Business formation and general operating licenses are the foundation of every legal business in the US. This category covers entity formation (LLC, corporation, sole proprietorship), federal tax IDs (EIN), trade-name registrations (DBA), and the general municipal license that authorizes you to operate within a city. Almost every for-profit business in the country needs at least one license from this category, and most need two or three (e.g., an LLC + EIN + city business license).
Costs run from roughly $50 for a basic city business license to $500+ for combined entity formation and registered-agent service. State filing fees vary significantly — California, Massachusetts, and Illinois sit at the high end, while states like Wyoming, Nevada, and Texas trend lower. Processing time can be same-day for a sole proprietorship to several weeks for a multi-state LLC. The single biggest source of delay across this category is mismatched names between the state entity filing and the city business-license application — keep punctuation identical.
Updated as of May 2026| License type | Typical cost | Renewal | Processing |
|---|---|---|---|
| General Business License | $50–$400 | Annual | 1-2 weeks |
| LLC Registration | $50–$500 | Biennial | 3-10 business days |
| DBA/Fictitious Name Registration | $25–$250 | 3-5 years | 1-2 weeks |
| EIN Registration | $0–$0 | One-time | Immediate online |
| Home Occupation Permit | $30–$300 | Annual | 2-4 weeks |
| S-Corporation Election | $0–$350 | Once (continues until revoked) | 30-90 days (IRS acceptance letter) |
| Nonprofit Incorporation | $30–$1200 | Annual (annual report) + IRS Form 990 yearly | 2-8 weeks (state) + 3-9 months (IRS 501(c)(3)) |
| Sole Proprietorship Registration | $25–$250 | Annual (varies by locality) | Same day to 2 weeks |
A foundational permit required by most municipalities to operate any business within their jurisdiction. Demonstrates that your bu…
$50–$400 · 1-2 weeksArticles of Organization filing required to legally establish a Limited Liability Company with your state. Essential for personal …
$50–$500 · 3-10 business daysRegistration of a business name that differs from your legal name or LLC name. Required in most states before conducting business …
$25–$250 · 1-2 weeksAn Employer Identification Number (EIN) from the IRS used for federal tax purposes, payroll, and business identification. Required…
$0–$0 · Immediate onlineA permit required to legally operate a business from a residential property. Ensures compliance with zoning laws and protects resi…
$30–$300 · 2-4 weeksIRS Form 2553 filing that lets an eligible LLC or C-Corp be taxed as a pass-through S-Corporation. Primarily a federal tax electio…
$0–$350 · 30-90 days (IRS acceptance letter)Articles of Incorporation filed with your state to create a nonprofit corporation, typically as the first step toward applying for…
$30–$1200 · 2-8 weeks (state) + 3-9 months (IRS 501(c)(3))The simplest legal structure for a one-owner business. No separate entity is formed, but most jurisdictions still require a local …
$25–$250 · Same day to 2 weeksBusiness formation is regulated at the state level by the Secretary of State (or equivalent — California Secretary of State, Texas Secretary of State, etc.). The state grants you the legal entity. Federal tax registration (EIN) is handled by the IRS at no charge — anyone telling you it costs money is reselling a free service. City and county business licenses come on top of the state and federal layers, and the rules vary jurisdiction by jurisdiction.
Several states (Alabama, Washington, Nevada, Delaware, DC) also require a separate state-level general business license in addition to entity formation. This is easy to miss because most states do not require it. Always check whether your state is on this short list before assuming an LLC filing is the end of the formation process.
Renewal cadences cluster around two patterns: annual reports (most states) and biennial reports (NY, CA, NE, IA, others). Missing a renewal almost never results in a late-fee path — it typically dissolves the entity administratively, which means re-filing from scratch and losing your filing date.
Jump straight to the city-level guide for the most popular business license in each city (General Business License):
At minimum, most US businesses need three things: a state-level entity filing (LLC, corporation, or sole proprietorship registration), a federal EIN from the IRS for tax filings, and a local city or county business license. Industry-specific permits — food, alcohol, contractor, professional — stack on top of those three foundations depending on what your business actually does.
Plan for $50–$500 in total filing fees to get a business legally formed and licensed in a typical US city. State LLC filing fees range from $50 (Mississippi, Arizona) to $500 (Massachusetts). City business licenses typically run $50–$300 annually. Federal EINs are free directly from the IRS — never pay a third party for an EIN itself.
Both are legal in every US state. A sole proprietorship is simpler and cheaper to start but offers no personal liability protection — your business debts are your personal debts. An LLC costs more upfront and requires annual or biennial reports, but separates your personal assets from business liabilities. Most service businesses with even modest revenue choose the LLC.
A sole proprietorship can be operational same-day in most cities (file a DBA, get a local business license, done). An LLC takes 3–10 business days in most states once you file Articles of Organization, though expedited processing is usually available for an extra fee. Bank account, EIN, and city business license can be obtained in parallel during that window.
Yes — virtually every business license in the US requires periodic renewal. City business licenses typically renew annually. LLC and corporation state filings renew annually or biennially depending on the state. Missing a renewal often means re-applying from scratch rather than paying a late fee, so set calendar reminders 60 days before expiration.
Always confirm current business-licensing fees and requirements directly with the issuing authority before filing. Use these starting points: