Budgeting is an important step once you’ve decided to form a limited liability company (LLC). However, understanding all the different expenses you might need to pay can be confusing.
This article will help you understand the costs of starting an Oklahoma LLC.
Keep reading to learn:
- The fees you’ll need to pay to make an LLC in Oklahoma
- Additional expenditures you should consider
- How to pick the best LLC formation method for your business
If you’re ready to make your Oklahoma LLC formation budget, you’ve come to the right place!
Total Oklahoma LLC Cost – Starting at $100
According to the Oklahoma Secretary of State’s fee list, the lowest possible cost of starting an LLC in Oklahoma is $100.
This only includes one item:
- Articles of Organization filing fee: $100
Some businesses will need to get a sales tax permit from the Oklahoma Tax Commission. This costs $20 for your first location and $10 per additional location. You may also need to obtain professional and local business licenses, the costs of which vary.
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Oklahoma LLCs – the Basic Costs
The total cost of starting an LLC depends on a few different factors. However, the bare minimum cost is $100. We’ve laid out your potential required Oklahoma LLC formation costs in the sections below.
Articles of Organization Filing Fee — $100
Articles of Organization are the documents that legally form LLCs. To start an LLC in Oklahoma, you must file articles of organization with the Secretary of State. Fortunately, it’s easier than it sounds. All you really have to do is provide some basic info about your business.
Sales Tax Permit — $20
Some LLCs, but not all, will need to get a sales tax permit. Oklahoma law requires all businesses that sell tangible personal property and taxable services to charge sales taxes. You must get a permit to collect sales taxes from your customers.
You can register for your sales tax permit online. It costs $20 for your first location and $10 per additional location.
Professional Licenses and Business Permits — Various
Depending on your industry, you may need to get a state business license or permit to operate your LLC. Check out the Oklahoma Department of Commerce’s Business Licensing and Operating Requirements to learn more about these rules.
You may also need to obtain a local permit or business license. For instance, the city of Tulsa requires businesses in certain industries to get a business license.
Oklahoma LLCs – Optional Costs to Consider
You should also consider investing in some other expenses. These costs aren’t mandatory, but they can help your business operate more smoothly.
Expedited LLC Filing Fees — $25
The standard processing time for an LLC filing is one to two business days if you file online and up to two weeks if you file by mail. However, you can file in person for an extra $25 fee and have them filed the same day.
Registered Agent Fee — about $100 per year
State law requires all LLCs to maintain a registered agent in Oklahoma to receive legal papers on behalf of the business. You will include your Oklahoma registered agent details in your Articles of Organization for no additional cost. However, there is a $10 fee if you ever need to update your agent.
Many new LLC owners think they should just name themselves as their company’s registered agent. However, they often don’t understand the requirements that are placed on registered agents. Most notably, an agent must always be able to receive documents during standard business hours. Agents’ addresses are also listed publicly online.
For these reasons, we recommend that you use a professional registered agent service instead. These companies usually only charge about $100 each year, and they will take care of all of your LLC’s registered agent tasks.
Check out our Best Registered Agent Services article for some of our recommendations.
Operating Agreement — Variable
An operating agreement is a contract that establishes the rules for how a business will run. They usually include vital details like the rights and duties of the members and how to enter or leave the company.
Oklahoma law does not mandate that LLCs have operating agreements. However, we strongly suggest that new businesses make one. While you can legally write your own operating agreement, it’s probably not the best idea unless you have prior experience in law or business.
You can choose to hire a lawyer to write your LLC’s operating agreement. This will ensure you have a high-quality contact that addresses all of your wants and needs. However, it’s also expensive. So if you’re on a strict budget, you may prefer to hire an LLC formation service to create your operating agreement for as little as $39.
DBA Fee — $25
Many LLC owners decide to operate their businesses under a different business name than what is on the official paperwork. For instance, it’s common to drop the “LLC” from a company’s name to make it more casual. Or a business owner might want to change their LLC’s name to reflect changes to the company’s goods or services.
If you want to use a name other than your LLC’s official legal name, you must register a “doing business as” or “DBA” name. In Oklahoma, DBAs are called “trade names.”
Name Reservation Fee — $10
If you have chosen a business name for your LLC but aren’t ready to create your business entity just yet, Oklahoma allows you to reserve an LLC name for 60 days. This will prevent other people from taking the name during this period.
Domain Name — about $20 per year
A website is vital for a business to succeed in today’s economy. But before you can make the perfect website, you must buy a domain. Fortunately, domain names are relatively inexpensive and can be easily purchased by anyone.
When choosing a domain, it’s essential to move quickly. If someone else gets it first, you may have to pick a new domain name. You should also watch out for “domain squatters.” They quickly buy domains they think new LLCs might want to use and resell them at a higher price.
You can get a domain from GoDaddy.com or a similar website for about $20 to $50 per year. These businesses frequently have sales, so you can often get your domain even cheaper.
Getting an Employer Identification Number (“EIN”) — Free
An EIN is a 9-digit identification number that is given to a business by the Internal Revenue Service. It’s similar to a social security number for your LLC. While some LLCs must get an EIN, others aren’t legally required to get one.
