Best LLC Filing Services (Test Comparison) – The Top 3 Are Cheap!

Laptop on a desk, person forming an LLC online

Table of Contents

The Ultimate LLC Service Test and Comparison

There Is A Lot Of Noise Around The Various LLC Service Providers. We Cut Through It And Review The Top LLC Companies In The Game Today.

The Best LLC Service Providers Are:

For entrepreneurs interested in forming an LLC (Limited Liability Company) S-Corp or Corporation, there are 3 main options to take

Option one – Do it yourself by researching the requirements in your state and filing the proper documents, and hope you do 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 filing service to form an LLC, this is a review and comparison of our picks for the best LLC filing services for business formations and incorporations in 2021.

Best LLC Filing Services Review

Gold Cup for winners of best LLC services

We know it can be hard to pick the best LLC service for your business. This section lays out the 7 best LLC service providers on the market, giving you insights into key areas such as pricing, features, processing time, and help and support.


#1 Northwest Registered Agent  Editor’s Choice!  (VIP Service!)

The Leader In Registered Agent Services & Business Formations!

Offices In 50 States!

Pricing

VIP Monthly Plan Option, Any State!
Northwest Registered Agent Monthly VIP Plan
California: LLC Formation + Registered Agent + State Fee = $37/mo. 😲
$37 Gets You Out The Door With A Newly Formed Business in California or Georgia! 😲
https://northwestregisteredagent.com

  • California LLC $37/mo
  • Texas LLC  $54/mo
  • Georgia LLC $37/mo

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#2 ZenBusiness  Editor’s Choice!  (LLC Formation & Business Website)

Highest rated with over 100,000+ formations over the last year!
https://zenbusiness.com

With ZenBusiness You Get,

  • Fast and simple LLC formation
  • Worry-free services and support
  • 100% accuracy guarantee

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#3 Incfile  Editor’s Choice!  (500,000+ Formations, Since 2004)

https://www.incfile.com

$149 + state fee
Business formation includes,

  • Preparing and filing articles of organization
  • FREE registered agent service 1st year
  • EIN business tax number
  • Operating agreement
  • Banking resolution

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#4 BetterLegal

One Simple Plan, Gets It Done $299


$299 + state fee
Texas Company
Business Formations & Registered Agent Services in 50 States
One Flat Price

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#5 Swyft Filings

Like The Name Says!

image description
$49 + state fee
Texas Company
Business Formations & Registered Agent Services in 50 States

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#6 Inc Authority

Like Incfile, Basic Plan Is Free But Limited!

Inc Authority logo
$0.00 + state fee
Nevada Company
Business Formations & Registered Agent Services in 50 States

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#7 Rocket Lawyer

Great For On-Going Legal Services!

Rocket Lawyer logo
$468/yr or $39/mo
San Francisco Company
Business Formations & Registered Agent Services in 50 States

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Best LLC Filing Services Reviewed

 

 

ZenBusiness front page 2021

#1 Northwest Registered Agent

#1 LLC service, metal design 3D

Best Customer Service

Northwest Registered Agent

Headquarters: Spokane, WA

One Of The Few LLC Websites With Offices In All 50 States!

 

https://northwestregisteredagent.com

Form An LLC Online With Northwest Registered Agent LLC Services

Visit Northwest Registered Agent button

Northwest Registered Agent website

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.

Northwest registered Agent logo

Northwest is our #2 best LLC service. One of the most familiar names in terms of registered agent and LLC formation services, Northwest Registered Agent, has become one of its type’s largest companies.

For over two decades, the company is well-known for its high-quality customer service, reasonable pricing options, and a lack of pushing sales.

Monthly Plans Available

Skip The State Fee

Northwest Registered Agent Prices for Texas

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.

Monthly Plan: Northwest pays your state fee upfront and spreads it out into monthly payments. The Texas formation fee is $300, but for just $54 a month, you get a business formation and registered agent services for one year.

