Topic guide · updated 2026-08-05
What It Costs to Start and Keep a Business
Formation fees, the annual obligations that follow them, and the cash needed to open and survive with no revenue. Including the out-of-state structure most often sold as a saving, which on fees is never one.
Forming a company is cheap. Keeping one is where states differ, sometimes by an order of magnitude, and it is the part almost every comparison leaves out.
The other omission is what costs nothing. An employer identification number is free, an operating agreement is a document you write, and in most states you may act as your own registered agent — three things routinely sold to people who did not need to buy them.
Every fee here comes from a Secretary of State fee schedule, with the page and the date recorded.
The filing fee is the number that matters least
It is paid once. Annual reports and franchise taxes are paid for as long as the entity exists, and in several states the yearly obligation is a multiple of what formation cost. Project five years and the ranking of states often reverses: the cheapest place to form is frequently not the cheapest place to stay. That reversal is the most useful thing a comparison can show, and a static table cannot show it.
Flat fees, and obligations that are formulas
Some states charge a flat annual amount. Others charge on revenue, capital or margin — an amount that depends on figures no calculator knows, and that can be nothing below a threshold and substantial above it. A source that turns a formula into a single number has invented that number. The honest presentation is the published floor, the formula, and a note about what drives it.
Forming out of state
The pitch is familiar: form where the fees are low and the income tax is absent, operate wherever you live. What it buys is two of everything — two filings, two annual reports, and a registered agent you must rent, because you have no address in the state you formed in. It also does not move your tax, which follows where the money is earned. And on fees it cannot come out cheaper, because you carry the home state either way: the second state is added to the bill rather than substituted for it.
The cash to actually open
Formation costs are visible because they are paid once and early. The quiet ones are monthly — rent, insurance, software, minimum marketing — multiplied by however long it takes revenue to cover them. The figure worth planning against assumes no revenue at all for a chosen runway. It is deliberately pessimistic, and it is the one a lender will ask about.
Tools in this topic
Every calculator and explainer in this cluster, each built on verified figures with its official source linked.
LLC cost
What an LLC costs to form and keep, state by state, from fee schedules we verified at each Secretary of State: the filing fee, the annual report and when it is due, franchise taxes that dwarf cheap filing fees, and what forming out of state actually adds. Year-one and multi-year totals, computed rather than tabled.
Startup cost
A line-item budget that keeps the two questions separate: what it costs to open, and what it costs every month to stay open. The headline output is the cash needed to launch and survive a chosen runway with no revenue at all — the deliberately pessimistic figure lenders actually ask about.
Key terms
Frequently asked questions
Over five years, rarely the one with the lowest filing fee — and for most businesses the answer is simply the state you operate in. Forming elsewhere means registering at home as a foreign LLC anyway, so the second state adds cost rather than replacing it.
Official sources for this topic
Every figure and rule referenced above is published by one of these agencies, and each of them — not this site — determines what is actually paid.
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