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Starting an LLC, or limited liability company, costs money in nearly every region. The fees are typically nominal, but they are usually enough to prevent just anyone from starting a company before putting much thought into it. The most commonly observed fee is the one that is charged when filing the articles of organization, which should be drafted carefully since there is also a fee to change them. Reserving a name, whether fictitious or not, also tends to cost money in any area. Even converting or dissolving the company is fraught with LLC fees, which is a factor that should be considered when first starting such an entity.
The first of many LLC fees is the cost associated with initially filing the articles of organization. This document typically includes the name and address of the LLC, its registered agent, and any managers and members. It should also list the nature of the business so that the point of the company is clear, though it should be kept fairly broad since changing the articles of organization also costs money. The LLC fees for filing tend to vary by jurisdiction, but in general, the cost for amendments to the articles is lower than the initial filing fee.
Many companies choose to reserve a unique name for their company so that no one else can use it. They may apply with their own name, or they can make up a fictitious name to use, but both come with LLC fees. Additionally, transferring the name to another owner also usually costs money. Those looking to reduce the fees associated with these tasks can make the changes online, instead of going to the appropriate government agency, as many areas offer reduced LLC fees for online procedures.
LLC fees do not disappear when the owners of the company decide to dissolve it, as this action costs money, as well. In fact, filing articles of dissolution typically costs as much as filing the articles of organization when starting the company. In addition, it is usually necessary to pay to file a final franchise tax report during the last year of the LLC's existence, which should be considered before dissolving the company. Finally, those looking to change their company from a partnership to a limited liability company may also find themselves faced with fees, so they should make sure the change is worth it before completing this task. In most cases, they should also expect to pay the fees associated with starting a new company when they switch their current business to an LLC.
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