LLC benefits generally include:
- Personal Liability Protection protects LLC member(s) from the debts and liabilities of the LLC.
- Flexibility in Management Structure: A member, manager, or member-manager can manage an LLC.
- Pass-through taxation means that LLCs are not taxed as entities. Instead, the LLC's income is "passed through" to the members and taxed at individual tax rates.
Though the above list covers the overall benefits of LLCs across the country, requirements and costs vary by state.
Also, there are additional advantages and disadvantages to starting an LLC in each state. So we curated the following list to with all essential details.
ARIZONA
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Pros
- File taxes easily and find other potential advantages for tax treatment
- Quick and simple filing, management, compliance, regulation, and administration of your LLC
- No franchise tax
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Cons
- the new statute for LLCs. The 2018 statute includes many changes to the existing state law governing LLCs
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NAME / Trade NAME DBA Fees
Reserve name for 120 days. Register trade name online with the Arizona Secretary of State for a $10 fee ($10 if done by mail or $45 if performed online)
LLC Name Requirements
Certificate of Formation
$50 (an additional $35 fee is charged for expedited processing) for Articles of Organisation with the Arizona Corporation Commission; submit the Statutory Agent Acceptance form with your Articles of Organisation.
File State Tax or Report
need to register online or on paper with the Arizona Department of Revenue (DOR)
EIN / Licences / Records
needed EIN IRS instructions Form SS-4.
Local or state licenses for the type of business. Registration.
Must keep records in its principal office. |
CONNECTICUT
|
Pros
- Quick and simple filing, management, compliance, regulation, and administration.
|
Cons
- High state and local tax rates for residents
- Annual report filing required + state fee
- Specialty permits and licenses can be expensive
|
NAME / Trade NAME DBA Fees
Reserved for 120 days and the filing fee is $60. For DBA name, you must register your fictitious name with the town clerk
Application for reservation of name ;
Certificate of Formation
Filing Certificate of Organisation with the Connecticut Secretary of State and the fee is $120.
File State Tax or Report
Must file an annual report with the Connecticut Secretary of State fee is $20 / need to register with the Connecticut Department of Revenue Services (DRS)
EIN / Licences / Records
EIN needed IRS instructions Form SS-4.
Local or state licenses for the type of business.
Principle office keeps the records. |
FLORIDA
|
Pros
- No state income tax, so you get to keep more of your earnings
- Easy tax filing and potential advantages for tax treatment
|
Cons
- Difficulty Transferring Business Ownership
- Case Law is Limited
- LLC members must pay high self-employment taxes at the federal level
- Florida doesn’t allow name reservations for business entities
|
NAME / Trade NAME DBA Fees
No fee is listed for naming the LLC. Register DBA name online or by postal mail using the Application for Registration of Fictitious Name. There is a $50 filing fee.
Certificate of Formation
File Articles of Organisation with the Florida Division of Corporations. Filing fee is $125
File State Tax or Report
Must file an Annual Report to maintain "active" status fee for the annual report is $138.75 (a $400 late fee is added to the annual report filing fee)
EIN / Licences / Records
EIN needed IRS instructions Form SS-4.
Local or state licenses for the type of business. Registration.
Principle office keeps the records. |
KANSAS
|
Pros
- Create, manage, regulate, administer and stay in compliance easily
|
Cons
- Slow Economy
- Surcharge Corporate Tax
- An investment is illiquid since all members must vote to transfer a member’s interest
|
NAME / Trade NAME DBA Fees
Reserve a name for up to 120 days with the Secretary of State. The filing fee is $30 for online filing, $35 for filing by mail
Certificate of Formation
File Kansas Limited Liability Articles of Organisation with the Kansas Secretary of State. The filing fee is $165
File State Tax or Report
Must file an annual report with the Secretary of State every year. The filing fee for online filing is $50 and $55 for mail filing
EIN / Licences / Records
EIN is needed. IRS instructions Form SS-4
Local or state licenses for the type of business. Registration.
Must keep records in its principal office. |
MONTANA
|
Pros
|
Cons
|
NAME / Trade NAME DBA Fees
Reserve a name for up to 120 days by filing a Reservation of Business Name online with the Montana Secretary of State. The filing fee is $10. Register your assumed name with the Montana Secretary of State. You must register online and pay a $20 filing fee.
