How to start a free LLC in 2025

How to start a free LLC in 2025

No matter what any company says, there's no such thing as a completely free limited liability company (LLC). You're still responsible for covering your state's LLC filing fee, ranging anywhere from $35 to a few hundred bucks. That said, LegalZoom can walk you through the entire formation process and help you file the necessary paperwork at no extra cost.

Here's what to expect.

How to get a free LLC in 3 steps

You can get an idea of the minimum formation cost by looking up your state's LLC filing fee. In most places, you'll find this information through your Secretary of State's (SOS) website.

Then, you can take these steps to start your LLC without any additional costs.

Step 1: Create a plan for your LLC

First, you'll need to make some important decisions about your business—starting with what to name your LLC. It must be unique and not already registered in your state, so you should conduct a business name search to confirm availability.

Next, you should consider how your LLC will be run. In a member-managed LLC, all owners participate in daily operations. With manager-managed LLCs, you designate other people to operate the business.

You'll need all this information to create an operating agreement—one of the most important documents for a new LLC. While not all states require one, it's strongly recommended to draft this agreement and specify the following:

• Your LLC's management structure (i.e., multi-member LLC vs. single-member LLC) and decision-making process
• Clear documentation of each member's ownership percentages, rights, and responsibilities
• Guidelines for handling profits, losses, and distributions between members
• Procedures for adding or removing members and resolving disputes

Finally, every LLC needs to appoint a registered agent—someone who accepts legal documents on behalf of your business. Most states allow you to serve as your own registered agent, which costs you nothing. Still, you might consider using a registered agent service if you won't always be available during regular business hours or want your personal address off public record.

Step 2: File your formation documents

Now you're ready to officially register your LLC with the SOS. Most states call LLC formation paperwork the articles of organization. You'll also need to pay the filing fee when you submit your articles.

Your articles of organization typically include the following:

• Your LLC's official name, management structure, and business address
• Your registered agent's name and address
• The organizer's name and signature
• Any other information required by your state, such as your LLC's purpose or duration

You can file directly with the SOS. Most states offer online filing portals, or you can download and submit PDF forms by mail.

Step 3: Handle final requirements

Your LLC is official once the SOS processes your articles of organization, but you'll want to take a few more steps to set up your business structure. Here are some general needs for most companies:

• Obtain an employer identification number (EIN). Also called a federal tax ID, an EIN is required if you hire employees, file business taxes, or open business bank accounts.
• Open a business bank account. Look into your banking options to open a separate account strictly for business matters.
• Apply for licenses and permits. Depending on your business and location, you may need to apply for federal, state, or local licenses to legally operate.

After setting up your LLC, you should turn your attention to long-term business planning. This includes how you'll handle business taxes, bookkeeping, payroll, and similar tasks. Likewise, you should consider any requirements to keep your business compliant, such as filing annual reports and renewing business licenses.

What does a “free LLC” really mean?

As discussed, when you see “free LLC” advertised, it means the company won't charge you for using its filing service. The state's filing fee, on the other hand, is still your responsibility.

Unless you qualify for state-specific programs that offer fee waivers or reductions (which are rare for business formations), there's no way around paying the state filing fee—even if you file everything yourself.

Minimum LLC formation cost in each state

Other LLC startup costs to watch out for

While the filing fee is the first expense, you might encounter other costs during the early stages of your new LLC. Here are some to plan for.

• Registered agent fees. If you decide to hire a professional registered agent, you might pay $100 to $500 in financial compensation annually.
• Annual report filing fees. Many areas require annual or biennial reports with associated state fees, so plan accordingly to avoid falling out of good standing with the SOS.
• Operating agreements. You can use a professional drafting service or work with an attorney to prepare your operating agreement, which may cost from $100 to $750 or more. If you're comfortable handling the basics yourself, starting with a reliable operating agreement template can be a smart and budget-friendly first step. It helps you cover the core elements clearly and consistently. However, for nuanced situations or multi-member LLCs, it’s wise to have an attorney review or customize the final version to safeguard your interests and make sure it complies with state-specific laws.
• State-specific LLC taxes and fees. Factor in required taxes, such as sales/use and income taxes, and any industry-specific permits or licenses you need to acquire (and eventually renew).
• Business bank account fees. When you open an account or apply for credit, consider any recurring maintenance fees, minimum balance requirements, and potential interest rates.

Although these expenses can add up, they're far less expensive than the penalties that could arise from missing payments or deadlines. Above all, track your requirements and stay organized to keep your LLC compliant.

Operating agreements

Given the importance of an operating agreement—it's more or less a contract and rulebook for your business—it makes sense to get professional help with drafting one.

EIN registration

You can obtain your EIN for free through the Internal Revenue Service (IRS).

Business license and permit assistance

Licenses tend to be one of the most stressful and confusing requirements for new business owners—and it's easy to see why. Requirements vary across federal, state, and local levels, and while some businesses need multiple permits, others need none at all.

FAQs

How do I know if an LLC is right for me?
There's no one-size-fits-all answer, but if you're seeking liability protection and business opportunities that a sole proprietorship can't provide, an LLC might be your next step. This legal business entity offers personal asset protection, similar to a corporation, but isn't as complicated to set up.

How long does it take to form an LLC?
Completing the articles of organization and initial formation steps typically takes just a few hours, although each state has its own processing times to actually make your LLC official. Other tasks like drafting an operating agreement, obtaining licenses, or applying for business credit can take longer (sometimes weeks to months, especially in the case of licenses).

How much does an LLC usually cost to operate?
LLCs are generally cost-effective to operate and maintain. Ongoing expenses often include annual state renewal fees (where applicable), business taxes, and basic operational costs. Nonetheless, the exact LLC costs depend on the state and what kind of business you operate.

Can I form an LLC in a different state?
If you already have an LLC and want to operate in a different state, you can register your business as a foreign LLC. This allows you to conduct business with the same LLC, but you'll need to provide documentation from your home state to show that your business is in good standing.

What are the most popular states for starting an LLC?
Delaware, Wyoming, Nevada, Texas, California, Florida, and New York are some of the most popular states to start an LLC.

This story was produced by LegalZoom and reviewed and distributed by Stacker.