The lowest filing fees are Montana ($35), Kentucky ($40) and Arkansas ($45 online) — but the cheapest state for you usually isn’t the one with the lowest sticker price. Two things change the answer: the recurring annual fee, and where you actually do business.
Cheapest by one-time filing fee
| State | Filing fee | Annual fee |
|---|---|---|
| Montana | $35 | $20 |
| Kentucky | $40 | $15 |
| Arkansas | $45 (online) | $150 |
| Arizona | $50 | $0 |
| Colorado | $50 | $25 |
| New Mexico | $50 | $0 |
| Missouri | $50 | $0 |
| Mississippi | $50 | $0 |
Notice Arkansas: a cheap $45 to file, but a $150/yr franchise tax — so it’s expensive to keep.
Cheapest over five years
Once you add five years of recurring fees, the low-annual-fee states pull ahead. Kentucky ($40 + 5×$15 = $115), New Mexico ($50 + $0 = $50), Missouri and Ohio (low filing, $0 annual) are among the cheapest to own, not just to start. Compare any states with the cost-by-state tool or the 5-year cost calculator.
The catch: form where you operate
It’s tempting to form in a “cheap” or “privacy” state like Wyoming or New Mexico. But if you live and work in, say, California, you must:
- Form the LLC in the other state, and
- Register it as a foreign LLC in California (paying CA’s fees and the $800 franchise tax anyway), and
- Maintain two registered agents.
That’s strictly more expensive than just forming in California. Form in your home state unless you have a specific, advised reason not to (e.g., real-estate holding companies).
When out-of-state can make sense
- Wyoming / New Mexico for holding companies or pure online businesses with no physical nexus.
- Delaware if you plan to raise venture capital (investors know its law).
For everyone else, the cheapest realistic LLC is your home state’s filing fee plus its annual fee — see how much an LLC costs in 2026 and annual fees by state. General information, not legal or tax advice.