Google ‘form an LLC’ and you’ll drown in ads from services charging $300+ for what is, in most states, a $50-$150 filing you can do yourself in 20 minutes. The LLC industry thrives on making a simple process sound complicated and scary. It’s not.
Here’s the actual cheapest way to form an LLC in every price tier, which states are cheapest (and the catch with the famous cheap ones), and the upsells to decline. Total honest cost: usually $40-$200 all-in.
The Cheapest Path: DIY Filing (20 Minutes)
1. Go to YOUR state’s Secretary of State website (not a formation service — the actual .gov site). Every state has online LLC formation; search ‘[your state] secretary of state LLC filing.’
2. File the Articles of Organization: your LLC name, registered agent (can be you), business address, and organizer. Takes 10-20 minutes.
3. Pay the state filing fee. That’s it — you’re formed. Processing takes 1 day to 2 weeks depending on the state.
Total cost: exactly the state fee. No service charges, no upsells, no ‘processing fees.’ The form is designed for non-lawyers; if you can file taxes, you can file this.
State Fees Compared (2026)
Cheapest states: Kentucky ($40), Arkansas ($45), Colorado ($50), Iowa ($50), Mississippi ($50). Most states: $100-$200. Notable: California ($70 filing BUT $800/year franchise tax — the ‘cheap filing’ trap), Texas ($300 filing, no annual fee), New York ($200 filing + publication requirement $300-$1,500 in some counties — budget for this).
The Delaware/Wyoming myth: gurus push forming in Wyoming ($100, no state income tax, privacy) or Delaware regardless of where you live. For a small business operating in your home state, this usually means paying TWO states’ fees (formation state + registering as a ‘foreign LLC’ where you actually operate). Unless you have specific asset-protection reasons, form where you live and work.
Annual costs matter more than filing fees: compare your state’s annual report fee + any franchise tax. A $50 filing with a $300 annual fee costs more over 3 years than a $200 filing with $0 annual fee.
When a Formation Service Is Worth It (Rarely)
Honest assessment: most services ($100-$300 + state fees) do what takes you 20 minutes. Their value is convenience and reminders, not expertise. If $150 saves you from procrastinating for 6 months, it’s worth it — but know what you’re buying.
If you use one: Northwest Registered Agent ($39 + state fees) is the least upsell-y and includes a year of registered agent service. Avoid the big advertisers’ $300+ packages with ‘operating agreement templates’ and ‘banking resolution’ fluff — you don’t need those from them.
What you actually need beyond filing: an EIN (free from IRS.gov, 5 minutes), an Operating Agreement (free templates online; required in some states, smart everywhere), and a business bank account. None require a formation service.
Hidden Costs and Upsells to Decline
Registered agent services ($100-$300/year): YOU can be your own registered agent for free in most states (requirements: physical address in the state, available during business hours). Pay for one only if you need privacy (home address stays off public records) or you’re rarely available.
‘Compliance packages’ and annual report filing services: your state’s annual report takes 5 minutes online. Don’t pay $100/year for a calendar reminder.
Business license upsells: some services sell ‘license research packages’ for $100+. Your city/county website lists requirements free — or call the clerk’s office; they’re helpful.
Publication requirements (AZ, NE, NY): real and mandatory where they exist, but arrange the newspaper publication yourself — services mark it up 3x.
After Formation: The 5 Free/Cheap Essentials
EIN from IRS.gov (free, 5 min) — required for business bank accounts and hiring.
Operating Agreement (free template, customized) — defines ownership and operations. Single-member LLCs: still get one; courts respect formalities.
Business bank account (free options exist — see our freelancer bank account guide) — NEVER commingle personal and business funds; it pierces your liability shield.
Understand your taxes: see our sole proprietor vs LLC comparison and freelancer tax guide.
Required licenses for YOUR business type and locality — check city/county/state requirements (free to look up).
Cheapest States to File (And the Catch)
Filing fees range from $40 (Kentucky) to $500 (Massachusetts). The famous ‘cheap’ states: Wyoming ($100 filing, no state income tax, strong privacy), Delaware ($300 — the startup standard, but overkill for small local businesses), New Mexico ($50 — cheapest with no annual report requirement). But here’s the catch everyone misses: if you LIVE and OPERATE in another state, you must register as a ‘foreign LLC’ there too — paying BOTH states’ fees. The Wyoming LLC for a Texas business costs Wyoming’s fee PLUS Texas registration.
The honest cheapest path: file in YOUR home state. One filing, one annual report, no foreign registration, no registered-agent games. The ‘cheap state’ strategy only saves money for location-independent online businesses with no physical presence — and even then, the registered agent fees ($100-$300/year) often erase the savings. File where you live; it’s cheaper, simpler, and legally cleaner. Our sole proprietor vs LLC guide helps you decide if you even need the LLC yet.
LLC Upsells to Decline
LLC filing services are upsell machines. Decline: the ‘expedited processing’ ($50-$150 extra — standard processing is 1-3 weeks in most states; you don’t need it faster), the ‘operating agreement package’ ($100+ — free templates from your state’s bar association or SCORE work fine for single-member LLCs), the ‘EIN filing service’ ($75 — the IRS issues EINs FREE in 10 minutes at irs.gov), the ‘business license research package’ ($100 — check your city/county sites directly), and registered agent services you don’t need (if you have a physical address in the filing state, be your own agent — free).
What you actually need: the state filing fee + an EIN (free) + an operating agreement (free template) + any required local licenses. That’s it. Total honest cost: usually $40-$200 all-in, as the article says. Anyone quoting $500+ is selling you fear. The process is deliberately simple — states WANT businesses to form. Don’t let middlemen convince you otherwise.
The Bottom Line
File directly with your Secretary of State: $40-$200, 20 minutes, done. Skip the $300 formation packages, be your own registered agent unless you need privacy, and watch out for California’s $800/year and New York’s publication rule. The cheapest LLC is the one you file yourself this week instead of paying someone $300 to do it next month.