One of the first and most crucial steps when starting a business is forming your company as a Limited Liability Company (LLC). While it’s possible to file your LLC independently, many business owners opt for professional help. This blog will explore why you choose to use a third-party service for your LLC formation, what to look for in these services, and a detailed comparison of some of the top providers in the market.
Why Consider Business Formation Help?
Ease and Convenience: Filing an LLC involves navigating paperwork and understanding state-specific legal requirements, which can be complex and time-consuming. A professional service can handle these logistics for you, letting you focus on other aspects of launching your business.
Expertise: LLC formation services are knowledgeable about the legal intricacies of business formation. They can ensure that everything is filed correctly, helping to avoid costly mistakes.
Additional Services: Many LLC formation companies offer additional services, such as obtaining an EIN (Employer Identification Number), drafting an operating agreement, or providing registered agent services, which are essential for maintaining good standing with state laws.
Benefits of Using Professional Third-Party Platforms
- Error Reduction: Professionals are less likely to make the mistakes that someone might make when forming an LLC for the first time.
- Speed: A formation service can speed up the process, as these companies often have streamlined systems.
- Ongoing Support: Many services offer support after the LLC is formed, which can be invaluable for new business owners.
What to Look For in an LLC Formation Service
When choosing a service to help with your LLC formation, consider the following factors:
- Reputation: Look for services with vital customer feedback and high ratings on review platforms.
- Cost: Compare what each service offers for their pricing. Cheaper is only sometimes better if it means sacrificing essential features.
- Ease of Use: The service should have a user-friendly website and a straightforward filing process.
- Support: Excellent customer support via phone, email, or live chat can be crucial, especially for new business owners.
- Additional Services: Depending on your needs, you might want services like annual report filing, compliance checks, or registered agent services.
Detailed Comparison of LLC Formation Services
Here’s an overview of some popular LLC formation platforms: ZenBusiness, BizFilings, Northwest Registered Agent, Doala, and Swift Filings.
ZenBusiness
Key Features:
- Affordable plans that include LLC formation, operating agreement, and EIN registration.
- Worry-free compliance service that keeps your LLC in good standing.
Pros:
- Low-cost options with great features.
- Positive customer reviews.
- Worry-free compliance.
- Fast processing time.
Cons:
- Younger company with a shorter track record.
- Limited range of legal services
Starting at $0 + state fees
Key Features
Business Formation Services: ZenBusiness offers LLC and corporation formation starting at $0 plus state fees, providing a streamlined process to officially establish your business.
Worry-Free Compliance: The platform provides compliance alerts, annual report filing, and amendment services to help maintain your business’s good standing with state requirements.
Integrated Business Tools: ZenBusiness includes features like business banking, expense tracking, invoicing, and tax filing assistance, all accessible through a user-friendly dashboard.
Why We Recommend It
ZenBusiness simplifies the process of starting and managing a business by offering comprehensive services in one place. Its affordable pricing, combined with tools for compliance and financial management, makes it a practical choice for entrepreneurs seeking efficiency and support.
Pros & Cons
- Affordable Entry Point: Offers a free Starter plan (excluding state fees), making it accessible for new business owners.
- Comprehensive Services: Provides a range of tools beyond formation, including compliance assistance and financial management.
- User-Friendly Platform: Features an intuitive dashboard for easy navigation and management of business services.
- Auto-Renewal Fees: Some services, like the Worry-Free Compliance, auto-renew at higher rates after the first year.
- Potential Upselling: Users may encounter additional offers and services that can increase overall costs.
- Limited Free Features: The free plan has basic features; advanced tools require upgrading to paid plans.
Bizee
Key Features:
- Offers basic LLC formations and more comprehensive packages with ongoing compliance.
- Six months of free registered agent service with formation.
Pros:
- Decades of experience in the industry since 2004.
- Educational resources to help new business owners.
- Positive customer services
Cons:
- Mixed reviews on service speed.
- A lot of up-selling and add-ons.
- Higher cost compared to some newer services.
Starting from $0 + State Fee
Key Features
Streamlined LLC formation and compliance services
Business license registration and management
Registered agent services for ongoing compliance
Why We Recommend It
- Provides a free LLC formation service (state fees still apply)
- Free registered agent service for the first year
- Ensure that all your contracts, documents, and forms are solid without the expense of hiring a lawyer
- Fast filing process that can be completed in as little as a few minutes
Pros & Cons
- Quick and easy LLC formation process
- Comprehensive compliance tools
- Affordable pricing for small businesses
- Limited additional services compared to larger competitors
- Some services may require additional fees
Northwest Registered Agent
Key Features:
- Privacy by Default®: They use their address on your filings to keep your address private.
- Local Corporate Guides® provide customer support.
- Decades of experience in the industry.
- Have offices in all 50 states.
Pros:
- Strong focus on data security and privacy.
- Excellent customer service.
- Quick LLC Setup
Cons:
- Premium pricing.
