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For entrepreneurs interested in forming an LLC (Limited Liability Company) S-Corp or Corporation, there are three main routes to take. Option one, do it yourself by researching the requirements in your state and filing the proper documents and hoping you did everything correctly. Option two, hire an attorney to do much of the work for you. Option three, use one of the affordable online document filing services to get you through the process. For those interested in using a document filing services to form an LLC, this is our list of the top 5 best LLC filing services for 2019.
Top 5 Best LLC Filing Services 2019
#3 Northwest Registered Agent
#4 Rocket Lawyer
#5 Swyft Filings
Created by Ross Buhrdorf, ZenBusiness started in large part as an alternative to LegalZoom. The goal of ZenBusiness was to be the best in business formations, offering many services that helped people with all types of legal matters for their business. LLC formation has become one of its prime services. By offering different packages, ZenBusiness has managed to exploit a gap left by LegalZoom, which other companies in the field are now taking advantage of.
From their website,
Who is ZenBusiness? We are a small business that is excited about helping other entrepreneurs realize their dreams of creating and growing a successful business. By making business formation easy and affordable, we hope to foster a small business community where owners can connect on a local and national level and help each other grow.
Based in Austin, Texas, ZenBusiness also offers a worry-free compliance guarantee with their Pro and Premium LLC formation plans. A nice feature for business owners to have, knowing ZenBusiness will take care of every legal form and annual report as part of their services. And if they miss something which causes a fine, they will pay the fine.
Pricing: ZenBusiness offers three different pricing packages.
Starter Plan: $49 per year, plus the state fee
- Standard filing service
- Formation in 1-3 weeks
- Name availability search
- State filing plus verification
- Articles of organization
- Personalized dashboard
- Registered Agent
- Operating agreement plus bylaws
- Phone and chat support
Pro Plan: $149 per year, plus the state fee
- All Starter services, plus
- Formation in 4-6 business days
- Worry-free guarantee
- Employer ID Number or EIN
- Banking resolution
Premium Plan: $249 per year, plus the state fee
- All of the Pro services, plus
- Rush filing service
- Formation in 1-3 business days
- A business domain name, website, & email address
- Domain name privacy
- Formation in 3 to 5 business days
ZenBusiness PBC (Public Benefit Corporation) was founded to help those who wanted to create an LLC to do so with ease. For those who want to start small, you can upgrade to bigger packages if you desire. The reputation that ZenBusiness has built up over the years is considerable.
ZenBusiness Trustpilot Reviews
Since its foundation in 2004, Incfile has helped over 250,000 companies with their LLC formation efforts. The attributes of Incfile are considerable as they have improved and adjusted their services over the past several years. This includes drafting operational agreements, filing mandatory reports, and other services associated with LLC formation.
Plus, non-profit organizations can use the LLC formation services of Incfile as well. This means that you can create a non-profit and file all the appropriate forms using the services of Incfile.
- BBB Rating: A+
- Lifetime Customer Support
- Online Access for Incorporation Documents
- First Year Free for Registered Agent Services
Pricing: Recently, Incfile has changed its pricing structure, which is now similar to ZenBusiness. The pricing structure of Incfile is based on three different packages. Each package offers a different level of benefits.
Silver: $0, plus the state fee
- Articles of Organization preparation and filing
- Searches for Unlimited number of names
- Free Registered Agent Services for the first year
- Business banking account with Bank of America
- Unlimited email and phone services
- Organizer statement and resignation forms
- Status tracking for online orders
- Business tax consultation and next day business processing
- Lifetime alerts via text message and email
- Business website & electronic delivery
Premium services are not included with the Silver package; you will have to pay for them individually.
Gold: $149, plus the state fee
You get all the necessary services listed in the Silver package and free premium services such as the following;
- Employer ID Number or Tax ID
- Operating Agreement
- Prep and Filing of IRS Form 2553
- Bylaws of corporation and meeting minutes of corporate organization
- Banking resolution & express shipping
Platinum: $299, plus the state fee
You get everything in the Gold package along with the following
- Free domain name & email service
- Free business contract templates
- Platinum kit for business formation
The fact that the company has an A+ rating from BBB alone should make this company worth considering. The multiple price packages are excellent, and the selection of services is also good.
Northwest Registered Agent
#3 Northwest Registered Agent
From their website,
At Northwest Registered Agent, you’ll find an in-depth assortment of business services, free legal forms, and how-to guides, each one created with the single purpose of helping people start and operate businesses. That’s what we believe a registered agent should be—a real business solution that makes doing business easier and better. Whether you’re seeking registered agent service in any US jurisdiction, want to start a company, looking for a free LLC operating agreement, want simple instructions on how file an annual report, or even want to do something obscure like learn how to reinstate a corporation, Northwest Registered Agent is here to guide you.