Certificate of Formation
File with Articles of Organisation with the Montana Secretary of State. The filing fee is $70.
File State Tax or Report
Must file an annual report to stay in good standing with the Secretary of State's Office. The report is due each year by April 15 and must be accompanied by a $20 filing fee. Businesses that file after that date will be charged a $35 fee.
EIN / Licences / Records
EIN is needed. IRS instructions Form SS-4.
Local or state licenses for the type of business. Registration.
Must keep records in its principal office. |
NEVADA
|
Pros
- No state income, corporate or franchise taxes
- Privacy protection for owners choosing to be anonymous
- No operating agreements or annual meetings requirements
- Low business registration fees and quick turnarounds
- Formation of single-person corporations allowed
- Permissive rules on the creation of shares
- A judicial system relying on case law to settle disputes
- Strong corporate veil protecting individuals from liability
- No formal information-sharing agreement with the IRS
|
Cons
- Expensive for Businesses
- Less Privacy for Managers
- High Crime Rate
- Businesses may be taxed if they make $4 million
|
NAME / Trade NAME DBA Fees
Reserve a name for 90 days by filing a Name Reservation Request form with the Nevada Secretary of State. The filing fee is $25.
Must register your fictitious name with the county clerk in any county in Nevada where your LLC does business.
Certificate of Formation
File Articles of Organisation Limited-Liability Company with the Nevada Secretary of State. The filing fee is $75.
File State Tax or Report
The first annual list must be filed with the LLC's Articles of Organization. The filing fee is $150. The report may be filed online using Silverflume, the Secretary of State's web-based business filing portal, or you may download the form and file by postal mail.
EIN / Licences / Records
EIN is needed. IRS instructions Form SS-4.
Local or state licenses for the type of business. Registration.
Must keep records in its principal office. |
OHIO
|
Pros
- Simple tax filing and the opportunity to take advantage of other tax treatment opportunities
- No tax on products sold to customers outside the state
- Quick and simple filing, administration, management, compliance and regulation of your LLC
- Separating and limiting your personal liability from your business liability and debts
- Business-friendly tax system
|
Cons
- Increased Tax Dues
- Competitive Market
- Less established regulations for businesses
- Not as much flexibility compared to some other states
|
NAME / Trade NAME DBA Fees
Reserve a name for 180 days by filing a Name Reservation (Form 534-B) with the Ohio Secretary of State. The application may be filed online or by mail. The filing fee is $39. Must register your trade name with the Ohio Secretary of State, filing fee is $39.
Certificate of Formation
filing Articles of Organisation for a Domestic Limited Liability Company (Form 533A) with the Ohio Secretary of State, filing fee is $99.
File State Tax or Report
There are no Annual Reports for Ohio LLCs / need to register with the Ohio Department of Taxation (DOT).
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4.
Local or state licences for the type of business. Register.
Must keep records in its principal office. |
OREGON
|
Pros
- Protect your personal assets from your business liability and debts
- Easily file your taxes and discover potential advantages for tax treatment
- Simple to create, manage, regulate, administer and stay in compliance
|
Cons
- High Income Tax Rates
- High Cost of Living
- Qualified Worker Shortage
|
NAME / Trade NAME DBA Fees
Reserve a name for 120 days by filing an Application for Name Reservation with the Oregon Secretary of State Corporation Division. Must register your assumed name with the Oregon Secretary of State, filing fee is $50.
Certificate of Formation
Filing Articles of Organisation-Limited Liability Company with the Secretary of State, filing fee is $100.
File State Tax or Report
Must file an Annual Report with the Oregon Secretary of State, fee for filing the annual report is $100 for domestic LLCs and $275 for foreign LLCs. You'll need to register with the Oregon Department of Revenue (DOR).
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4.
Local or state licences for the type of business. Register.
Must keep records in its principal office. |
PENNSYLVANIA
|
Pros
- No franchise tax
- Easy tax filing and potential advantages for tax treatment
- Quick and simple filing, management, compliance, regulation and administration of your Pennsylvania LLC
- Lenient decennial report filing rules
- Protecting your personal assets from your business liability and debts
|
Cons
- If primary business operations are outside PA, then will need to file as a foreign LLC
- High Corporate Tax Rate
- Philadelphia’s Struggling Economy
|
NAME / Trade NAME DBA Fees
Reserve a name for 120 days by filing a Name Reservation (Form DSCB:15-208) with the Pennsylvania Department of State. The filing fee is $70. Must register your fictitious name with Pennsylvania Department of State, filing fee is $70.
