Our picks for LLC formation services
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The decision to start your own business can be an exciting time as you prepare to bring your dreams to life. But the process can also be overwhelming as you work through all the necessary steps, paperwork, and planning, including forming your LLC through the state.
While some people choose to do this on their own, many of the over 5 million LLCs formed yearly are helped by an LLC service. These services can make the process easier and take the burden off of entrepreneurs, but there are also many to choose from. Read on to learn how LLC services can help you and which ones are the best.
What are LLC services?
LLC services help a business start and grow.
Businesses that offer LLC services often called business formation companies, can help owners set up an LLC at the state level. In addition, companies can help a business file reports, pay state fees, serve as a company’s registered agent, and some even offer legal advice.
Top 5 best LLC formation services
1. Northwest Registered Agent
At Northwest Registered Agent, each customer is provided a Corporate Guide, a highly trained support agent who works with their account. This continuity makes it easy to follow up on your needs and go through the ordering process. Northwest only offers one plan, which includes formation, registered agent services, access to your corporate guide, and a business address. They do not offer operating agreements, marketing tools, or worry-free compliance.
2. ZenBusiness
With straightforward and affordable packages for LLC formation, ZenBusiness is known for its responsive customer support and simple structure. The basic package includes a free operating agreement and a CPA assessment, though EIN (employer identification number) registration and registered agents have an upcharge. If you do choose to use a ZenBusiness registered agent, their service is one of the highest-rated on the market.
3. Bizee
For users who want to manage their business in an online interface, Bizee is a top choice due to its user-friendly online dashboard that helps to track deadlines and compliance tasks. Their quality customer support is a benefit, and all packages include a year of registered agent service for free. Premium plans will include web domains and expedited filing.
4. Swyft Filings
Swyft Filings is a team of business formation professionals who focus not just on formation but on the continuing support of each business. All plans include lifetime customer support and free tax consultation to help ensure you are in compliance with the IRS. Swyft Filings offers a huge amount of premium services, even helping with business licenses and permits.
5. BizFilings
With a focus on incorporating businesses, BizFilings seeks to ensure customers are as informed as possible through their team of incorporation specialists. This team stays with you through your business’ lifetime and offers services like customizable operating agreements and ongoing registered agent services.
What is an LLC?
An LLC, or limited liability company, is a type of business entity in the United States. Though an LLC is formed at the state level, with varying processes and rules in each location, the concept exists across the country. In fact, 35% of small businesses in the country are LLCs. But why do so many business owners choose this structure?
Liability protection
The main benefit of an LLC is that it provides protection for the business owner when it comes to debts and liabilities associated with the business. Personal assets have more protection under an LLC.
An LLC is an intermediary between sole proprietorships (in which the owner and business are legally one and the same) and a corporation (in which the business is an entirely separate legal entity).
Hybrid business structure
An LLC is a hybrid entity. Owners benefit from liability protections which means if the business is sued, bankrupted, or finds itself with other obligations and liabilities, they cannot be pursued for repayment. At the same time, the taxation structure of an LLC is similar to that of a corporation, with owners not paying taxes directly. Profits and losses are passed on to members, who report them on individual tax returns.
Simple set up
LLCs are typically governed at the state level, but the process of creating one is similar in all locations. This typically involves steps like naming your business and ensuring the name isn’t taken, filing Articles of Organization, paying a fee, and obtaining tax identification.
Read more: How to start an LLC
What services qualify as LLC services?
A true LLC service will have end-to-end coverage for everything needed to create and operate an LLC. As you evaluate options, be sure that all of the below services are offered.
LLC formation package
Each state requires certain paperwork to be submitted to form an LLC. This can include business formation services like filing formation documents to register your name and/or a fictitious name, the application itself, and supporting documents like Articles of Organization. If you need guidance on the contents of these articles, they may also provide expert advice.
An LLC service will assume responsibility for ensuring these are filled out properly based on the information you provide and appropriately submitting them to the state. The state filing fee may or may not be included depending on your chosen provider.
Operating agreements
Along with the Articles of Organization, many people choose to create an operating agreement when they start their new business.