One of the most familiar names in terms of registered agent and LLC formation services, Northwest Registered Agent, has become one of the largest companies of its type in the country. In business for over two decades, the company is well-known for its high-quality customer service, reasonable pricing options, and a lack of pushing sales. The latter is mostly because only the registered agent services have an annual fee.
Pricing: Northwest Registered Agent offers two primary services, LLC formation, and registered agent services. As the name implies, they are primarily known for their registered agent services. However, they also have an LLC formation service, which many take advantage of. This is mostly because those who start up a business and need LLC formation will probably need a registered agent as well.
Registered Agent: $125 per year
Keep in mind that registered agents and LLC formation are not combined; they are separate services. With this purchase, your business will have a registered agent that is required by law in all 50 states. This means that the state has a legal way of contacting you for sending forms, notices, and the like. You can act as your own agent, but that can be problematic.
LLC Formation: $100, plus the state fee
LLC Formation + Registered Agent = $225 plus the state fee
This service is a one-time fee, which means that all aspects of LLC formation filing are performed with just one payment. Keep in mind that this service also includes a free year of registered agent services. But after that, it is $125 per year. This means that you enjoy a significant discount for your first year of registered agent services if you include it with your LLC formation service.
One advantage that Northwest Registered Agent offers if you use their registered agent services is that your personal information is kept private. This means that your business address for receiving notices and junk mail is through Northwest Registered Agent, and not your home address. This can be most advantageous for many types of businesses.
#4 Rocket Lawyer
Founded in 2008, Rocket Lawyer is one of the more popular online legal technology companies on the list. Designed to help small to medium-size businesses along with individuals, the purpose of the company is to provide online legal services that include everything from incorporation to legal documents to estate plans and more.
Although the company covers a broad range of interests in terms of the legal documents and assistance they provide, the main target is entrepreneurs and those just starting up small to medium-size businesses. Initially, the company charged for all its services individually but added a monthly subscription fee to cover most of what they offer, which helped to grow their business exponentially.
Pricing: There is only one monthly pricing service, which makes Rocket Lawyer different than most in the field.
Premium: $39.95 per month, plus the state fee
If you are not a premium member, you will have to pay for each service that they provide. Premium membership includes the following;
- Access to Legal Documents
- Attorney Services: Ask questions, get 30-minute consultation, access to documents
- Business Incorporation Filing: Free for the first incorporation, 25% off for future incorporations
You can hire Rocket Lawyer as a registered agent for 25% off their standard fee. Plus, you can hire an attorney for 40% off their usual price.
Keep in mind that if you only need a specific service from Rocket Lawyer, such as LLC formation, then it is a one-time fee. However, you might want to consider the premium service as it offers plenty of features for a price that is comparable to similar services provided by different companies. Otherwise, you can pay a one-time fee for the various services if you choose not to go Premium.
#5 Swyft Filings
While Swyft Filings is relatively new, having been formed in 2012, they have managed to carve a niche in the online LLC formation service niche. They have done so in large part by creating a simple set of services with three pricing packages. Plus, they offer a 100% satisfaction guarantee and focus on providing reliable customer service.
The emphasis of Swyft Filings is to provide fast, proper service when it comes to LLC formation. This means that their customer service operations are geared towards that endeavor.
Pricing: You’ll find three basic pricing packages, Basic, Standard, and Premium.
Basic: $49, plus state fee
- Preparation and filing of Articles of Organization
- Lifetime customer support
- Name Availability verification
- 12-month Free domain name
- ComplianceGuard alerts
- 30-minute Business tax consultation
Standard: $149, plus the state fee
- All from Basic package, plus the following;
- EIN or Federal Tax ID number
- LLC operating agreement
- Organizational minutes
- Banking resolution
Premium: $299, plus the state fee
- All from Standard package, plus the following;
- Business website
- 90 days of hosting
- Digital corporation kit
You can upgrade to different packages if you choose, depending on the needs of your business. This means that you can select what works best for you at a price that fits your budget.
Corporations, S-Corps, Non-Profits, LLCs and Sole Proprietorships
If you get hit by the idea of starting your own business, you’ll need to choose which kind of business structure your company should use. Which business structure is right for you can depend on how you plan on operating the business.