Visit Northwest Registered Agent button

This is mostly because those who start up a business and need LLC formation will probably need a registered agent.

Registered Agent: $125 per year

Northwest Registered Agent Prices

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 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.

Each plan comes with personalized customer support 

Northwest Registered Agent offers one advantage if you use their registered agent services because 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.

If you need to form an LLC this year and/or need a good registered agent service, we think they are one of the best LLC services available for 2021.

Northwest provides unique and personalized customer support by ‘Corporate Guides’
Phone 509-768-2249
They have offices in 50 states

Create an LLC online with Northwest 

Visit Northwest Registered Agent button

ZenBusiness 

#2 LLC service, metal design 3d

Best LLC Service Guarantee

ZenBusiness Logo 2021

Headquarters: Austin, Texas
Our Favorite LLC Website For 2021
ZenBusiness Has Completed Over 100,000 LLC Filings & Formations In The Past 3 Years
File & Form an LLC Online With ZenBusiness!

visit Zenbusiness LLC service button

ZenBusiness is our favorite for the best LLC service in 2021. Created by Ross Buhrdorf, former HomeAway CTO, 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 exploited a gap left by LegalZoom, which other companies in the field are now taking advantage of.

ZenBusiness team photo

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.

ZenBusiness founders

Austin Texas

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 is 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.

ZenBusiness LLC Service Price Comparison

ZenBusiness Plans June 2021

ZenBusiness Has An ‘A La Carte’ Option

Service Pricing
Registered Agent Service $119 per year
Worry-Free Guarantee $129 per year
Employer ID Number (EIN) $70 one-time charge
Business Filing $49

 

Example of a Texas State Fee & Pro Plan

Texas $300 state fee + $199 Pro Plan = $499

LLC formation price with Texas state fee


Incorporating A Business In Delaware

Delaware State Fee $89

ZenBusiness LLC service price with Delaware state fee

visit Zenbusiness LLC service button

Pricing: ZenBusiness offers three different pricing packages for creating an LLC.

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: $199 per year, plus the state fee

  • All Starter services, plus
  • Formation in 5-8 business days
  • Worry-free guarantee
  • Employer ID Number or EIN
  • Expedited Filing

Premium Plan: $299 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

Each plan comes with extended customer support hours 7 days a week

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. They appear at the top of our list and other listings for the best LLC services.

We think ZenBusiness is the best LLC and incorporation creation service for 2021, and we aren’t the only ones who think they are one of the best LLC services online today; just check out their user reviews on Trustpilot.

If you need to form an LLC this year and/or need a good registered agent service, we think ZenBusiness is one of the best LLC services available for 2021. Visit our ZenBusiness review or our comparison LegalZoom vs. ZenBusiness.

ZenBusiness Website Builder

Business Website and Hosting

The ZenBusiness ‘Premium Plan’ Includes a Business Website, Domain Name, and Website Dashboard

A website can also be added to the Pro Plan or Starter Plan
Website $100/year
Domain Name $25/year

ZenBusiness offers all customers a personalized dashboard to set up and customize their domain name and website at any time from a computer or mobile device.

The ZenBusiness website builder comes with several templates to choose the style and design you want, hosting, a personal domain name, and business email.

Button to learn more about Zenbusiness LLC service website builder

Zenbusiness website builder

ZenBusiness website builder dashboard example

✅ Set up your domain name

✅ Select a website template

✅ Customize your content and designs

✅ Generate new leads and customers

✅ Take payment from your website

ZenBusiness Customer Reviews 2021

ZenBusiness reviews on Trustpilot April 2021

Visit Trustpilot 


ZenBusiness vs. LegalZoom Comparison (Top Plans)

LLC Filing, Formation, Employee Identification Number EIN (Tax ID), Operating Agreement, One-Year Registered Agent, State Compliance, Express Shipping

ZenBusiness $299 + state fee
VS
LegalZoom $1037
+ state fee
$349.  LLC Filing
$249.  One-Year Registered Agent
$159.  Operating Agreement, EIN
$69.    Compliance Calendar
= $1037 +
state fee


LegalZoom Verified Trustpilot Reviews March 2021

LegalZoom Trustpilot reviews March 2021


ZenBusiness LLC Formation and Incorporation Service
Customer Support: Phone or Chat, Monday – Friday, 8 am – 8 pm Central time or Sunday from 10 am – 7 pm Central time

Form A New Company With ZenBusiness LLC Services

ZenBusiness Logo 2021

Visit Zenbusiness LLC service button

 

#3 Incfile 

#3 LLC service. metal design 3d

Best LLC Service Value

Incfile

Headquarters: Houston, Texas
Incfile Is A Formation Website With Over 20 Years Experience 

Visit Incfile LLC service

Shopper Approved logo

Incfile Customer Reviews On Shopper Approved  

Incfile Shopper Approved reviews

Shopper Approved rating

 

First Year Registered Agent Services Free

Get One Year of Registered Agent Services Free!

Incfiles Formation Prices

Incfile’s Silver LLC Formation Package Is Free! + state fee
Free Registered Agent Service 1st Year!

Incfiles Silver LLC Formation Plan Features

Incfile’s Gold Package Includes An Employee Identification Number (EIN)

Incfile LLC Formation Gold Package Features

The Platinum Package

Incfile LLC Formation Platinum Package

The multiple price packages are excellent, and the selection of services is also good. If you need to form an LLC this year and/or need a good registered agent service, we think they are one of the best LLC services available for 2021. Visit our Incfile review for more details.

Each LLC plan comes with responsive customer support.

Incfile’s Customer Support: Phone support available Monday – Friday from 9 am to 6 pm CST

Create an LLC Online With Incfile LLC Services

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#4 BetterLegal 

#4 LLC service, metal design 3d

BetterLegal
Headquarters: Austin, Texas
One Simple Formation Price With This LLC Website From Texas

Visit BetterLegal gif

https://betterlegal.com

Fast & Inexpensive Formations

If you want straight talk, no upsells, and a quick business formation, BetterLegal is the one for you. There are no confusing packages here. BetterLegal has one formation package that gets the job done.

On their website, they claim to set up your business in 10 minutes, get your paperwork filed the same day, “so you’ll have your business within 2 business days,” “and receive your documents in 3 business days.”

BetterLegal is headquartered in Austin, Texas, and has been in business since 2016. Their Trustpilot reviews go back almost 3 years, and they have a combined rating of “Excellent.”

The BetterLegal Price & Plan

 

BetterLegal charges a flat fee of $299 (+ state fee) for LLC and Corporation formations. This price includes preparing and filing the Certificate of Formation, an Operating Agreement, and an Employer Identification Number (EIN). They can set you up with a registered agent for $10. per month or $90/year.

Each plan comes with solid customer support.

LLC Formations

BetterLegal LLC Formation features

Incorporations

BetterLegal Incorporation features

 

Visit BetterLegal


BetterLegal Trustpilot Reviews

BetterLegal Trustpilot reviews

BetterLegal’s Trustpilot reviews are great, and they have an A+ rating from the Better Business Bureau.

 

BetterLegal BBB rating

At the time of this writing, the BetterLegal website does not show any customer support hours or phone access, only email and physical address.

To contact BetterLegal, email them at email@betterlegal.com, or send a letter at: 1003 Rio Grande St, Austin, Texas 78701.

Form a New Business With BetterLegal LLC Services

Visit BetterLegal

 

#5 Swyft Filings 

#5 LLC service, metal design 3d

Form an LLC online with Swyft Filings LLC Services

Swyft Filings

Headquarters: Houston, Texas
Another Texas LLC Website Offering Tremendous Value

https://www.swyftfilings.com

Swyft Filings website

Form an LLC 

Visit Swyft Filings Button

Want to create an LLC online quickly? Swyft Filings is the one for you. While Swyft Filings is relatively new, formed in 2012, they have carved 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

Each formation plan comes with high-quality customer support.

