Entrepreneurship is exciting—the thrill of developing a winning product or service, bringing that idea to life, and making life better for your clients—it’s fun. But unfortunately, it’s not free. Long story short: starting a business has a price tag. LLCs are no exception.
If you’re hoping to start an LLC in Missouri, you’ll quickly learn that you’ll have a pretty long list of fees for forms, licenses, and applications that you’ll need to get started. Some of those are optional fees, and some are unavoidable. In this guide, we’ll walk you through all the costs you can expect when starting a Missouri LLC. By the end, you’ll have a clear picture of how your new business will impact your wallet.
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What’s the least amount I have to pay to form an LLC in Missouri?
If you’re crunching the numbers before diving right in, good on you! Planning ahead is a surefire way to start your business off on the right foot. But let’s make one thing clear: the phrase “cost to start an LLC” is a bit deceptive. That’s because you don’t want to get stuck focusing on the “day one” expenses of business.
That’s right—when budgeting for start-up costs, you need to account for the costs you’ll pay today and the costs you’ll pay a year or two down the road.
So let’s talk start-up costs and ongoing costs for your Missouri LLC. But to keep things simple, here we’ll cover the non-negotiable costs. Later on, we’ll talk about services that are nice to have (but you can live without if you have to).
MO LLC Start-up costs
There are two primary start-up costs in Missouri. The most important one is the Articles of Organization. It’s one of the most expensive ones, too, with a $105 filing fee. But whether that seems like pocket change or an expense you’ll have to budget for, it’s an unavoidable cost. After all, the Articles of Organization is what officially forms your business in the state. Without it, you’re not a recognized business.
Then there are licenses to consider. Missouri doesn’t have a general business license that every entity in the state needs to obtain. Instead, the bulk of Missouri licensing comes in the form of professional licenses. But unfortunately, there are too many to list here, so we can’t give you an index of price tags for them. You’ll have to research which licenses apply to you. The Missouri Division of Professional Licensing is a good place to start that search.
If one or more of these licenses apply to you, then it’s reasonable to expect that you’ll need to pay an application fee.
Ongoing costs for an LLC in MO
If your business lasts (and we’re confident it will), then you’ll have several ongoing costs. These include license renewals and taxes. Let’s dig into those prices and fees.
License renewals
Thankfully, you don’t have to worry about renewing a state general business license, but you might have to renew your professional or occupational permits. Each Missouri licensing board has its own policies for renewals, though, so we can’t really list them here. This guide would be tedious if we did. When you obtain your licenses, we recommend taking note of the renewal requirements for your industry so none of the fees surprise you.
Annual taxes
In Missouri (or any state, for that matter), one of the biggest annual costs you’ll have will be taxes. And one of the priciest taxes is the Missouri income tax. It’s lower than the national average, though. If you’re taxed as a corporation, you’ll pay rates between 1.5% and 5.4%; LLCs taxed as pass-through entities pay a flat rate of 4%. So depending on your personal income, it can be cheaper or more expensive to be taxed as a pass-through entity.
If you’re involved in the sale of qualifying goods and services, you’ll need to collect and pay the state sales tax. Currently, the rate is 4.225%. Last but not least, there might be miscellaneous business taxes that apply to your business. For example, Missouri has taxes for medical marijuana, tires and lead batteries, cigarettes, and more. You can learn more about these and other business taxes at the Missouri Department of Revenue.
What are the discretionary costs to form a Missouri LLC?
When you’re starting your business, your budget is usually pretty tight. Prioritizing costs can get tricky. The costs we listed above are unavoidable. Well, technically, you can avoid them, but you’ll be heavily penalized if you do. And there’s not much point to spending all that money on starting a business only to knowingly let it be dissolved because you didn’t pay your ongoing costs.
But if you can help it, doing the “bare minimum” is probably not the best way to start your business. There are plenty of discretionary costs you can pay for certain services that make life easier. Here, we’ll dig into those costs—and why you might consider paying them.
1. Name reservation application
Naming things can be a bit tricky; after all, sometimes inspiration is a little lacking! And since Missouri doesn’t allow you to use a name that someone else has already claimed, you have to work even harder to pick one that’s unique, memorable, and just right for your business.
It’s a multi-step process, really: you have to brainstorm name ideas, choose just the right words, meet state name requirements, and of course, ensure that the name isn’t already in use (you can check using an Entity Name Search).
If you’re like a lot of people, you probably want to ensure that your hard work doesn’t go to waste once you’ve created the perfect name. So you have to lay claim to your new business name. You can do so either by filing your Articles of Organization, or by filing an Application for Reservation or Renewal of Reservation of an Entity Name. You should only file this form if you’re not yet ready to file your Articles. Otherwise, you’d be wasting your hard-earned cash. Missouri requires a $25 fee for this application, and once you’ve filed it, your name will be protected for 60 days. If you need more time than that, Missouri allows you to renew the reservation twice, giving you a total of 180 days.