Different business types can affect how you handle taxes and liabilities that can affect you and your company as a whole. Each kind of business structure has its pros and cons. You should assess your options and choose the right one that suits your vision and dreams. Once you’ve picked a business structure that you’re happy with, you can make it a part of the business plan.
What are Corporations?
The first thing to know about corporations is that there are a few different subtypes. A corporation owned by shareholders is called a C Corporation. The shareholders choose whom they feel would be a suitable board of directors to manage and oversee the business. The board of directors has to make decisions that benefit their corporation and match the ideals and ideas of the shareholders.
The main benefit of choosing a corporation is that owners have a limited amount of liability when it comes to company debt. Corporations can also enjoy lower tax rates as profits are shared. It’s also quite simple to transfer the ownership of a corporation if it comes down to that.
The key downside of a corporation is that there’s much paperwork involved, and running the business is generally more expensive. It can also take longer to come to a unanimous decision because there are so many people on the board of directors, and all of them (or at least most of them) have to agree.
What are S-Corporations?
S-Corporations have different financial processes. They distribute the income of the business to the shareholders for taxation. One key benefit for shareholders with an S Corporation is the single layer of tax.
There are still drawbacks to having an S Corporation, however. For a start, the laws around these corporations can be challenging to understand and navigate. Owning an S Corporation is likely to involve working with an attorney or an accountant. There could also be stock restrictions in place. Another downside is that officers and shareholders may be limited to “reasonable” salaries.
What is a Non-Profit?
Non-profit businesses are formed to serve some benefit to the public. This can include community foundations and private foundations. Non-profit organizations are afforded a tax-exempt status as laid out by Internal Revenue Code Section 501(c)(3). Non-profit organizations can be made for all kinds of missions, but most of them are some human service organizations.
Their tax-exempt status is the obvious benefit of owning a non-profit business. Any founders or directors of a non-profit organization also get to make the most of limited liability for any company debt. The downsides of this kind of business are that there’s much paperwork involved in launching and operating a non-profit organization. They also have high costs, and the public will always scrutinize the income and expenses to ensure a non-profit appropriately handle their money.
What are Sole Proprietorships?
A sole proprietorship is easily one of the simplest kinds of business to create. This kind of business sees one person write out a business plan and then go on to form, own, manage, and control their business. As the name implies, you are in charge of everything and all the profits are yours. That also means that any losses are also your responsibility.
The advantages of operating a sole proprietorship are that they are easy to manage, decisions are made easier, and there’s a lot of flexibility. The downside is that you are wholly liable for any business financial problems. You also have to pay personal taxes on the net profits of the business.
What are General Partnerships?
General partnership businesses are companies owned by two people (or more). This kind of business structure allows for partners to provide funding to start up the company. All partners are responsible for managing the company. Partners may choose to create an agreement that outlines their specific role for the company.
It’s easier to start a general partnership than other types of business. They have fewer start-up costs as multiple people provide financing. As is the case with a sole proprietorship, the partners in a general partnership are all responsible for any business debts. Partnerships can also reach an impasse or fall apart if the people involved don’t work well together.
What is an LLC?
An LLC is a “limited liability company.” These are a sort of combination between a corporation and a partnership that operates as a single legal entity. The people involved with an LLC have the same single taxation enjoyed by partners of a partnership.
Forming an LLC is an attractive choice for entrepreneurs because individual members have a limited liability over business debts. These companies can also be created without the endless paperwork required for a corporation. The downside to starting an LLC is that it can be more expensive than sole proprietorships or a partnership.
An LLC or Limited Liability Company is a business formation that was created back in the 1970s as an alternative to a corporation. It is described as a cross between a sole proprietorship, partnership, and corporation. The basic premise behind an LLC is that the member or members of the LLC cannot be held personally responsible for tax debts, company liabilities.
Even if the business is forced to file bankruptcy the members are shielded from having to spend their own money to cover any debts or payments. LLCs are not subject to corporate tax, the owner or owners simply list the profits and or losses on their personal income taxes.
LLC vs. Corporation
All LLC businesses are viewed in two different ways as a legal entity and tax entity. Each of them is handled in a unique way in order to ensure that both parts are taken care of. As a legal entity, this is how the courts and different levels of government view a company.
The tax entity part of a business is how it is seen by the government and how the tax bill is determined. Here are some details to better describe both legal entities and tax entities
Setting up your business as an LLC, even if you are a single individual has its distinct advantages and how it is taxed is definitely one of them. You can set up an LLC as a single person (sole proprietorship) or multiple-member (partnership) and then taxed accordingly.
