It's essential to consider the costs if you’re thinking about starting a limited liability company (LLC) in Missouri. But if you’re not sure how much you can expect to pay, figuring out a budget can be challenging.
Keep reading to learn the expenses associated with forming a Missouri LLC.
This article will teach you:
- How much it costs to start an LLC in Missouri
- Other expenses that can help you and your business
- The pros and cons of the different ways to create an LLC
By the end of this article, you’ll have a clear idea of what your LLC formation expenses will be.
Total Missouri LLC Cost – Starting at $50
According to the Missouri Secretary of State’s Schedule of Fees and Charges, the absolute minimum cost to start an LLC in Missouri is $50.
This includes only one item:
- Online Articles of Organization filing fee: $50
However, if you choose to file a paper copy of your articles of organization, the fee is $105. Additionally, you may need to obtain professional licenses or business permits to operate a business in specific industries and localities.
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Missouri LLCs – the Basic Costs
The startup costs for a Missouri LLC will vary depending on several factors. The minimum cost is $50, but we’ve laid out your potential expenses in the sections below.
Articles of Organization Filing Fee — Starting at $50
The legal documents that officially start LLCs are called articles of organization. To form an LLC in Missouri, you will need to file them with the Secretary of State. While it might sound challenging, you simply need to provide basic info about your business.
Registering with the State Tax Office — Free
Not every LLC will need to get a register with the Missouri Department of Revenue. However, if your business sells tangible goods or taxable services, you will need to register. You must also register if your business will have employees.
There is no cost to register your LLC. Check out the Missouri Department of Revenue’s website for more details.
Professional Licenses and Business Permits — Various
Some Missouri business owners will also need an additional license or permit to keep their LLC legal. Since these licenses and permits vary in price, we can’t provide you with a set cost that will apply to everyone.
Check out Missouri’s list of permits to learn more about the industries that require a state-level professional license or permit.
Further, many counties and cities mandate that LLCs that operate within their borders obtain local business licenses. For instance, St. Louis requires all non-exempt businesses to obtain a license.
Contact the city and/or county where you plan to run your business to find out if you need to get a license.
Missouri LLCs – Optional Costs to Consider
On top of the required expenses, you may want to budget a few extra bucks to cover some additional costs. Even though these are not mandated, if you invest a little more now, you can reap the benefits later.
Expedited LLC Filing Fees — N/A
Missouri does not offer expedited service for LLC filings. However, if you submit your articles of organization online, they will immediately be processed and approved immediately; no expedite fee is required.
Registered Agent Fee — about $100 per year
Missouri requires all LLCs to have a registered agent in the state to receive legal documents.
You will include your registered agent info in your articles of organization for no additional cost. However, there is a $10 state fee if you ever need to change your agent.
New LLC owners sometimes think it makes the most sense to be the registered agent for their own LLC. But what many don’t know is that to be a registered agent, their address will be publicly available online, and they must always be available during regular business hours to receive documents.
Fortunately, you can avoid these issues by hiring a professional registered agent service. The cost is only about $100 per year, and your agent will take care of everything for you.
Check out our Best Registered Agent Services article for some of our recommendations.
Operating Agreement — Variable
An operating agreement is a legal contract that lays out how an LLC will be operated. These contracts cover vital details such as the rights and duties of the members and how and when people can enter or exit the company.
Missouri is one of the few states that require LLCs to have operating agreements. However, since operating agreements are internal documents, business owners don’t need to file them with the Secretary of State.
While there is no rule against writing your own Missouri LLC operating agreement, we don’t recommend doing so unless you have some level of expertise in the area.
You could choose to hire a lawyer to write a Missouri LLC operating agreement for you. While more expensive, if you go with this option, you can rest easy knowing that your agreement will be drafted by an experienced professional.
If you’re looking to save a little cash, another option is to pay a non-attorney LLC service to create an operating agreement for your LLC for as little as $39.
DBA Fee — $7
Even if you like your LLC's name, you may want to use a different one for a variety of reasons. For instance, dropping the “LLC” from your name might make it a little more casual. Or, you may want to change your name entirely based on future changes to the business.
However, if you want to use a different name than your official LLC name, you must register a “doing business as” or “DBA” name. Missouri calls DBAs “fictitious names.”
You can legalize your Missouri DBA by filing a Registration of Fictitious Name with the Missouri Secretary of State and paying a $7 filing fee. As with other documents, you can file online to receive faster processing.
