You have to always consider all expenses when it comes to running a business. Setting up an LLC does add to the expenses, but is it as expensive as you think it is? Here are a few points to consider before you start the process of an LLC.
How much does it cost?
It is all down to the state that you are applying for. Each state has a different fee for filing, which can range between $40 to $500. However, you would also need to pay annual fees for your LLC in order to keep it active. You can get more info on how much it would cost to form an LLC in the state you are in online.
Are there any additional costs?
There are some states such as New York, Nebraska and Arizona, that require you to publish a statement of formation in a local newspaper, once you have formed your LLC. When it comes to publishing costs, you can be looking at anywhere between $40 to $2000, depending on what they require. Whereas if you set up an LLC in Alabama, you are required to pay a fee between $10 – $28, in order to reserve your name for your LLC.
When filing annual and biannual reports you will also have to pay a small fee for that. In some states you are also required to pay a franchise tax, which is flat tax. There is an extra load of paperwork and maintenance costs when it comes to applying for an LLC in a different state.
How can I save money?
The best advice to give is to apply for an LLC in the current state that you are doing your business in. It will decrease the maintenance costs and expenses too. If you choose a registered agent that doesn’t increase the annual costs for upselling, you can also maintain your finance that way. They can help you maintain your costs, handle your annual reports and give you the full customer service that you need without any extra catches or costs.
If you get an EIN, it can help you maintain your costs under your LLC business. By getting an EIN, you are able to set up a business bank account which can allow you to have control over your business finances. That way you can manage and maintain all costs needed for your LLC. When you set up your operating agreement under your LLC, you can organise clearly which member has which role, which then forms a structure and you don’t have to pay any extra costs.
Another way to save money is to apply for the LLC on your own. This means that you don’t hire help from an organisation to guide you and apply for the LLC for you. If you do it on your own, you will save money. Another way of saving money is to be a self registered agent, since you don’t need to hire help.
Getting an LLC can help you in many ways as a business owner. You get to pay flexible taxes, you get to separate your assets which protects you, you can apply for certain business insurance and worker’s insurance, you can make your business name official and you can get professional help who can help with the workload. However, it can also be expensive depending on the state that you choose to apply in. You can avoid that by applying in a cheaper state such as Illinois, but you will still have to pay the difference with the maintenance costs and additional fees. The best way to make a decision as to whether it is suitable for your business to get an LLC or not is to look further into the state you wish to apply for and how much it costs to pay for the state fee for filing.