A limited liability company (LLC) is a business structure in the United States wherein the company members cannot be held personally liable for the company’s debts or liabilities. This means that if the LLC goes into debt or is sued, the members’ personal assets are protected. An LLC is not a corporation, so it is not subject to the same ongoing costs, such as corporate taxes, that a corporation is. However, there are some ongoing costs associated with operating an LLC.
The first and most obvious ongoing cost of an LLC is the filing fee to maintain the company’s status with the state in which it is registered. LLCs must file an annual report and pay a filing fee in most states. The cost of this filing fee varies from state to state, but is typically around $100.
Another ongoing cost of an LLC is the cost of liability insurance. This is not required in all states, but it is a good idea to have, as it will protect the LLC’s members from being personally liable for any debts or damages incurred by the company. The cost of liability insurance will vary depending on the size and type of business, but is typically around $500 per year.
There are also some ongoing costs associated with running the LLC itself, such as the cost of a business bank account and the cost of accounting software. These costs are typically around $50 per year.
In summary, the ongoing costs of an LLC are the filing fee to maintain the company’s status with the state, the cost of liability insurance, and the cost of a business bank account and accounting software. These costs typically total around $650 per year.
A limited liability company (LLC) is a business structure that offers personal liability protection and tax benefits.3 min read
Ongoing costs of a LLC include:
Filing fees: You will need to file your Articles of Organization with your state, which typically costs around $100. You may also need to file an annual report and pay a fee for this, which can cost around $50.
License fees: If your LLC will be engaged in any business activities, you may need to obtain various licenses and permits. The cost of these will vary depending on the type of business and the state in which you are operating.
Accounting and legal fees: You will need to keep accurate financial records for your LLC and you may need to engage the services of an accountant or bookkeeper. You may also need to engage the services of a lawyer from time to time, which can be expensive.
Insurance: You will need to obtain insurance for your LLC, which can be expensive.
Taxes: You will need to pay taxes on your LLC’s income.
The ongoing costs of a LLC can be significant, but the benefits of having personal liability protection and enjoying tax benefits may outweigh the costs.