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. If you need to form an LLC this year and/or need a good registered agent service, we think they are one of the best LLC services available for 2021.

Swyft Filings LLC Formation and Incorporation Service
Customer Support by Phone or Chat: Monday – Friday 9 am – 6 pm
Based: Houston, Texas

Create an LLC with Swyft Filings LLC Services

Visit Swyft Filings Button

 

#6 Inc Authority 

#6 LLC service, metal 3D

Inc Authority

Headquarters: Reno, NV
Affordable LLC Website

Inc Authority website

Inc Authority offers a basic LLC setup service for FREE; just pay the required state fees. It’s a friendly way to get you in the door and let you experience their service before adding additional features.

If you need to form an LLC this year and/or need a good registered agent service, we think Inc Authority is one of the best LLC services available for 2021.

Customer support is available 5 days a week by phone or email. 

Here’s what is included with the free plan.

Many people may choose to start with one of their three main packages.

Why Free Business Formation?

From their website, Inc Authority explains why they provide a FREE but limited business formation service.

WHY ARE WE GIVING AWAY FREE* CORPS AND LLCS?

AT INCAUTHORITY.COM, WE WANT TO EARN YOUR TRUST AND THEN YOUR BUSINESS FOR LIFE.

By giving away FREE* corporations and LLCs, it means you will have more money in your pocket to make your business succeed.

When you incorporate with IncAuthority.com, our staff is here to support you in creating your business and protecting your assets. Count on IncAuthority.com to help you grow your business and protect your family’s future.

The Startup Specialists with Inc Authority

Inc Authority leaders

Support Staff

Inc Authority LLC Formation and Incorporation Service
Customer Support: By Phone or Chat, Mon-Fri: 8 am-5 pm PST

Create an LLC Online with Inc Authority LLC Services

 

#7 Rocket Lawyer 

#7 LLC service, metal design 3d

Rocket Lawyer
Headquarters: San Francisco, CA
Rocket Lawyer Is An LLC Formation Website That Also Provides Legal Services

Form A New Business With Rocket Lawyer LLC Services

Visit Rocket Lawyer button

Rocket Lawyer website

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 and individuals, the company’s purpose 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 regarding the legal documents and assistance they provide, entrepreneurs and those just starting up small to medium-size businesses are the main targets.

Initially, the company charged for all its services individually but added a monthly subscription fee to cover most of what they offer, which helped grow their business exponentially. 

Rocket Lawyer website

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

Each plan comes with personalized customer support.

If you are not a premium member, you will have to pay for each service 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, it is a one-time fee. However, you might want to consider the premium service as it offers plenty of features for a comparable price 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. If you need to form an LLC this year and/or need a good registered agent service, we think Rocket Lawyer is one of the better LLC services available but not near the top of our list for 2021.

Rocket Lawyer LLC Formation and Incorporation Service
Customer Support: Phone Support Monday-Friday, 6 am-6 pm

Visit Rocket Lawyer button


What about LegalZoom? How come they aren’t at the top of this list?
LegalZoom happens to be a well-known and busy online legal services business. This is attributed to the company’s large-scale advertising campaigns and strong brand recognition. We like LegalZoom’s wide variety of online legal services.

With that said, we think their features and rates aren’t as impressive as other LLC filing services.

Business Structures Compared

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?

What is a Corporation? Corporation Pros and Cons

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 who 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 limited liability for 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 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.

What is an S Corp? S Corp Pros and Cons

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 they 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 form, own, manage, and control their business. A

s 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 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 combination of 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.

What is an LLC? LLC Pros and Cons

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 spending 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 losses on their personal income taxes.

