Should You Use a Professional LLC Formation Service?

Depending on the state you choose to form your business, you may be able to incorporate your LLC by yourself. It really depends on your ability to work with the state.

On the other hand, If documents and bureaucracy get you sick, you should definitely let a professional service take care of the LLC filling.

Using an online LLC formation service can save a bunch of time, and when you’re running a business, time is money. 

These are the top 5 LLC formation companies: 

  1. ZenBusiness
  2. Incfile
  3. Northwest
  4. LegalZoom
  5. Inc Authority

The best thing about an online LLC formation service is that they give you the headspace to focus on your business while they take care of the paperwork.

But an LLC isn’t the only business structure the business formation services offer. They also provide business structure forms like:

  •         Nonprofit – organizations eligible for tax exemptions (can be structured like LLC and corporation)
  •         Sole proprietorship – a business that legally has no separate existence from its owner.
  •         DBA ( Doing Business As) – a registered name which the business operates under; also known as a “trade name”.
  •         Corporation

o   C – Corp – pay tax on the business income and tax on the income you receive as an owner or employee (separate tax).

o   S – Corp – doesn’t pay tax as a business. The owner/s report company revenue as personal income.

The Best LLC Formation services Break Down

Hiring an online LLC formation service will help your business tremendously. But which one suits your needs?

We’ve done extensive research and included our own experiences to give you a realistic view from our perspective, a customer. Here’s a quick rundown of the best LLC formation services in 2020:

#1 ZenBusiness

ZenBusiness has steadily offered excellent services with simple and affordable pricing. This makes them our overall favorite for LLC formation.

Their cheapest package starts at $39, and as prices go up so do the services. It’s not just the starting price that’s cheap. Even when you compare more expensive packages to other online services, you’ll see that ZenBusiness is leading the way.

If you don’t want a specific package, ZenBusiness gives you the pleasure to buy any service you’ll need separately. These are called addons.

Sounds great not having to pay for something you won’t use. This way you can make your own bundle of services that you actually need.

Customer support is also one of the strong sides of ZenBusiness. They are super responsive and easy to reach.

Overall, ZenBusiness is perfect for starting a business. Their mix of great pricing and excellent services is easily recommendable and #1 on our list.

But don’t just take our word for it. You can find a huge amount of positive feedback in their customer reviews.

 Find out more about ZenBusiness LLC service.

 

#2 Incfile

Our runner up for LLC formation is also known for being affordable.

Incfile offers a free year of registered agent services with all of their packages. Additionally, you also get a 30-minute business tax consultation.

Starting from the Silver package that costs $0. Basically, you’d just have to pay the state fees (which differs from state to state to form your business.

We applaud them for this offer. They make it very easy for new businesses to get a head start. It’s super convenient since businesses get hit left and right with charges.

After a year, if you’d want to renew the registered agent service, you’ll be charged $119.

Although they do a lot of things right, we felt like their customer support was a little underwhelming. That doesn’t mean they are bad but at times we’ve had difficulty reaching them.

Nevertheless, your issue will get resolved, but other service providers were quicker.

 

#3 Northwest

Northwest is definitely the most straight-forward online service for forming an LLC. Their plans are simple and effective.

There’s no confusion when it comes to pricing. Forming your LLC with Northwest will cost you $39. To add to this, you also receive one-year registered agent services for free.

It’s great to know that you won’t be divided based on how much you pay. Many companies are known for trying to nudge you to spend more for better services.

Northwest also has top-notch customer support. It’s what they are known for. A corporate guide is assigned to you whenever you have a problem. They are super friendly and knowledgeable.

Getting a response from them was really fast. Even if you send an email, you’ll receive a response by the end of the day.

If you value great customer support, Northwest is hands down the winner in this category.

We have a separate article going in-depth about Northwest Registered Agent LLC services.

 

#4 LegalZoom

Another great LLC formation service is LegalZoom. They are the most reputable service when it comes to forming a business.

With over 4 million business entities formed, you can be sure that they are more than capable to handle your business.

Their prices for LLC formation start from $79. Aside from the formation all of the other services are a little more expensive than other LLC service providers.

LegalZoom is the best if you need further legal services besides business formation. They offer tax advice, guidance, or attorney help if required.

Their customer support is a big plus and they are even available during the weekend.

Overall, you’ll end up paying a little bit more with LegalZoom than you would for the formation services above. But if you value brand power, LegalZoom is definitely considerable.

Take a look at LegalZoom services compared to others, our team analyzed them head to head. 

 

#5 IncAuthority

Similar to Incfile, IncAuthority is also one of the more affordable options. Registering a business is free, and you also get to enjoy having a registered agent for a whole year as well.