However, we suggest that all LLCs apply for an EIN, even if you don’t have to. Many banks make you have an EIN to open a business bank account. Additionally, an EIN can help protect against identity theft because you can keep your SSN private.
You can apply for an EIN online or by mailing Form SS-4 to the IRS. Either way, your EIN is always free. So, you should never pay someone to get an EIN for you unless it’s part of a larger service package.
Foreign LLC Qualification Fees — about $100 per extra state
If you want to grow your business and operate in more states, make sure you budget for some additional expenses. While you won’t have to form a new LLC in every state, you must register as a foreign limited liability company in each state where you plan to do business.
Foreign LLC filing fees will vary between states, but it usually costs around $100 per state.
Writing Formation Costs Off
Your LLC formation costs can usually be deducted as business startup expenses on your income taxes. The IRS provides a significant amount of guidance on this topic, so check out the IRS website to read more about deductions.
LLCs are typically “pass-through” tax entities. For this reason, LLC owners can often deduct up to $5,000 in startup costs in the business's first year.
Jennifer decides to start a single-member LLC and open a hotel in Tulsa, Oklahoma. She plans to have three employees. Her formation costs are as follows:
- Oklahoma LLC Articles of Organization: $100
- Oklahoma Sales Tax Permit: $20
- Tulsa Initial Hotel License: $75
- Tulsa Hotel License Processing Fee: $5
- Operating Agreement: $50
- Registered Agent Fees: $100
- Name Reservation Fee: $10
- DBA Fee: $25
- Web Domain Costs: $35
As a pass-through entity, the LLC won’t be required to pay income tax. Jennifer will simply include her profits from the business and any deductions on her personal state and federal income taxes.
Jennifer's total formation expenses were $420. Before she deducted these costs, her total taxable income was $54,000. However, by deducting her start-up expenses, she reduces her taxable income to $53,580. This will lower her 2022 federal income taxes from $7,629 to $7,536.
While this is not a huge drop, business owners who commit to deducting their costs will be able to save a significant amount of money over time.
Cheapest Way to Start an LLC in Oklahoma
When choosing the most suitable Oklahoma LLC formation method, you need to take the particular needs of your business into account. To help you make this decision, we’ve detailed some of the most common approaches below.
Formation Service – $39 + state fees
A popular choice is to have an LLC formation service manage the entire process. While these businesses don’t hire lawyers, they specialize in forming business entities. They have plenty of experience, so you can trust that they will do it right.
A business formation service is a good option for many LLCs. The advantages of this method include:
- 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.
Still, formation services aren’t right for all LLCs. The disadvantages of this approach 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 or business services 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.
Another option is to retain an attorney to form your Oklahoma limited liability company. This method will give you the peace of mind that comes with working with an experienced professional. However, hiring an expert is going to cost more. Many lawyers charge an hourly rate for their services, often several hundred dollars per hour.
Despite the costs, engaging an attorney comes with significant 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.
However, the negative aspects of this method often outweigh the advantages:
- 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
Of course, you can always choose to form your LLC yourself. Just don’t forget that your time is not free. The hours you spend filling out LLC formation paperwork is time you won’t be able to invest in improving your business.
Still, there are clear benefits to the DIY formation 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.
But as with all things, there are also disadvantages:
- 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 Oklahoma LLC Fees: How Much Will it Cost to Maintain your LLC?
To stay compliant with Oklahoma law, you must file an annual certificate with the Secretary of State each year. You can file your annual certificate online or submit a paper form. There is a $25 filing fee.
You may also be required to renew your licenses and permits.
Additionally, some of your optional expenses may be due annually. Some examples of what you might owe include:
- Registered agent service fee: approximately $100
- Domain name registration: $20 to $60
How Much are LLC Taxes in Oklahoma
LLCs are classified as pass-through tax entities by default. This means the company itself is not subject to income taxes. Rather, the LLC’s owners will report the profits they receive from their business on their personal income tax returns.
Oklahoma used to have a business activity tax (BAT) that LLCs had to pay. However, the BAT was repealed after 2012. So, LLCs are not required to pay taxes unless their owners choose to be taxed as a corporation.
Oklahoma LLC Formation Costs Quick Links
- Oklahoma Online Filing
- Oklahoma Fee List
- Oklahoma Taxpayer Access Point
- Oklahoma Secretary of State
- Oklahoma Tax Commission
- IRS — apply for an EIN online
- IRS information regarding the federal tax treatment of LLCs
Oklahoma LLC Formation Costs FAQs
How much does it cost to start an LLC in Oklahoma?
The minimum cost is $100. But depending on your industry and location, it may cost more.
What is the cheapest way to start an LLC in Oklahoma?
A do-it-yourself approach is the least expensive in terms of cash spent. However, if you consider the value of your time, the most cost-effective approach is usually an affordable LLC formation service.
Do I need to hire an attorney to form an LLC in Oklahoma?
No. You don’t need a lawyer to form the average LLC. You will usually be just fine with a DIY method or an LLC formation service.
Can I pay to form an LLC more quickly in Oklahoma?
Yes. If you deliver your Oklahoma articles of organization in person, they will be filed the same day for an additional $25 fee.