Each state has its own regulations on business formations; for info on starting an LLC in Texas, visit our article on forming an LLC in Texas

 

LLC vs. Corporation

LLC vs Corporation Comparison

 

LLC vs Corporation part 2

Image Credit ZenBusiness

All LLC businesses are viewed in two different ways as legal entities and tax entities. Each of them is handled uniquely 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 the government sees it and how the tax bill is determined. Here are some details to better describe both legal entities and tax entities

Tax Entity

Setting up your business as an LLC, even if you are a single individual, has its distinct advantages, and how it is taxed is one of them. You can set up an LLC as a single person (sole proprietorship) or multiple-member (partnership) and then taxed accordingly.

The IRS offers an additional option, making 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. 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 yourself 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, you must weigh all of your options and consider them very carefully before deciding that involves taxes.

How To Form An LLC

A few different 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, 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.
  • Most of the 50 states require the company name to have included “LLC,” “L.L.C.,” 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 a person, however. It could be any resident of the state where you do business or a business entity 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 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 LLC’s name, address, and ownership.

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 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, such as filing annual franchise tax reports. Ensure to check the Comptroller of Public Accounts website for your state to stay updated on the latest requirements.

Other Considerations

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.

Business Licenses

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.

LLC Filing Services FAQ

What does LLC stand for?

LLC stands for limited liability company. An LLC is a business entity. There are various reasons why a business may choose the be an LLC, including reduced liability exposure. The rules regarding LLCs are different in each state, but most states require an LLC to include the words limited liability company, LLC, or L.L.C. at the end of the company name.

What does the LLC filing process entail?

Using an LLC service online takes away a lot of the hassles that come with the process of forming a business. With such services, you simply need to list your company’s name, where it’s located, and the industry it operates in. You’ll also have to provide some information about yourself, as well as your business’ registered agent.

Are online LLC filing services officially recognized?

They sure are. Several reputable organizations are providing LLC online formation services, most of which are on the list above.

Although we have opinions about who provides the best features and pricing, all LLC filing services we talk about here are completely trustworthy and legitimate.

Will my privacy protection be greater if I use an online LLC service?

In some regards, utilizing an LLC service protects your privacy, particularly if you opt to have the company act as a registered agent.

Here’s the reason – if you play double duty as a registered agent, then your personal mailing address will usually end up being a public record.

The use of a registered agent offers you privacy, as you can use the agent’s business address rather than your own. In doing so, you will also reduce the amount of junk mail you receive.

Do online LLC filing services come with any risks?

Actually, the opposite would be true – having an LLC formed by yourself comes with risks. When an LLC filing service is used, you can comfort knowing that the company will be correctly formed.

These specialists form countless LLCs every day and have the experience and knowledge to file a business entity compliantly.

Is the cost of LLC registration in my state included with LLC formation service rates?

It is not. There are various LLC formation costs in every state. Therefore, the fee charged by your state will need to be added to the price points listed. In several states, $40 is the cost. In other states, though, the fee might be hundreds of dollars.

Is the formation service provided by IncFile truly free?

Surprisingly, it is. At one time, the company charged just under $50 for a base package. They have since refined things so that the LLC formation process can be done for free. The only thing you’ll need to cover is the filing fee charged by the state.

Aside from that, the package comes with all the features you expect, such as registered agent service, next-day processing, and lifetime alerts. IncFile has two other company formation packages that come with quicker processing times and more features. These packages are priced at $149 and $299.

How can I get an LLC set up on my own?

There are a few steps to take if you wish to form an LLC by yourself. The most crucial aspect of this whole process is the preparation and filing of the Articles of Organization – a document that formalizes your LLC in the state you do business in.

The required information differs per state, but generally, you have to present them with fundamental details about you and the company. You’ll also have to name your company, have a registered agent designated, get an EIN (federal tax identification number), have an operating agreement created, and much more.

What is the cost of getting an attorney to launch my LLC?

Based on your LLC’s nature – in addition to any legal requirements requested by the state – there are many variables to consider. For the most part, it will probably cost a minimum of $1000 to have an LLC formed by an attorney. You might end up paying up to $3000, if not more.