Name Reservation Fee — $25
If you have picked your business name but are not ready to start your LLC, Missouri law allows you to reserve a name for up to three 60-day periods. This will stop someone else from taking your name during this time.
To reserve your LLC name, you must file an Application for Reservation of Name with the Missouri Secretary of State. There is a $25 filing fee, and you can file your application online to speed up the process.
Domain Name — about $20 per year
There’s no escaping the fact that the internet is essential for running a successful business. To cultivate an online presence, you’ll need to purchase a domain. Fortunately, getting a domain has never been more affordable.
We recommend buying your domain name as soon as you can. If someone else takes it before you, they could prevent you from using the domain. A perfect example of this is the practice of “domain squatters.” They will keep a watchful eye on new LLCs and buy their potential domains so that they can resell them at a high price.
You can buy a domain through GoDaddy.com or a similar website for about $20 to $50 annually. These businesses also often have sales that let you get a domain at an even lower price.
Getting an Employer Identification Number (“EIN”) — Free
An EIN is a 9-digit ID number that the Internal Revenue Service gives to companies. It’s just like a social security number, but it is for businesses instead of people. While some LLCs must obtain an EIN, others are not required to do so.
Even though the IRS may not require you to get an EIN, we recommend that you still apply for one. Most banks need you to have an EIN in order to open up a business account. Additionally, an EIN can help protect against identity theft.
To get an EIN at no cost, you can apply online or by mailing in Form SS-4. Either way, the process is quick and easy, so you should save your money and do it yourself unless you’re getting a service package that includes applying for an EIN.
Foreign LLC Qualification Fees — about $100 per extra state
To grow your business, you may want to expand to other states. Just keep in mind that you will have to spend some extra cash when doing so. You'll still be able to use the same LLC, but you'll need to register as a foreign limited liability company in every state where you intend to do business.
The foreign LLC filing fees will vary between states. However, you should plan to pay at least $100 in foreign LLC fees in each state you register.
Writing Formation Costs Off
The cost of starting a new Missouri LLC can typically be deducted from your income taxes as business startup costs. The IRS provides significant guidance on this topic. We strongly suggest that you check out the IRS website to learn which of your startup costs can be deducted.
It’s also crucial that you know that LLCs are generally classified as “pass-through” tax entities. For this reason, LLC owners can typically deduct up to $5,000 in startup expenses in their first year of operation.
Anna decides to start an LLC and open a restaurant in St. Louis, Missouri. Her formation costs are as follows:
- Missouri LLC Articles of Organization: $50
- City of St. Louis Business License Initial Fee: $200
- Operating Agreement: $45
- Statutory Agent Fees: $105
- Name Reservation Fee: $25
- DBA Fee: $7
- Web Domain Costs: $33
Since LLCs are pass-through entities, the company isn’t subject to income taxes. Rather, Anna will report the income she receives from the LLC and any business deductions as her personal income for both state and federal taxes.
Anna’s total startup costs were $465. Before her expenses were deducted, her total taxable income was $43,000. But by deducting these expenses, Anna can lower her taxable income to $42,535. This will reduce her 2022 federal income taxes from $5,077 to $4,975.
While this may not seem too significant, business owners who regularly deduct their business expenses can save a substantial amount on taxes over time.
Cheapest Way to Start an LLC in Missouri
Knowing how much to budget is an important step toward forming an LLC in Missouri. The next stage is to determine the best way to start your business, given your particular situation. We’ve explained your options below.
Formation Service – $39 + state fees
A common choice among new entrepreneurs when it comes to starting an LLC is a business formation service.
These companies will take care of the entire formation process for you. They understand all the rules you must follow to start an LLC and know which forms you need to file.
An LLC formation service will work well for many new business owners. This is because:
- They’re easy. In most cases, a formation service will have helped hundreds of people through the exact process you are struggling with now. They have all the documents, information, and expertise you need right on hand.
- They don’t cost much. Because formation services have such a large volume of business, they don’t have to charge their clients that much money.
- They’re reliable. All of the formation services’ products and procedures have been tested hundreds of times over in the real world. That kind of experience should give you peace of mind and confidence going forward.
- They’re fast. Formation services have seen almost every business formation situation already. Chances are, they have many solutions for you that are ready right now before you even know you need them.
Even though formation services work great for many businesses, they are not the best fit for every LLC. Some drawbacks of taking this route include:
- They’re not the best solution for complex LLCs. If you are forming a complicated company or one in a heavily regulated industry, you will have concerns that probably need more focused expertise in that area of business.
