Type "cheap LLC" into a search bar and you'll get a wall of "$0" and "free" offers. The confusing part: some are genuinely free for the service itself, while others lure you in and recover the cost through pricey renewals or add-ons you didn't realize you were buying. Let's cut through it. Here's what an LLC actually has to cost — and where the cheapest honest path lands.
What an LLC actually costs — required vs. free vs. recurring
Only one cost is truly unavoidable. Most of the rest is free if you do it yourself — and a registered agent is the one ongoing line you choose how to pay.
The one cost you can never avoid: the state filing fee
Every LLC, no matter who files it, requires paying the state's filing fee. This is the government's charge, not the formation service's, and it ranges from about $35 to $500 depending on the state. No legitimate service can waive it — if an ad implies your LLC is totally free, it's glossing over this. The lowest filing fees in the country are Montana at $35 (Montana Secretary of State fee schedule) and Kentucky at $40 (Kentucky Secretary of State fees). Arizona and New Mexico both file at $50. Most guides cite these numbers without linking the source — here are the official ones.
But the filing fee is only the day-one number. What actually determines the cheapest state over time is the annual obligation — and that's where two states with identical $50 filing fees can diverge by hundreds of dollars a year.
The truly cheapest states, by total long-term cost
| State | Filing fee (one-time) | Annual report / tax | Official source |
|---|---|---|---|
| Montana | $35 | $0 — report fee waived through 2027 if filed by Apr 15 ($35 late; normally $20) | sosmt.gov |
| New Mexico | $50 | $0 (no annual report required) | sos.nm.gov |
| Arizona | $50 | $0 (no annual report required) | azcc.gov |
| Kentucky | $40 | $15/year | sos.ky.gov |
| Wyoming | $100 | ~$60/year minimum (asset-based license tax) | sos.wyo.gov |
This is the trap most "cheapest LLC" articles miss: a low filing fee can come with a recurring fee that makes a different state cheaper over five years. New Mexico and Arizona charge $50 once and then nothing ongoing; Wyoming's $100 entry plus ~$60/year adds up. For the absolute lowest lifetime cost, the no-annual-report states (New Mexico, Arizona) and Montana usually win — if you actually operate there. (Your state isn't in this table? Our LLC cost calculator has every state's verified filing and annual fees.) Read the next section before you pick one purely on price.
It's tempting to chase a cheap state, but if you live and operate in one state, forming elsewhere means registering as a "foreign LLC" in the state where you actually do business — paying fees in both places. The cheap-state strategy mainly makes sense for fully online or non-resident businesses. See the worked example below before you do this.
The foreign-LLC trap, with real numbers
Say you live in California and form a "cheap" Montana LLC to save money, then have to register it to do business in California. Here's the actual math, using each state's official fees:
| Path | Year-one cost | What's in it |
|---|---|---|
| Montana LLC → register in California | ~$925+ | Montana filing $35 + CA foreign registration $70 + CA Statement of Information $20 + CA franchise tax $800 — plus you still need a Montana registered agent |
| Form directly in California | ~$890 | CA filing $70 + CA Statement of Information $20 + CA franchise tax $800 |
The cheap-state route costs more, not less: California's $800 annual franchise tax follows you the moment you do business there, no matter where the LLC was formed (California Franchise Tax Board). All you've added is a second filing fee and a second registered agent in Montana. The franchise tax is law, not an optional add-on — you can't structure your way out of it by picking a different formation state. (This is general information, not legal or tax advice; confirm your own situation with a professional.)
What's free if you do it yourself
- The EIN (tax ID). You can get it free directly from the IRS in minutes if you have an SSN. Services charge for the convenience, but you don't have to pay.
- A basic operating agreement. Free templates cover most simple single-member LLCs.
- Filing the paperwork yourself. You can file Articles of Organization directly with your Secretary of State and skip the service fee entirely.
So the absolute rock-bottom path is: file directly with the state yourself, get your own free EIN, use a template operating agreement. Your only cost is the state fee. The catch? You still need a registered agent (a legal requirement), and being your own means putting your home address on the public record — which many founders later regret. See our guide on that trade-off.
