Single Member LLC Cost

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How much does a single member LLC cost? If you are a business owner who wants to establish a new LLC, you may ask this question. Let’s explore this question and review some general information about single member LLCs and how they are run.

How Much Does It Cost to Form a Single Member LLC?

A single member LLC is an LLC with only one owner. Single member LLCs have the same advantages and disadvantages as a multi-member LLC. Still, the company is run and managed by only one individual.

When a person wants to establish a new single member LLC, they will be required to pay various fees. The LLC cost will depend on these required fees, and the amounts will vary depending on where the LLC will be established.

Some common fees you can expect to pay when starting a single member LLC include:

  • Filing Fees. To legally establish a single member LLC, the owner must file articles of organization. Most states require a filing fee for this document.
  • Registered Agent Fees. A registered agent is in charge of receiving legal documents on behalf of the company. The registered agent is typically the business owner in a single member LLC so that this fee can be avoided. Sometimes, the owner chooses to hire a third party to act as a registered agent, which may incur a fee.
  • Business License Fees. Depending on the type of business you are starting and which state you are in, you may be required to obtain licenses or certificates. These will usually have fees associated with them.
  • Legal Fees. Many new business owners choose to hire an attorney to guide them through starting a single member LLC. An attorney can help draft important documents like the organization or operating agreement articles. They can also ensure that all documents are filed with the correct government offices.

These fees are generally what a business owner will have to pay when establishing the business. In addition, keeping the single member LLC legally operating and in compliance with state and federal laws will require ongoing costs and fees.

Single Member LLC Filing Cost

When filing the company’s articles of organization with the state, the owner of a single member limited liability company will be required to pay a filing fee. Filing costs will vary depending on the state laws but generally range from around $40 up to $500.

Along with filing the articles of organization, most states require that businesses obtain a business license. Business license costs range from around $50 to $100 in most states.

Single Member LLC Ongoing Cost

After a single member LLC has been established and all of the formation fees have been paid, the business owner needs to know that there will be ongoing costs to keep the LLC running and comply with federal and state laws.

Ongoing fees can include:

  • Annual Fees. Most states require single member LLCs to file an annual report. This report usually has a filing fee, but some states do not charge a fee. The annual report is essential in keeping the LLC compliant with state laws.
  • Annual Franchise Tax. Some states charge LLCs a yearly tax just for doing business in the state. This will need to be paid for the LLC to remain operational.
  • Business License Renewal Fees. After obtaining a business license or permit, most states require annual fees to keep these licenses. Business license renewal fees generally range from $20 to $100.
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How to Form a Single Member LLC

It is generally a simple process to form a single member LLC. Still, the process may be different depending on your state. For example, suppose you are unfamiliar with your state’s laws and regulations for single member LLCs. In that case, you should consult with an LLC lawyer to guide you through the process.

In most states, you will need to complete the following steps to form a single member LLC:

Step 1: Name Your Business. A single member LLC needs an original name that is not already used in your state. Every state has a searchable database so you can check to see if your company name is in use. The business name must include “limited liability company” in some form like LLC or L.L.C.

Step 2: Appoint a Registered Agent. The registered agent is the person who will receive important legal and tax documents on behalf of the business. In a single member LLC, the registered agent is usually the owner.

Step 3: File Articles of Organization. Articles of organization are formal legal documents that must be filed with the state to establish an LLC. This document includes the LLC name, the nature of the business, the name of the registered agent, and the owner's names.

Step 4: Create an Operating Agreement: Most states do not require an operating agreement, but it is good practice to have one for an LLC, even with only one owner. This document outlines the operating procedures of an LLC.

Step 5: Obtain an EIN: You will need an employer identification number (EIN) to open a bank account for the company and file your business taxes.

Single Member LLC Projects

Single Member LLC Formation

To form a single member LLC, the business owner will be required to draft and file several important documents like articles of organization. Some owners will also have to file an operating agreement depending on the state. It is common for an LLC owner to hire a lawyer to ensure the documents are properly drafted and filed to avoid mistakes.

Single Member LLC Operating Agreement Drafting

While operating agreements usually are not mandatory, many business owners choose to draft one. This document lays out how a business will be run and managed. This document is usually more beneficial for a multi-member LLC. Still, some single member LLC owners find the document helpful.

It is encouraged to hire an experienced business lawyer to assist in drafting the operating agreement to ensure there are no mistakes. It protects the interests of the business owner and the business.

Single Member LLC Formation Cost

Single member LLC formation costs can include filing fees, legal fees for document drafting and review, and business license fees. These fees will vary based on the state.

ContractsCounsel’s marketplace data shows the average single member LLC formation costs to be $518.33 across all states and industries.

Operating Agreement Cost

Suppose an LLC owner chooses to have an operating agreement and hires a lawyer to draft the document. In that case, the owner will have to pay for the attorney’s time and legal services. This may include consultations, drafting the document, revisions, and communication.

ContractsCounsel’s marketplace data shows the average operating agreement cost of $548.38 across all states and industries.

How Do Lawyers Charge for a Single Member LLC Project?

Hourly Rates for Single Member LLC Projects

Hourly rate fee structures are a common way that an LLC lawyer may charge their client. When lawyers use this payment method, they will charge their clients a set rate for each hour spent working on a project. Hourly rate fee agreements ensure that the lawyer is compensated for all time spent working on a project or case.

ContractsCounsel’s marketplace data shows the average hourly rate for an LLC lawyer range from $200 - $350 per hour.

Flat Fee Rates for Single Member LLC Projects

Suppose a lawyer is hired for a specific project like drafting an operating agreement. In that case, they may forgo hourly rates and instead quote their client an upfront flat fee rate that covers all legal costs for the specific task.

It is important to ensure the client knows what’s included with the fee before starting the project because it may not include revisions, communications, or consultations.

ContractsCounsel’s marketplace data shows the average flat fee rate for single member LLC projects is $518.33.

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