pima counties exempt)
- Georgia: $40-$200
- Nebraska: $40-$200
Foreign qualification (if operating outside formation state)
If your LLC operates in a state different from where it is formed, you must "foreign qualify" — pay a second state's filing fee, hire a second registered agent, and file annual reports in both states. A California resident with a Wyoming LLC pays Wyoming's $62 plus California's $800 minimum plus a foreign-LLC registration fee ($70 in California).
EIN application fees (artificial)
The EIN is free from the IRS. Some formation services charge $50-$300 to "obtain" it for you. For residents with an SSN, the online application takes 5 minutes. For non-residents, the fax process is straightforward and free.
BOI compliance gotcha
The Beneficial Ownership Information report is free to file at boiefiling.fincen.gov. Some services charge $99-$299 to "file" it. The form takes 15 minutes. Missing it costs $591/day.
Operating Agreement
Most states do not require an operating agreement, but you need one. Templates run $0-$300. Lawyer-drafted run $500-$3,000. For single-member LLCs, free state-provided templates are usually adequate.
Business licenses (industry- and city-specific)
Cities and counties often require their own business license. Costs range from $25 (most jurisdictions) to $500+ (San Francisco, Los Angeles, Chicago). Some industries (food, alcohol, construction) require additional licensing.
Sales tax registration
If you sell physical goods, you may need to register for sales tax in any state where you have economic nexus (typically $100k revenue or 200 transactions, per state). Registration is usually free, but each state has its own filing cadence and reporting requirements. Software like TaxJar or Avalara helps but adds $30-$300/month.
Bookkeeping and accounting
Not a formation cost, but the first one most founders underestimate. Self-managed via spreadsheet: $0 + time. QuickBooks Online: $30-$200/month. Bench: $299+/month. Local bookkeeper: $100-$500/month. A CPA for year-end tax prep: $400-$2,500.
Realistic 5-year total cost of ownership
For a Wyoming LLC, registered agent, EIN, BOI, operating agreement, basic bookkeeping, and tax prep:
- Year 1: $100 filing + $125 RA + $0 EIN + $0 BOI + $0 operating agreement (free template) + $400 CPA = $625
- Years 2-5: ($62 annual + $125 RA + $400 CPA) × 4 = $2,348
- 5-year total: ~$2,973
For a California LLC operating in California:
- Year 1: $70 filing + $125 RA + $800 franchise + $400 CPA = $1,395
- Years 2-5: ($20 biennial + $125 RA + $800 franchise + $400 CPA) × 4 = $5,360 + $20 every other year ≈ $5,400
- 5-year total: ~$6,795
The "$99 LLC" advertised price was 1.4% to 3.2% of the real five-year cost.