The cheapest path that still includes a registered agent
Most people don't want their home address public and don't want to babysit legal mail — so they want a registered agent included. The two cheapest ways to get formation plus a year of registered agent service:
| Route | Day-one cost | Year 2+ |
|---|---|---|
| Bizee Silver | $0 + state fee | ~$119/yr (registered agent) |
| Northwest | $39 + state fee | ~$125/yr (registered agent) |
| DIY (be your own agent) | State fee only | $0, but your address is public |
Bizee is the lowest sticker price — $0 for the formation work (their Silver plan), plus a free first year of registered agent. That $0 is real, but it only stays $0 if you decline the add-ons Bizee offers during checkout. Here's exactly what you'll be asked to add on, and the honest call on each:
- EIN / federal tax ID — decline. Bizee offers to get it for you, but the IRS issues an EIN for free in minutes if you have an SSN. There's no reason to pay a service for it.
- Operating agreement — usually decline. A free template covers a simple single-member LLC. Pay only if your ownership structure is genuinely complex.
- Expedited filing — optional. Standard processing is free; you're paying purely for speed. Skip it unless you have a real deadline.
- Compliance / "worry-free" packages — depends. These bundle annual-report reminders and filings. Helpful for some, but it's a recurring charge, not a one-time fee — know that before you opt in.
Decline all of them and a typical Silver-plan user pays $0 plus the state fee on day one. Add the optional extras and the same checkout can climb to roughly $150 or more before you've filed a thing. Bizee's add-on prices change, so confirm the exact figures in your cart rather than trusting any number an article quotes.
For an extra $39, Northwest adds something the budget route doesn't: they put their address on your public filings instead of yours, and their checkout doesn't pressure you with upsells — so the headline price is close to the price you actually pay. For many founders that's the more honestly "cheap" option once you account for the add-ons they'd have declined anyway.
Here's why the privacy difference is concrete, not theoretical. The address on your Articles of Organization is public and searchable. File your formation yourself (or via Bizee's DIY route) using your home address, and a search for "yourname LLC" can surface that home address to customers, competitors, and the data brokers who scrape state business registries. File with Northwest and the public record shows Northwest's commercial address instead — your home stays off it. Same LLC, same legal protection; the difference is whose address ends up on a permanent public document. You can change a registered agent later, but copies of the old filing are already out there.
Disclosure: we pick Bizee for lowest upfront cost and Northwest for privacy and a no-upsell checkout regardless of any commercial relationship. See how we make money.
The hidden costs to watch for
- Registered agent renewals. The "free" year ends — budget ~$120/year after.
- Annual report / franchise fees. Most states charge yearly to keep your LLC active. Miss them and you can fall out of good standing.
- Add-on creep. EIN, operating agreement, compliance packages, "worry-free" bundles — useful sometimes, but rarely all necessary.
- Expedited filing. Optional. Standard processing is free; you're paying for speed.
Every state requires a registered agent for one reason — to guarantee a fixed address that's available during business hours to accept lawsuits and official state notices (this is set by each state's LLC statute, e.g. California's Corporations Code). The consequence of missing that mail is the part nobody prices in. Miss a served lawsuit and a court can enter a default judgment against you — you lose the case without ever showing up. Miss a state compliance notice and you can fall out of good standing, owe penalties, and pay reinstatement fees. Cleaning up a missed filing or a default judgment can cost far more than a year of registered agent service. Being your own agent saves ~$120/year; if you travel, work from a laptop, or aren't reliably at one address during business hours, that $120 is cheap insurance against a much larger bill. (Not legal advice — see your state's statute or an attorney for specifics.)
Bottom line: the cheapest honest LLC
If you want the lowest possible number and you're comfortable being your own registered agent, DIY through your state and pay only the filing fee. If you want privacy and a registered agent included without paying a service premium, Bizee's $0 plan is the cheapest sticker price, and Northwest's $39 is the cheapest once you factor in the upsells you'd otherwise decline. There's no single 'cheapest' for everyone — but now you know exactly where every dollar goes and which ones you can skip.