- Even if a formation service is a good fit, you can expect upselling. Formation services have to make money too, and some of them may pressure you to buy formation products you don’t need. Even when you are using a formation service, you need to be a smart and informed consumer.
Using a professional LLC formation service can be a great way to set up a business. Check out our Best LLC formation services article for some of our suggestions.
If you retain a lawyer, you can count on their knowledge, experience, and expertise in Missouri LLC laws. Just keep in mind when considering your options that attorneys can be pricey. Many lawyers charge an hourly rate for their services, often several hundreds of dollars an hour.
Despite the cost, hiring a lawyer comes with serious benefits:
- Lawyers help you manage risk. If you are starting a business with complicated legal issues, hiring a lawyer would be the best choice.
- Lawyers offer more customization when you need it. Do you need specific things put in an operating agreement? Is your company going to have a unique ownership structure? You may need an attorney to make sure these issues are handled properly.
Still, for the average LLC, the negative aspects of using a lawyer typically outweigh the positives:
- Lawyers cost more than any other option. The price tag alone should convince you that if you don’t need a lawyer, it’s not worth hiring one.
- Finding a lawyer takes a long time. Getting a lawyer who specializes in what you need, costs what you’re willing to pay, and can work with you well is a tall order.
- Lawyers also take longer to form a business than a formation service. Because lawyers are also very careful people, they will generally take much longer to form your company than non-lawyers would. Fortunately, most people don’t need a lawyer. In 90% of cases, a formation service will do just fine.
Do it Yourself
When forming your own LLC, you always have the option to do it yourself. However, remember that your time is valuable, and it's a scarce resource. Every hour you spend working on LLC formation paperwork is an hour you can’t devote to improving your business.
Still, there are certainly benefits to a DIY approach:
- Personal knowledge. A DIY business owner will learn a lot about the process while forming their own business, and they probably will retain that knowledge for years to come.
- It costs less upfront. If you don’t account for the value of your time, a DIY solution is the cheapest option.
Just make sure you keep the disadvantages in mind as well:
- You’re losing money when you consider how much time it takes to DIY. If you figure out that your time is worth $30 per hour, and you take 20 hours to complete your business formation, you have essentially spent $600 on business formation.
- There’s the risk of making a mistake. DIY business owners can easily make a mistake with all the paperwork that can cost them even more time and money.
- It’s a headache. State workers are very helpful, capable people. But they will also tell you that the laws and rules governing business formation are not easy, and they follow those rules for a living. It’s going to be even harder for you.
Annual Missouri LLC Fees: How Much Will it Cost to Maintain your LLC?
Make sure you consider the annual costs of maintaining your business registration before setting up an LLC.
Unlike many states, Missouri does not require LLC owners to file an annual report or pay annual fees. Still, you may need to renew a local business permit or pay registration fees for your professional license if you have one. So make sure you find out what the requirements are.
Also, you will need to pay some of your optional expenses every year as well, including:
- Registered agent fee: approximately $100
- Domain name registration: $20 to $60
How Much are LLC Taxes in Missouri
Missouri LLCs are typically not subject to income tax (unless you choose to have your LLC taxed as a corporation.) Instead, you must pay personal income taxes on the profits you receive from the company.
If your LLC hires employees, you'll need to pay and withhold payroll taxes from their earnings. And if you sell any goods or taxable services, you will also need to collect sales tax and remit it to the state. This amount can vary depending on the details of your business. We suggest you check with your accountant to get an idea of what you can expect to pay.
Missouri LLC Formation Costs Quick Links
- Missouri Business Registration Online Portal
- Missouri Schedule of Fees and Charges
- Missouri Business Tax Registration
- Missouri Licenses and Permits
- Missouri Secretary of State
- Missouri Department of Revenue
- IRS — apply for an EIN online
- IRS information regarding the federal tax treatment of LLCs
Missouri LLC Formation Costs FAQs
How much does it cost to start an LLC in Missouri?
The minimum cost is $50. But depending on the type of business you are starting and your other needs, it may cost you more.
What is the cheapest way to start an LLC in Missouri?
A do-it-yourself method is the most inexpensive in terms of money spent. However, it’s not the best choice if you don’t have time to spare. The best option for most businesses is an affordable LLC formation service.
Do I need to hire an attorney to form an LLC in Missouri?
No. Not every LLC needs a lawyer. A DIY approach or an LLC formation service will be more than sufficient for most.
Can I pay to form an LLC more quickly in Missouri?
No. Missouri does not offer expedited service. However, online filings are processed immediately.