Should a name be reserved before I use an online service to launch an LLC?

It is worth having the name of an LLC reserved in advance if you find yourself in a couple of situations. The first one would be if you aren’t prepared to have your LLC formed, yet you’d like to ensure that the name you choose isn’t taken when you’re ready to proceed. Alabama and other states will ask you to reserve a company name before the start of forming an LLC. Advance name reservations are necessary for most entrepreneurs and start-ups.

Is an Employee Identification Number (EIN) worth the extra money?

This question comes down to personal preference. The IRS allows you to obtain an EIN at no cost. You simply need to fill out a form to get one. Having said that, it may be more convenient for an LLC service to obtain one for you since they have the necessary information to get one already. Further, it’s convenient to keep your LLC documentation and your EIN confirmation together.

What do registered agents do?

Registered agents are needed to have an LLC formed. An agent can be a business entity or person responsible for acquiring essential government documentation.

For instance, if a lawsuit is filed against your company, a Service of Process will be issued by the state to whomever your registered agent is. The agent then informs you about what they received before forwarding it to you.

Although you have the right to take on the role of a registered agent, you are highly encouraged to use a professional service instead. This service can safeguard your privacy, keep you abreast of important deliveries, and minimize junk mail.

However, some LLC services, such as IncFile, Northwest Registered Agent, and ZenBusiness, do not charge you for this service during your first year with them. In your second year and every year after, you can expect to pay between $99 and $125 for this service, which can be canceled anytime.

Can an LLC be the perfect business entity?

One company’s needs aren’t the same as another’s. As such, we can’t make blanket statements like these.

For several small businesses and organizations, an LLC serves as a flawless business entity. However, for more complex or larger companies, a corporation may provide benefits that LLCs can’t.

In general, we are lenient towards LLCs, more so than general partnerships and sole proprietorships, since the latter two do not come with any protection of personal assets.

 

Pros and Cons of Online LLC Services

Pros

  • Whether you understand the legalities involved with launching an LLC or not, it won’t matter. Online LLC services help you save effort and time by handling such processes on your behalf.
  • Many LLC filing services give users a dashboard to update you on relevant government deadlines and remind you to file documentation on time.
  • If you would like to ask a question or have concerns, LLC websites display several email and phone support systems you can reach out to. On the other hand, if you do this process yourself, you’ll need to get in touch with the state you’re doing business with indirectly. Getting a reply will take a lot longer.
  • Each of these online incorporation services can help you save a lot of money (in contrast to having an attorney hired to get your LLC formed).

Cons

  • If you’re able to, some money can be saved by launching an LLC by yourself.
  • Alternatively, an attorney can bring specialized insights to the table, something you won’t receive from your average internet incorporation service.

At some point, your LLC will flourish, catapulting your success and lining up your pockets. It doesn’t matter if that happens three weeks from now or three years from now – you have the drive to execute your vision.

You’re going to need to spend some money along the way, and having an LLC formed will be one of those expenses.

Upfront expenses to launch an LLC are not steep but based on the region you reside in; they can certainly take a toll on your bank account. Each state of the country has procedures of its own when it comes to forming an LLC. They might set you back 50 bucks or hundreds of dollars.

Don’t let start-up costs creep up on you. Familiarize yourself with the required fees charged by your state.

Use this guide to navigate your way through formation costs in your state. Use it as a reference for ongoing compliance costs, yearly reports, and franchise taxes. That way, you’ll know what kind of costs to expect to start and maintain an LLC. In doing so, you will be able to move ahead progressively.

What kind of LLC filing service fees can I expect?

There’s nothing you can do about fees for LLC formation. Every state charges one, whether you’re doing things on your own or with help. While taking the DIY approach may be cheaper and will also exhaust your time.

If your schedule is hectic, but your budget is somewhat flexible, consider hiring an attorney or paying for an online formation service to deal with the LLC particulars on your behalf. Be mindful that these options will simplify things for you, but they come with extra costs, the most expensive of which will probably be hiring an attorney.