- Special $39 pricing to form your company
- Well-established and trusted service
- Includes free registered agent service for 1 year ($125 value)
- Privacy is guaranteed so your info stays off public records
- Fast filing and processing times
BEST OVERALL FOR BUSINESS FORMATION
Doola
Key Features:
- New player with competitive pricing.
- Simple service offerings.
Pros:
- International audience.
- Easy and quick filling times.
- Offers DAO LLC
- Affordable price
Cons:
- No customizability
- Offers only 3 entity types (LLC, C-Corp, Dao LLC)
Starting from $167/month
Key Features
Simplified LLC formation process
Access to ongoing business compliance and support
Employer Identification Number (EIN) registration
Why We Recommend It
Makes LLC formation quick and easy for entrepreneurs
Provides continuous compliance support to ensure your business stays in good standing
Helps businesses with EIN registration, which is essential for tax purposes
Pros & Cons
- Fast and easy LLC formation
- Provides ongoing support for business compliance
- Affordable pricing with clear steps
- Limited to LLC formation and compliance services
- Some additional services may require extra fees
Swyft Filings
Key Features:
- Basic LLC formation with options for EIN and operating agreement.
- Personalized customer support.
Pros:
- Customizable packages
- Affordable price
- Easy process
- Fast turnaround
- Helpful customer service
Cons:
- Limited entity options (LLC, S-Corp, C-Corp, Non-profit)
- Starting at $0 plus state fees
- Includes branding and tax assistance
- Access to a 24/7 priority support team
- Fast and efficient LLC filing services
- Expert guidance throughout your business journey
Best for Individuals and Small Business Owners
LegalZoom
Key Features:
- LegalZoom offers a wide range of legal services beyond just LLC formation, including intellectual property, compliance, and estate planning.
- Known for its reliability and established presence in the legal services market.
- It provides options for legal advice through consultations with licensed attorneys.
Pros:
- Well-known, and its long track record can give clients confidence in its services.
- It offers one-stop shopping for a business’s many legal needs, from LLC formation to trademark registration.
Cons:
- High pricing, especially when factoring in upsells and ongoing services.
- Complexity in Pricing with many upsells that can add up quickly.
Starting from $0 + filing fee
Key Features
Affordable Formation Services: LegalZoom offers LLC formation starting at $0 plus state filing fees, providing an accessible option for entrepreneurs to establish their businesses
Comprehensive Support: The platform provides step-by-step guidance throughout the LLC formation process, including assistance with filing articles of organization and obtaining an EIN
Additional Business Services: Beyond formation, LegalZoom offers services such as registered agent representation, operating agreement templates, and compliance tools to help maintain your LLC’s good standing
Why We Recommend It
LegalZoom simplifies the process of forming an LLC, making it accessible even for first-time business owners. With affordable pricing and a range of supportive services, it’s a practical choice for entrepreneurs seeking to establish their businesses efficiently.
Pros & Cons
- User-Friendly Platform: LegalZoom's intuitive interface guides users through each step of the LLC formation process
- Comprehensive Free Plan: Offers a robust free plan with access to most features, suitable for small businesses.
- Accessible Pricing: Starting at $0 plus state fees, LegalZoom provides an affordable entry point for new business owners
- Additional Costs for Extras: While the base formation service is affordable, add-ons like registered agent services and expedited filing come at an extra cost
- Potential for Upselling: Users may encounter upselling of additional services during the sign-up process
- Limited Personalized Legal Advice: LegalZoom provides general legal information but does not offer personalized legal advice unless you opt for additional attorney services
Package Comparison
Here’s a table comparing the essential features and costs of each service:
Which One is Best for Your LLC?
Choosing the exemplary LLC formation service depends on your specific needs, your budget, and the level of legal assistance you anticipate needing:
- For Cost-Effective Formation: ZenBusiness and Swift Filings offer competitive pricing with solid features for those on a budget.
- For Comprehensive Legal Services: LegalZoom might be the right choice if you foresee needing various legal services and direct access to legal advice.
- For Privacy and Support: Northwest Registered Agent is top-tier if you prioritize personal data privacy and exceptional customer support.
- For New Businesses Focusing on Simplicity and Cost: Doola offers a straightforward, particularly appealing service for first-time entrepreneurs who need essential formation services at an affordable price.
Hidden Costs of LLC Formation Services?
Some hidden costs to be aware of include:
- Renewal fees for registered agent services: Some services offer a free first year but charge a higher renewal fee.
- Compliance fees: Fees for additional compliance support or document filing beyond the basic formation.
- Cancellation fees: A fee might be involved if you cancel the service.
- Always read the fine print and ask the provider about all possible charges before signing up.
Things to Consider
Before deciding on a service, consider the total cost of formation and the first year, including any recurring fees for services like registered agents.
- Budget: How much are you willing to spend on the initial formation and ongoing fees?
- Service Needs: Do you need simple formation services, or do you anticipate requiring more comprehensive legal advice?
- Customer Service: Consider how vital access to responsive and helpful customer support is to your business operations.
In conclusion, starting an LLC can be a smooth process with the right formation service. Consider your business needs, budget, and the additional features each service offers to make the best choice for your new venture.