Their services don’t go much beyond business formation. But if you don’t require any, that’s great since you’ll get everything you need.

If you want a premium package, you will notice their prices are higher than most. This is why we will only recommend their “free” package. Everything you’ll find in their premium packages, you’ll find elsewhere for a lower price.

Customer support is somewhat similar to LegalZoom’s. They are responsive and solve your issue in a timely manner.

Overall customers are satisfied with the service provided by IncAuthority. You’ll be able to find great customer feedback anywhere online.

If you are looking for simplicity and affordable pricing, IncAuthority is a great option to go for!

How much does it cost to form an LLC, Corporation & Nonprofit?

As you can see with our company formation calculator, the cost to form an LLC varies. 

The cost of forming a business is greatly influenced by the following main factors:

  • Which state you decide to form your business
  • Whether you have a registered agent in the state you are forming your LLC 
  • Whether there are annual fees 

To keep thing simple below is a list of filing fees organized by state:

State LLC Filing Cost LLC Annual Fee
Alabama  $212 $100 minimum
Alaska $250 $100
Arizona $85 No Annual Fee
Arkansas $50 $150
California $75 $20 Biennially + Annual franchise tax 
Colorado $50 $10
Connecticut $120 $20
Delaware $110 $300
Florida $125 $138.75
Georgia $100 $50
Hawaii $50 $15
Idaho $100 No Annual Fee
Illinois $179 $75
Indiana $98 $30
Iowa $50 $45
Kanas $160 $50
Kentucky $40 $15
Louisiana $105 $35
Maine $175 $85
Maryland $197 $300
Massachusetts $520 $500
Michigan $50 $25
Minnesota $155 No Annual Fee
Mississippi $53 No Annual Fee
Missouri $52 No Annual Fee
Montana $70 $20
Nebraska $109 $10
Nevada $425 $350
New Hampshire $102 $100
New Jersey  $130 $75
New Mexico $50 No Annual Fee
New York $205 $9 Biennial
North Carolina  $127 $200
North Dakota $135 $50
Ohio $99 No Annual Fee
Oklahoma $104 $25
Oregon $100 $100
Pennsylvania $125 No Annual Fee
Rhode Island $156 $50
South Carolina $150 No Annual Fee
South Dakota $150 $50
Tennessee $308 $300 
Texas $300 No Annual Fee
Utah $76 $20
Vermont  $125 $35
Virginia $100 $50
Washington $200 $60
Washington D.C $220 $300 Biennial
West Virginia $125 $25
Wisconsin $130 $25
Wyoming $102 $50

 

The above table shows the filing cost of forming an LLC by state as of 2020.

 

Fees/Ongoing Costs of Running an LLC Corporation or Nonprofits

When forming a business or a non-profit organization there are almost always fees heading your way.

The most common types of fees that are involved with filing and upkeeping your business are Initial filing fees and Annual/Biennial fees.

 

  • LLC Filing Fee
    •  The LLC filing fee is a one-time fee, which is paid to the state you file your LLC in.
  •  LLC Annual/Biennial Fee:
    • This fee is obligatory to keep your business running. It’s a fee you pay for “refreshing” your LLC. Basically, you pay the state to keep your LLC in good standing and in compliance.

 

It would be great if these were the only fees right? Well, unfortunately, there are a couple of more things that will set you back money-wise.

Besides the cost, if you are interested, find out how long it takes to set up an LLC.

 

Minimum Annual LLC Taxes

LLC taxes are also required to be paid for maintaining an LLC In some states. That’s why it’s important to consider which state you form your business in. We have a separate article where you can find the best states to form your LLC.

These taxes are also known as franchise taxes. The amount varies depending on the location of the state your business is formed in.

In the states that require such, the average tax amount is anywhere between $100 to $400.

 

Registered Agent Fees

Even though you can be your own registered agent, there are benefits when hiring one instead.

A registered agent is simply an individual or a business entity that’s assigned to receive legal papers directed to your business.

If you form your LLC with an online service, they probably also provide registered agent services. 

If you choose to not bother yourself with paperwork, hiring one can cost you anywhere between $100 to $300.

Some online services give you the first year for free but when renewing the contract you have to pay annually.

Be sure to discuss this matter when renewing your contract. Some companies won’t bother telling you and charge you without you knowing.

 

Business License Renewal Fees

Your business license must be renewed annually. You’ll probably receive a notice one month before your license expires. This fee usually ranges between $20 and $100. 

Conclusion 

That’s a wrap!

We hope that you found our content and business formation calculator of help to you.

Good luck on your entrepreneurial journey, we are always here when you need us!

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