When setting up a new company it can be surprisingly difficult to get an overview of what fees you will be paying, who you will be paying them to and when you will be paying them.

Even though the fee system in the U.S. varies between service providers and states, there are many similarities between them. Fees can generally be classified in two categories: (i) set-up fees and (ii) maintenance fees. Set-up fees are one-off fees which you incur when setting up your company and maintenance fees are fees which you will be paying each year.

A bare-bones LLC in New York state will typically cost you about $1,000 in fees to run for three years. LLCs are generally cheaper in fees than corporations, and New York is on the lower end of the scale when it comes to state fees. Here’s an example of what the fee schedule would look like for a New York LLC:

Set-Up Fees

If you are comfortable doing the company formation yourself, you can file directly with the Secretary of State and save the service provider fees. However, many people prefer to use a service provider to draft and file the documents. The example above shows a $300 fee for this service, but these fees can vary greatly depending on the service provider.

One fee you cannot avoid when forming a company is the fee paid to the Secretary of State in the state where your company is formed. For example, in New York the NY Secretary of State charges $200 to register a LLC. Most states offer expedited filing for a reasonable extra fee, e.g., $25 in New York. This is voluntary, but it can mean the difference between a 24-hour turnaround and a 2-week turnaround.

The service provider will usually collect its fees upfront and this will include the state fees. Often, the service provider also acts as the company’s registered agent and collects the first year’s registered agent fees along with the set-up fees. So in the NY LLC example above, you would be paying the service provider $525 + $120 = $645 before they go ahead and set up your company.

The basic service provider fees and state fees make up the minimum set-up requirements. Depending on the service you purchase, the service provider fees may include such things as filing for an EIN, putting in place an operating agreement, foreign registration, etc.

Maintenance Fees

The state in which you formed your company will have a mandatory annual fee for keeping your company registered. The size of the fee varies and it can be fixed or variable. In New York, the fee is variable based on the LLC’s gross income and ranges from $25 to $4,500. Likewise, the timing of the payment varies, e.g., in New York it is payable before January 30th each year.

The Secretary of State usually requires your company to file an annual report. Most often, the report is a basic 1-2 pager with company information and has a small fee associated with it. New York requires its LLCs to file a Biennial Statement, which must be filed every 2 years along with a $9 fee.

In most states, a company requires a registered agent. The registered agent’s role is mainly to receive service of process if your company gets sued. If you choose to have a service provider act as your registered agent, the fees for this are usually charged upfront each year.

While these fee types are mostly consistent across states and company types, be sure to look through the fine-print in your state. New York, for instance, has a antiquated publishing requirement for LLCs which, if you’re not careful, can add another $1,000 to your company costs.