Starting a business is one of the most exciting—and daunting—journeys you’ll ever take. But what if I told you that forming an LLC (Limited Liability Company), the gold standard for small business structures, doesn’t have to break the bank? In this guide, you’ll learn exactly how to start an LLC in any U.S. state for less than $100—even if you’re on a shoestring budget. No fluff, no upsells, just actionable steps to legally protect your business and personal assets while keeping costs low.
Let’s dive in.
Why an LLC? The Benefits You Can’t Ignore
Before we get into the nitty-gritty of forming an LLC, let’s talk about why this structure is worth your time:
- Personal Asset Protection: Separate your personal finances (your home, car, savings) from business debts or lawsuits.
- Tax Flexibility: Choose to be taxed as a sole proprietorship, partnership, or corporation.
- Credibility: An LLC makes your business look professional to clients and partners.
- Simplicity: Less paperwork than a corporation, with fewer ongoing formalities.
But here’s the kicker: Many entrepreneurs overpay for LLC formation because they don’t know the DIY secrets. Let’s fix that.
Myth-Busting: “You Need $500+ to Start an LLC”
Online services like LegalZoom or IncFile charge $0–$300+ plus state fees to form an LLC. But guess what? You don’t need them. By filing directly with your state and handling tasks yourself, you can slash costs to under $100 in most states.
Here’s the truth:
- State fees vary wildly (from $40 in Kentucky to $500 in Massachusetts).
- DIY is cheaper—if you know how to avoid unnecessary add-ons.
- Timing matters: Some states offer discounts for online filings.
Ready to save hundreds? Let’s break it down.
Step 1: Choose Your State Wisely (Not All States Are Created Equal)
You can form an LLC in any state, regardless of where you live. But if you’re on a budget, your home state is usually the cheapest option. Why?
- No double fees: If you form in Wyoming but live in California, you’ll pay Wyoming’s $100 filing fee and California’s $800 annual franchise tax. Ouch.
- Local compliance is easier: Registered agents (more on this later) cost extra if you form out-of-state.
Exceptions: If you’re launching an online business or want privacy, states like Wyoming, New Mexico, or Delaware offer low fees and anonymity. But for most beginners, home state = simplest and cheapest.
Step 2: Name Your LLC (Without Paying for a Trademark)
Your LLC name must:
- Include “LLC” or “Limited Liability Company.”
- Be unique in your state.
Pro Tips to Save Money:
- Search your state’s business database (free) to check name availability.
- Avoid trademarks: Use the USPTO’s free Trademark Electronic Search System (TESS) to ensure you’re not infringing on someone else’s brand.
- Skip the “Doing Business As” (DBA): If you love a name that’s already taken, you could file a DBA—but this costs $10–$50. Instead, brainstorm a unique name from the start.
Step 3: Appoint a Registered Agent (For Free or $0–$50/Year)
A registered agent receives legal documents for your LLC. Most states require one.
Cost-Saving Options:
- Be your own agent (free in most states). Catch: You must be available during business hours at a physical address.
- Use a friend or family member (free).
- Hire a service ($50–$150/year). Bargain options include Northwest Registered Agent ($125/year) or better yet—check for new customer discounts.
Step 4: File Your Articles of Organization (The Heart of Your LLC)
This is the official document that creates your LLC. Costs range from $40–$500 depending on the state.
How to File Cheaply:
- File online: Many states discount online filings (e.g., Arizona charges $50 online vs. $85 by mail).
- Avoid expedited processing: Unless you’re in a hurry, skip the $50–$100 rush fee.
- Check for low-fee states: Examples:
- Kentucky: $40
- New Mexico: $50
- Iowa: $50
- Arkansas: $45
Template Alert: Most states provide free Articles of Organization templates. Google “[Your State] LLC Articles of Organization PDF” to find yours.
Step 5: Draft an Operating Agreement (Free Templates Inside)
An Operating Agreement outlines how your LLC runs. While not required in most states, it’s critical for:
- Clarifying ownership percentages.
- Avoiding disputes.
- Strengthening your liability protection.
Cost: $0 if you use a free template from LawDepot or Rocket Lawyer. Customize it yourself—no lawyer needed for a single-member LLC.
Step 6: Get an EIN (Your Business’s Social Security Number)
An Employer Identification Number (EIN) is free from the IRS and takes 10 minutes to get online. Use it to:
- Open a business bank account.
- Hire employees.
- File taxes.
Beware of Scams: Third-party sites charge $50–$100 for this free service. Go directly to IRS.gov.
Step 7: Licenses, Permits, and Compliance (State-Specific)
Most LLCs need a general business license ($25–$100). Check your city/county website for local requirements.
Pro Hack: Use the Small Business Administration’s (SBA) free License & Permit tool to find what you need.
Cost Breakdown: How to Stay Under $100
Let’s crunch numbers for a budget-friendly LLC:
- State Filing Fee: $40 (e.g., Kentucky)
- Registered Agent: $0 (yourself)
- Operating Agreement: $0 (free template)
- EIN: $0
- Business License: $50 (varies)
Total: $90
Boom—you’ve formed an LLC for under $100.
State-by-State Fee Cheat Sheet
| State | Filing Fee | DIY Total Cost |
| Kentucky | $40 | $40–$90 |
| New Mexico | $50 | $50–$100 |
| Arizona | $50 | $50–$100 |
| Mississippi | $50 | $50–$100 |
| California | $70 | $70–$120 |
Note: California has a $20 annual report fee; factor in ongoing costs.
Case Study: Sarah’s $87 LLC in Tennessee
Sarah, a freelance graphic designer, formed her LLC in Tennessee:
- Articles of Organization: $50 (online filing).
- Registered Agent: Herself ($0).
- Operating Agreement: Free LawDepot template ($0).
- Business License: $37 (Knoxville).
Total: $87.
She now runs her business legally, protects her assets, and looks professional to clients—all for less than a fancy dinner out.
Common Mistakes That Inflate Costs
- Paying for Expensive Services: You don’t need a lawyer to form a simple LLC.
- Ignoring Annual Fees: States like California charge $800/year. Budget accordingly.
- Skipping the Operating Agreement: Without it, courts may disregard your LLC’s liability protection.
Tools & Resources
- Free Articles of Organization Templates: [Your State] Secretary of State website.
- Operating Agreement Generator: LawDepot.com.
- IRS EIN Application: IRS.gov.
- Business License Search: SBA.gov/local-assistance.
FAQs
Q: Can I form an LLC for free?
A: No—state fees are mandatory. But you can minimize other costs.
Q: How long does it take?
A: 3–14 business days if filing online.
Q: What if I can’t afford $100?
A: Some states (like Arkansas) offer hardship waivers for low-income applicants.
Final Thoughts
Forming an LLC for less than $100 isn’t just possible—it’s straightforward if you cut through the noise. By filing yourself, using free templates, and choosing a budget-friendly state, you’ll protect your assets, gain credibility, and keep more money in your pocket.
Your dream business is waiting. Take the leap today—without breaking the bank.
