Known more commonly as LLC, a limited liability company is a business structure used in the United States that allows business owners to avoid liability. This means that any liabilities or debts incurred by a company under an LLC cannot be tied back to the owner.
Although most limited liability companies have the characteristics of a corporation, they can be owned by a sole proprietor, a partnership, or more than two people. LLCs are known to be a wonderful option in the business world. Despite this, similar to everything in life, there is a cost to maintain an LLC.
Having an LLC gives you the peace of mind that your personal possessions will be separate from your business assets. This means that in the event your business went bankrupt under an LLC, your house, vehicle, and other investments would be safe.
Essentially, forming your business under an LLC protects you against liabilities that could compromise your personal financials. It can also protect against lawsuits or accidents.
If you have no personal assets other than a vehicle, then you most likely do not need to form an LLC for your company. On the other hand, if you own a home, other businesses, property, stocks, or investments, you definitely should form an LLC. This will also help you to do your taxes separately, and protect your personal assets overall.
LLC state filing fees are different based on where you live, but they are always paid only one time during the formation of your LLC. They range between $40 and $500, with the average filing fee in the United States being $132 in 2020. In Wyoming, the filing fee is $100 to start an LLC. Besides the state's filing fees, there are also other costs to consider.
The LLC annual fee is also different depending on which state your LLC is formed in. If you are not sure which state to file in, then do so in your home state.
Expect to pay anywhere from $50 to $500 for an annual fee, with it being a $50 minimum in Wyoming as of 2020. Annual LLC fees are extremely important. If you want to stay in compliance and in good standing, then you will need to pay your annual fee.
Although you do not have to operate under a fictitious name, many LLCs choose to do so. This name is also known as a DBA (doing business as). When applying for a name other than your legal LLC name, you will need to file an application and pay another filing fee. The total cost may only be $10, but can be as much as $200. Typically you should expect to pay around $50 to $100.
It is important to note that all fees vary based on the state the LLC was formed in. This means that if you formed your LLC in California, you will be subject to the $800 annual filing fee, versus if you decided to file in Wyoming, your annual fee would only be $50.