What is the cost of incorporating? Are there other costs besides the legal fees and setting up? Well, it depends. One of the greatest advantages of an LLC is they are relatively inexpensive and easy to incorporate. They typically only involve filling out online or simple paperwork. An LLC may be filed using paper, but many choose to file electronically. The filing fees associated and the Cost to Set Up an LLC are generally much less than that of a full corporation and less than the fees associated with a sole proprietorship or a partnership.
If you’re filing electronically, you can often expedite the process by contacting a business lawyer to make sure everything is filed correctly. A business lawyer will make sure the forms are properly filed, along with any necessary amendments. If a mistake is made, filing fees won’t cover them, and you’ll need to hire the attorney again to file the corrected documents. Therefore, it’s usually better to hire an attorney to file your paperwork when choosing to incorporate an LLC.
Other factors, such as filing fees, service fees, and state filing fees, will vary from state to state. Service fees and tax payments will vary depending on the individual business owner. Even service fees, which are usually very low, can cost money. Before incorporating an LLC, make sure there aren’t any penalties or late fees for not completing the process. Also, keep in mind that additional fees are associated with incorporating if the LLC has a special designation.
One thing you can do to reduce your LLC cost is to determine what services you need before forming LLC. Determine how much time you want to spend working on the business, whether you’re planning to hire employees, and what types of licensing you’re going to need. All of these things will impact the costs of incorporating.
The next thing you have to consider when formulating your LLC includes determining your tax purposes. If you’re planning to incorporate for tax purposes, you’ll want to obtain the necessary papers, like your state filings and federal filings, and then complete them. Keep in mind that all of your business income can be taxed as business income in some states, which could increase your tax liability. There may be an annual reporting fee in addition to the filing fees. You’ll need to calculate how much it will cost to incorporate your LLC before deciding if you can afford to do it independently.
Once you know how much it costs to incorporate your LLC, you can decide if the expenses are worth it. If you’re unsure, consult a business lawyer to get more information about the ins-and-outs of incorporating your business. Be sure to request copies of any paperwork you send to the state licensing agency in your particular state, and make sure that you include all necessary filing fees, as well as any required reports filed by other states.