Certificate of Formation
Filing a Certificate of Organisation Domestic Limited Liability Company, filing fee is $125.
File State Tax or Report
Must file a Certificate of Annual Registration with the Department of State, annual fee of $560 times the number of members of the LLC must be paid.
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4.
Local or state licences for the type of business. Register.
Must keep records in its principal office. |
SOUTH CAROLINA
|
Pros
- Create, manage, regulate, administer and stay in compliance easily
- Protect your personal assets from your business liability and debts
- Easily file your taxes and discover potential advantages for tax treatment
|
Cons
- High Alcohol Tax
- High Income Tax
- Shrinking Qualified Workforce
- Extra compliance requirements for LLCs filing taxes as S-corp
- No burgeoning tech startup scene
|
NAME / Trade NAME DBA Fees
Reserve a name for 120 days by filing an Application to Reserve a Limited Liability Company Name with the South Carolina Secretary of State Corporations Division. The reservation must be filed by mail. The filing fee is $25. You should register your DBA with the county or counties where your LLC is located and does business.
Certificate of Formation
Filing Articles of Organisation with the Secretary of State, articles can be filed online or by postal mail filing fee is $110.
File State Tax or Report
South Carolina does not require LLCs to file an annual report. Not required to pay income tax to either the federal government or the State of South Carolina.
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4.
Local or state licences for the type of business. Registration.
Must keep records in its principal office. |
TENNESSEE
|
Pros
- Perpetual existence (unless otherwise stated in the Articles of Organisation)
- Simple management, filing, regulation, compliance and administration
- Separating your business debts and liability from your personal ones
- No state income tax on wages
|
Cons
- High Cost of Doing Business
- High Business Taxes
- High Sales Tax
- High annual report costs
|
NAME / Trade NAME DBA Fees
Reserve a name for four months by filing an Application for Reservation of Limited Liability Company Name with the Tennessee Secretary of State, filing fee for a reservation is $20. Must register your assumed name with the Tennessee Secretary of State, register online or by postal mail.
Certificate of Formation
Filing Articles of Organisation (Form ss-4270) with the Secretary of State, filing fee is $50 per LLC member. The minimum fee is $300; the maximum fee is $3,000.
File State Tax or Report
Must file an annual report with the Tennessee Secretary of State and pay a $50 filing fee per member (minimum of $300 and maximum of $3,000). You'll need to register with the Tennessee Department of Revenue.
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4.
Local or state licences for the type of business. Register.
Must keep records in its principal office. |
VERMONT
|
Pros
- Quick and simple creation, management, regulation, administration and compliance
- Protect your personal assets from your business liability and debts
- File your taxes easily and discover potential advantages for tax treatment
|
Cons
- Difficult Recruitment
- Above Average Taxes
- Above Average Cost of Living
|
NAME / Trade NAME DBA Fees
Reserve a name for 120 days by filing an Application to Reserve a Specified Business Name with the Vermont Secretary of State, fee $20. You must register your assumed name with the Vermont Secretary of State. You may register online or by postal mail.
Certificate of Formation
Filing Articles of Organisation with the Vermont Secretary of State, filing fee is $125.
File State Tax or Report
Must file an annual report with the Vermont Secretary of State Corporations Division, filing fee is $35 for a Vermont LLC and $140 for a foreign LLC.
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4.
Local or state licences for the type of business. Registration.
Must keep records in its principal office. |
VIRGINIA
|
Pros
- Quickly and simply file, manage, ensure compliance, regulate and administer of your Virginia LLC
- Separate and limit your personal liability from your business liability and debts
- Easily file taxes and find potential advantages for tax treatment
|
Cons
- LLCs create ownership complexity for external investors
- Slow Job Growth
- Higher Cost of Living
- LLC members can be professionally liable for other members’ negligence
|
NAME / Trade NAME DBA Fees
Reserve a name for 120 days by filing an Application for Reservation or for Renewal of Reservation of a Business Entity Name with the Commonwealth of Virginia State Corporation Commission, filing fee is $10. Must file a certificate of assumed or fictitious name with the clerk's office of the circuit court in the county or city where the LLC's conducts business. There is a $10 filing fee.
