If you fail to renew your company in a timely manner, you may be required to refile with the state and repay the initial filing fee. Franchise taxes are often a flat tax but can vary according to the company's earnings in certain states. However, some states also require certain state taxes, known as franchise taxes. Maintenance usually only requires filing an annual or biennial report to keep the state updated with regard to the name, address, and ownership of the company. In addition to the initial filing fee, most states charge a nominal fee to maintain an LLC in the state. All states require an initial filing fee, but beyond that, state laws vary as to what additional costs they require. The primary cost is the state filing fee, which can range from $40 to $500 depending on your state. There are multiple costs that you incur throughout the formation process. Today, however, all fifty states have some sort of statute governing these business structures, making them less costly and less complicated to form than a corporation.īecause each state has its own unique laws, the costs associated with forming an LLC vary. Until 1988, state authorization of these business structures was nonexistent. State law governs the creation, maintenance, and dissolution of an LLC and this practice is fairly new. State Laws and Costs Associated with LLC Formation
Before you begin the formation process, it's a good idea to get a general sense of how much money you need to start your venture. It's the reason why this particular business structure has become an attractive option for individuals looking to start their own business. A limited liability company, or LLC, is a popular type of business structure that has the flexibility of a partnership but the liability protection of a corporation.
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