No matter what state you’re in, the main cost that comes with launching an LLC is the Articles of Organization filing fee. Several states refer to this documentation as the Certificate of Formation. Despite the name differences, the same result is accomplished by both of these forms.

Nebraska, New York, and Arizona will also ask you to publish evidence of the formation of an LLC in a regional publication. Your company will not become official until an ad is published in a pre-approved newspaper.

New York residents will have to cover the standard fees charged by a newspaper, in addition to $50. In Nebraska and Arizona, only the publication’s ad costs will need to be paid for.

In several states, only the start-up cost needs to be paid for. As such, once your formation documentation has been filed, you will be able to move ahead with whatever step comes next. Remain alert, though, since you’ll need to monitor specific maintenance fees, some of which will be ongoing.

What is the cost of maintaining an LLC?

Much like with your automobile, an LLC will operate seamlessly for a long time if it is maintained right. Several states charge maintenance or reporting fees to maintain the good standing of your business.

The most typical of these fees is the one charged to have a yearly report filed – a document that provides the state with updated information about your business. Some states also have a franchise tax imposed – a yearly fee raised against your business’s net worth.

Every 12 months, your LLC may modify its contact info or structure. These maintenance documents help the state remain informed. If your registered agent has changed, if you moved, if you’ve renamed your LLC, or any other significant alterations have happened, they need to be reported. Note: you must still file this document even if no changes have been made.

Be mindful that tax requirements and reporting differ per state. Therefore, it is prudent to review the following list to determine the budget for every year.

Should I use an online LLC filing service to create a new business entity?

If your budget has some flexibility, and you wish for things to get filed the first time correctly around, think about hiring an LLC filing service to have your business formed and maintained.

Companies like these specialize in LLC formation – to the point where the work involved is second nature for them. LLC creation services can streamline and simplify this process.

Some LLC filing services handle annual maintenance filings (such as yearly reports) and can serve as a registered agent. This takes the burden of Service of Process, due dates, and similar duties off your shoulders.

Now that some extra lines have been added to your budget for LLC formation, you are prepared to deal with the expenses that come with getting a business started. Fortunately, you won’t have to break the bank to have a business entity formed and maintained. There is only a handful of fees to concern yourself with.

The pressure associated with making payments like these is sufficient. You can bypass having it compounded with due dates and deadlines by delegating these responsibilities to an online LLC filing service. You can do these things by yourself, too!

Because formation necessities can differ substantially for each state, it is prudent to review our comprehensive guides, which are state-specific. In doing so, you will have the ability to handle the process of formation confidently.

Should I Form  An LLC For An Online Business? 

In most cases, this is up to the business owner to decide. Depending on the state you do business in, there may be business permits and licenses required for certain businesses. Usually, forming an LLC or incorporating a business is not a requirement for an online business.

Visit this Incfile post or this website for additional info on creating an LLC for an online business.

Can Non-Residents Own An LLC Or Corporation?

Yes, a non-resident can own an LLC or C Corporation in the U.S., but a non-resident cannot be a shareholder (owner) of an S Corporation. This is what Incfile has written on the subject; it’s from their website.

There are no citizenship or residence requirements for ownership of a C Corporation or an LLC. The S Corporation however does not allow nonresident aliens to be shareholders (owner), but any US citizen or resident alien may be a shareholder (owner). You would, of course, require an in-state street address for the state to forward official legal and tax correspondence including service of process, known as the registered agent address, but neither residency nor citizenship is required for ownership of a C Corporation or an LLC.


For info on additional formation services, visit our Stripe Atlas review.

Compare registered agent services by visiting this list of the top 7 best registered agent services in 2021.

Need more products and services for small businesses? Check out this list of the best places to order business checks online.


 

Additional LLC Formation Service Articles

What is an LLC?

What is an S Corp?

What is a Corporation?

What is an LLC Operating Agreement?

How To Name Your LLC?s

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