Certificate of Formation
Filing Articles of Organisation (Form LLC-1011) with the Virginia State Corporations Commission, filing fee is $100.
File State Tax or Report
LLCs authorised to do business in the state must pay a $50 annual registration fee The Commission must receive the LLC's annual registration fee payment on or before the due date stated in the notice of assessment or a $25 penalty will be imposed.
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4.
Local or state licences for the type of business. Reservation.
Must keep records in its principal office. |
WASHINGTON
|
Pros
- Protect your personal assets from your business liability and debts
- Easily file your taxes and discover potential advantages for tax treatment
- Simple to create, manage, regulate, administer and stay in compliance
|
Cons
- Manager Listed in Periodic Report
- High cost of living
- Competitive market
- Mandatory business licence required + annual renewals.
|
NAME / Trade NAME DBA Fees
Reserve a name for 180 days by filing a Name Reservation with the Washington Secretary of State, $30. You can pay an additional $50 for expedited processing. Must file register your trade name with the Washington Department of Revenue.
Certificate of Formation
Filing a Certificate of Formation with the Secretary of State, filing fee is $180 for filing by mail or $200 for online filings.
File State Tax or Report
Must file an annual report (also known as an annual renewal) with the Secretary of State, fee for filing Initial and Annual Reports is $60.
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4.
Local or state licences for the type of business. Registration.
Must keep records in its principal office. |
WISCONSIN
|
Pros
- Protects your personal assets from your business liability and debts
- Easy tax filing and potential advantages for tax treatment.
- Quick and simple filing, management, compliance, regulation and administration
|
Cons
- High Corporate Taxes
- Little Opportunity for Business Growth
- Securing specialty permits and licences for certain industries may be time-consuming
|
NAME / Trade NAME DBA Fees
Reserve a name for 120 days by filing a Name Reservation Application (Form 1) with the Wisconsin Department of Financial Institutions, $15 to file a name reservation application. You should register your trade name with the Wisconsin Department of Financial Institutions.
Certificate of Formation
Filing Articles of Organisation (Form 502) with the Wisconsin Department of Financial Institutions, The filing fee is $170 for filing by mail and $130 for filing online.
File State Tax or Report
Must file an annual report with the Department of Financial Institutions, filing fee is $25 for a domestic LLC and $80 for a foreign LLC.
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4.
Local or state licences for the type of business. Registration.
Must keep records in its principal office. |
WYOMING
|
Pros
- Privacy. The personal details of LLC members or owners remain confidential.
- No Information Sharing.
- No state income tax
- Protects your personal assets from your business liability and debts
- Quick and simple filing, management, compliance, regulation and administration
- Easy tax filing and potential advantages for tax treatment
|
Cons
- Struggling Economic Climate
- Constricting Labour Force
- Low Population
- Tax advantages are primarily for people, residing in the state
|
NAME / Trade NAME DBA Fees
Reserve a name for 120 days by filing an Application for Reservation of Name with the Wyoming Secretary of State. The reservation must be filed by mail. The filing fee is $50. File an Application for Registration of Trade Name with the Secretary of State by mail and pay a $100 fee.
Certificate of Formation
Filing Articles of Organisation with the Secretary of State, filing fee is $100, $102 for online filing.
File State Tax or Report
Must file an annual report with the Secretary of State. All LLCs must pay an annual report licence tax equal to the greater of (1) $50, or (2) two-tenths of one mill on the dollar ($.0002) based on the company's assets located and employed in the state of Wyoming. You'll need to register with the Wyoming Department of Revenue (DOR).
EIN / Licences / Records
Needed EIN. IRS instructions Form SS-4
Local or state licences for the type of business. Registration.
Must keep records in its principal office. |
Bottom line
The LLC benefits by state for forming vary but generally include personal liability protection, flexibility in management structure, and pass-through taxation. These benefits can be beneficial for businesses and entrepreneurs alike. Be sure to check with your state's laws to see what specific benefits are available to LLCs in your state.
