A: There are several states known for having particularly LLC-friendly rules, including: Wyoming: In Cowboy State, it costs just $100 to form an LLC and $60 to file each annual report. As an added bonus, non-residents don't need to pay extra to file an LLC, and there's no income tax (meaning less work for your bookkeeper). Nevada: In this Southwestern state, there's no income tax for businesses with gross yearly revenue of less than $4 million, and it costs $75 to form an LLC (plus $200 for a business license and $150 for each annual list of members). Montana: You'll only need to pay $70 to form an LLC in the scenic state of Montana, plus $35 for each annual report. Non-residents don't pay extra to file an LLC here, and most LLCs aren't subject to income tax. South Dakota: There's more to this state than sweeping prairies and dramatic mountain views — entrepreneurs love that it costs $150 to form an LLC and a mere $50 per annual report. Non-residents aren't charged extra, either, and there's no income tax. Delaware: The first state to join the U.S. charges residents just $90 to form an LLC (non-residents pay $200). The real draws, though, are its LLC-friendly laws and taxes, which attract entrepreneurs from all over the country.

A: The overall winner in terms of both up-front and ongoing costs is Montana, and that's true for residents and "foreign" entrepreneurs alike. Just remember that the best state to form your LLC ultimately comes down to your individual preferences and goals.

A: Yes, every state in the United States recognizes LLCs and requires business owners to file official paperwork with their state's government in order to form one.