If you've got the dream, the hustle, and the plan—but not the cash—you might be wondering whether starting an LLC is even possible. The good news? Yes, you absolutely can form an LLC with little or no money upfront. It might take some creativity, patience, and a bit of legwork, but it's far from out of reach.
In fact, many successful entrepreneurs launched their LLCs on a shoestring budget—often while working a day job, freelancing on the side, or bootstrapping every penny. If you're motivated to launch your business legally and professionally, this guide will walk you through the lowest-cost ways to do it.
What Are the Costs of Starting an LLC?
Let's start with the baseline: forming an LLC costs money because of state filing fees. Every state has its own fee structure, and unfortunately, there's no way to completely avoid this cost if you want to operate legally as an LLC.
Typical costs include:
- State Filing Fee: Usually ranges from $40 to $500, depending on your state.
- Registered Agent Fees: $0 if you act as your own agent; $50–$150/year for professional services.
- Business Licenses: Varies by location and industry; some are free, others cost $20–$100+
Tip: The filing fee is your biggest unavoidable cost. The rest can be minimized or postponed depending on your business type.
Free and Low-Cost Strategies to Form an LLC
If money is tight, here are practical ways to reduce or eliminate costs while still forming your LLC legally and correctly.
1. Choose a Low-Fee State
State filing fees vary widely. For example, Kentucky and Arkansas charge just $40 to $50, while Massachusetts and California may run you $500 or more annually. If you live in a high-cost state but aren't doing local business, you could consider forming in a cheaper state—but beware of complications.
Important: If you form an LLC in a different state than where you live or operate, you may still need to register as a foreign LLC in your home state—meaning you'll pay *two* filing fees. In most cases, it's best to form your LLC in the state where you're actually doing business.
2. Act as Your Own Registered Agent
Every LLC needs a registered agent—someone who receives legal documents on behalf of your business. Hiring a professional service is convenient but optional. If you're over 18 and have a physical address (not a P.O. box), you can be your own agent and save $100+ per year.
3. File the Paperwork Yourself
Many people pay a company or attorney to form their LLC, but it's not required. You can file directly with your Secretary of State, usually online. The process is surprisingly straightforward—especially if you use state-provided resources or step-by-step tutorials.
Helpful hint: Your state's business division website often includes free guides, sample forms, and FAQs. Take advantage of them instead of paying for someone else's bundled service.
4. Apply for a Free EIN from the IRS
An Employer Identification Number (EIN) is like a Social Security Number for your business. You'll need it to open a bank account or hire employees. Some services charge $50–$100 to get one for you, but the IRS offers it 100% free.
How to do it: Visit IRS.gov and apply online in minutes. You'll receive your EIN instantly.
5. Skip Unnecessary Extras
During the LLC formation process, you may be upsold on everything from business credit monitoring to deluxe binders. While some tools have value, many are optional—or can be done later when funds allow.
Skip for now:
- Expedited filing (unless time is critical)
- Corporate kits and embossed seals
- Branded domain email or websites
- Paid operating agreement templates (many are free online)
Creative Ways to Cover Startup Costs
Still short on funds? Don't give up just yet. Here are a few smart ways to gather the small amount of money you need without going into debt:
1. Offer Pre-Launch Services
If your business involves freelancing, coaching, or consulting, try landing a client before you formally launch. Let them know your LLC is forming and you'll be operational soon. A few hundred dollars upfront can go a long way.
2. Sell Unused Items
Many entrepreneurs fund their LLC fees by decluttering their homes—selling old electronics, clothing, or furniture on Facebook Marketplace or OfferUp. It's a fast, simple way to generate $100–$300.
3. Crowdfund From Family and Friends
Unlike raising venture capital, this is a quick, informal way to get help from those who believe in you. Be transparent about how little you need and how the money will be used.
4. Tap Into Community or Government Resources
Some states or local nonprofits offer grants, reduced-fee filing programs, or first-time entrepreneur incentives. Check with your local Small Business Development Center (SBDC) or Chamber of Commerce for leads.
How to Keep Ongoing Costs Low
Forming your LLC is just the beginning. Annual fees and compliance requirements can sneak up on you—especially if you're on a tight budget. But you can stay ahead of the curve with a few proactive habits.
Tips for long-term savings:
- Use free accounting software: Tools like Wave or ZipBooks are great for small operations.
- Handle bookkeeping yourself: At least until your business grows.
- Stay organized: Missed deadlines often result in late fees. Mark your calendar for annual reports and tax deadlines.
- Avoid unnecessary subscriptions: Only pay for software or services you actively use.
Starting Small Doesn't Mean Thinking Small
You don't need thousands of dollars—or even hundreds—to start your LLC. With a little ingenuity and some elbow grease, you can register your business, protect your assets, and begin building something real for less than the cost of a nice dinner out.
The key is to focus on what's essential, skip what's not, and remember that every big business once started small. If forming an LLC feels out of reach financially, this guide proves that's not the case. You can start where you are—with what you have—and grow from there.