There is an additional option that the IRS offers which makes it possible to request to be designated an S-Corporation or C-Corporation. Just by simply filling out more paperwork, while you can choose the option of an S-Corporation or C-Corporation as an LLC, it is made difficult and cumbersome by strict guidelines to qualify for.
If you decide to look into the S-Corporation or C-Corporation option you must file the paperwork to be designated an S-Corporation, by filing an IRS form 2553 and if your business qualifies it will be taxed accordingly. If you file an IRS form 8832 and qualify it will be taxed as a C-Corporation.
As a C-Corporation, there is an additional amount of taxation or double taxation called the corporate tax. This type of tax does not get levied against an S-Corporation.
Establishing your business as an LLC helps you to shield you from paying a corporate tax on profits. It is seen by the IRS as a pass-through entity for tax purposes and therefore you as the owner are considered self-employed.
As such, you only pay individual tax and in the case of a multi-member LLC, each person would be taxed separately. As far as taxation goes, it is very important that you weigh all of your options and consider them very carefully before you make any decision that involves taxes.
How To Form An LLC
There are a few different kinds of business entities and structures, including Corporations, S-Corps, and Limited Liability Companies (LLCs). If you are interested in forming an LLC or want to know how to create an LLC, then follow these easy steps.
Step One: Name the LLC
The first thing to do when forming your LLC is to give it a name. It should comply with the State rules regarding company names. You can find those rules on the Secretary of State website for your state. While the rules can vary between states, here are some principle guidelines;
- The name will be unique and different from other LLCs operating within the state. You should have no problem checking the state database for your name. It’s also possible to reserve a name so no one else can claim it. This reservation costs a fee and is only available for a limited time, however. This does help ensure that your company can use the desired name once all the paperwork has been filed. Once again, though, a reserved name can’t breach the trademark of another business.
- The company name has to include “LLC” or a similar moniker. Which terms and abbreviations are considered appropriate can vary by state. You can find the rules for your state on the state website.
- The company name can’t include terms such as “insurance,” “corporation,” and “bank.” Once again, different states can have their own rules on this.
Step Two: Choose a Registered Agent
All states require an LLC to have a registered agent for the service of process. That means that an agent has to work with your LLC and physically accept the legal papers on your behalf in the event they are issued. There’s no need for this agent to be an individual person, however. It could be any resident of the state where you do business or a business entity that has registered to do business in the state. What matters is that the agency/resident has a physical address within the state of operation.
Step Three: File Articles of Organization
You’re now ready for the third step, filing paperwork with the state so that the LLC is legally recognized and can begin operation. This is sometimes referred to as “filing articles of organization” and is also called “certificate of formation” depending on the state. The process doesn’t change much between states and names, however. You have to supply information about the LLC to the state and pay the filing fee. You will generally be asked for necessary information such as the name, address, and ownership of the LLC.
This is also when you provide the registered agent for the business. This is the person/entity responsible for accepting legal paperwork should your company be used. The fees for filing this paperwork are nominal, but they can vary between states.
Step Four: Create the Operating Agreement
While an operating agreement isn’t always required by law, they serve the same purpose as the bylaws or partnership agreement for a corporate entity. They outline the rules of ownership and operation of the business. Here’s what should be in this operating agreement;
- What percentage of the business each member holds
- The voting power, rights, and responsibilities of each member
- How the company allocates profits/losses
- The means of management and the rules outlining meetings and votes
- “Buy-Sell” provisions that outline the procedure to be followed if a member wants to sell their interest becomes disabled or passes away.
Step Five: Apply for EIN and Review the Tax Requirements
Your LLC requires an IRS Employee Identification Number (EIN) unless you are a single-member LLC and don’t have any employees. It is simple enough to obtain this EIN. Just complete the form on the IRS website.
Many limited liability companies and corporates have to register with their Comptroller of Public Accounts. Many states also require that LLCs file annual reports with their Secretary of State. There may be other requirements you need to adhere to as well, such as having to file annual franchise tax reports. Make sure to check the website for the Comptroller of Public Accounts for your state to stay updated on the latest requirements.
Notice of Intent, Business License, Business Bank Account, and Business Credit Card
Notice of Intent
While the notice of intent isn’t a requirement for all states, some will require that you publish a notice in the local newspaper stating that you intend to form a company.
You need to do this several times across several weeks to obtain an “affidavit of publication” through the filing office for your state. Check with the rules on LLC formation for your state to see if you have to do this.
You will be required to obtain a state license or local license to legally operate within some industries, such as a liquor license. The kind of business you run and where you are working will determine whether you need a permit or not. Check with the Department of Licensing and Regulation for your state to see what licenses you need.