2. Obtaining a Fictitious Name
Wait—didn’t we just cover business names? Yes. But there’s a distinction: your business name, which you’ll write in on your Articles of Organization, is the legal name of your business. A fictitious name, sometimes called a DBA, an assumed name, or a trade name, is like a nickname for your business. For example, your legal name might Joseph Smith, but your friends call you Joe for short. Joe is a perfectly valid name, but you can’t put it on legal paperwork. You’d have to legally change your name to do so.
A Fictitious Name acts kind of like a nickname for your business; some LLCs and corporations also use Fictitious Name to establish new product lines or new “businesses” under the LLC “parent company.” But regardless of why you use a Fictitious Name, if it differs from your legal name, you need to register it before you can use it.
Quick note: registering a fictitious name is required, but it does not protect your name for exclusive use. Missouri allows an unlimited number of businesses to use the same fictitious name. However, there cannot be multiple businesses with the same name as a registered entity like a corporation or LLC.
So, before you register your fictitious name, you’ll need to check its availability (just like you’d check for your business name. Once that’s done, file your Registration of Fictitious Name form, pay the $7 fee, and you’re set to go. A fictitious name is good for five years; after that point, you’ll need to renew it.
3. LLC formation services
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Paperwork is a massive hassle. And unless you’re starting an LLC to help other Missouri residents with their paperwork, odds are you don’t want to deal with much paperwork yourself.
The bad news? Paperwork is an unavoidable part of starting a Missouri LLC: the Articles of Organization, the annual report, license applications—the list goes on and on. The good news? You can hire an LLC formation service to do the pesky paperwork for you.
Of course, there’s some cost involved. And while there are a lot of great LLC formation services, they aren’t all created equal. And they all have different price points.
Many LLC formation services offer a wide variety of options, with ZenBusiness offering packages starting at $0 + state fee. You can also take a look at other well known services like LegalZoom, Northwest, and Incfile that have other types of pros.
These services are completely optional; you can DIY your Missouri LLC formation. But many entrepreneurs find the time saved is worth the money. If you do opt to hire a service, please make sure you take the time to understand what you’re buying.
4. MO Registered agent services
Missouri law clearly states that every LLC must designate a registered agent to act as a middleman between your business and the state. Long story short, the registered agent accepts service of process (and any other official communication from the state) on your behalf.
Technically, this is another thing you can DIY; Missouri allows you to serve as your own registered agent. However, in our opinion, it’s worth the expense to hire a registered agent.
Why? For starters, a registered agent’s address becomes part of the public record; anyone in the state can find that address. That leads to spam mail (sometimes worse). Plus, a registered agent must be present at the registered address during all standard business hours. If you serve as your own, you’d be tied down to your location constantly. A registered agent service prevents those annoyances. A service will also help you keep track of annual filing requirements, license renewals, and more.
These services typically charge an annual fee. For example, annual fees for our top 4 Missouri registered agent services range from $99 to $299 per year depending on the service you choose. That said, some offer the first year free if you use them as an LLC formation service.
Quick Note: If you need to later down the line, you can always change your registered agent.
5. Business attorneys
Starting a business is a complicated process. And it’s a legal one. We do our best to make the process seem less daunting with guides like this one. But at the end of the day, we can’t write a guide that would cover every single question every business will ever face. That’s because your business is unique.
Business attorneys, however, can talk you through all the nuances of forming and running your business. In many cases, the advice of an attorney can save you thousands by helping you avoid expensive legal mistakes.
However, the upfront costs of hiring a business attorney can be pretty pricey. For example, many attorneys charge per hour, with rates ranging between $150-$350. Others offer “LLC formation packages” for flat rates that fall between $500-$2000. And of course, those fees vary based on the attorney’s experience, location, and so on.
If you’d like to hire one, we recommend checking out sites like Avvo.com. Their database is nearly comprehensive, so it’s a great way to search Missouri business lawyers. You can also narrow results by location, cost, overall satisfaction rating, and more. It’s the best place to look to find the right legal consultation for your business.
Conclusion
Long story short: starting a Missouri LLC can be a pretty pricey endeavor. If you look at each cost separately, it doesn’t seem too bad (even the $105 Articles of Organization fee is pretty manageable). But when you add them all up or tack on some additional services, the total price tag grows pretty quickly.
Thankfully, since you’ve read this guide, you know what you’re up against. And sometimes, knowing is half the battle—and now you’re armed with all the information you need to budget the start-up costs so you can start your Missouri LLC off on the right foot. We wish you and your new business the best!