While an LLC is not generally required to file this agreement with the state, it can be a helpful way to ensure everyone is on the same page. An operating agreement will spell out things like how to resolve conflicts, including the potential dissolution of the company.
LLC services will typically offer operating agreement templates that you can use and plug in your information and wishes.
Along with templates, you may also be able to work with an expert to craft a solid operating agreement based on best practices.
Registered agent services
Every state requires that a registered agent is listed on the company formation papers. This registered agent is an individual or entity who will receive tax and legal documents on behalf of a company and ensure the right people receive them.
The company’s owner can serve as the registered agent, but some choose to use a commercial registered agent through an LLC service.
Why? A commercial registered agent can often simplify communications and offer peace of mind to owners who are often out of the office. A commercial registered agent is also available during regular business days and hours, which is required. For busy owners who have irregular schedules, a commercial agent is ideal.
Some service providers offer a free registered agent service to companies in their first year. It provides a hassle-free option for those looking to start a new company or an online business.
Read more: What is a registered agent?
Our picks for best registered agent services
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Business compliance
Once a new LLC has been formed, the paperwork and upkeep are not over. Most LLCs and nonprofits have to file annual reports each year with the secretary of state to keep their status and remain in good standing with the state.
These reports include things like meeting minutes and financial disclosures that demonstrate they are operating in compliance with the definition of an LLC and all related rules. An LLC service may be able to manage this paperwork and all related tasks so that your business remains in compliance without it being another task on your plate.
What are the benefits of using LLC services?
Experienced assistance
LLC services are staffed with people extremely knowledgeable about the process, including the formation and maintenance of the businesses.
Each state has unique restrictions that can be difficult to keep up with on your own, along with the need to maintain compliance standards and fee schedules. The experts at an LLC service can not only take over some of these tasks but provide expert guidance throughout the process.
Whether it is legal services or information about which state you should start a business in, relying on people with knowledge and experience can help you make the right decisions upfront.
Save time
The last thing most business owners need is another task to take care of. While you will be involved in the formation process for an LLC, service takes on some of the more tedious elements like filling out paperwork and submitting applications. Without worrying about the ins and outs of the process, you’re free to focus on the other steps necessary to start your business.
Variety of services to use as the business grows
Most people will come to an LLC service seeking help with the formation process, but having a trusted vendor who can perform other services is helpful later on. Working with an LLC service from the start makes it easy for them to manage your ongoing compliance and needs. If your business grows and you need other services or to expand into other states, the existing relationship with an LLC service will simplify your next steps.
Marketing tools
Some LLC services offer tools for small business owners that go beyond formation. As a part of securing your company name, they may be able to ensure your domain name is available and reserve it, or even work on building out your website and advertisements.
Direction on funding
Funding a business can be one of the most overwhelming parts of starting a business. While LLC service providers do not fund businesses themselves, many will offer information on funding sources and approaches to take. They may also provide guidance on things like taxation and profit and help you set up a business bank account.
How to pick a company that’s right for you?
Experience
While being around a long time doesn’t automatically make a company the best, look for an LLC service with some history in the business. This experience will be one of the main assets you get from working with the service, so you want to be sure that the people you work with are knowledgeable. You should be able to find customer reviews from recent years to demonstrate that they have been effective and have real-world examples to highlight.
Consider visiting Trustpilot, an online review site that should hopefully have positive reviews and customer feedback for the online LLC formation service that you have in mind.
Services offered
Help with forming your LLC will be the most vital service you look for, but the more breadth here, the better. You may not know what your business will look like in the future and what services you may need. It will be easier to keep everything with one vendor rather than spending time searching for additional ones to do things like website building and marketing.
Cost
Prices for LLC services can vary widely depending on what services you need and your plans. Most will offer a basic plan with affordable pricing that includes LLC filing services with add-ons available for separate fees. Premium plans are more likely to include things like an LLC operating agreement and EIN registration (also known as a federal tax ID number). You’ll want to choose something that fits your budget while still bringing value.
Customer support
In addition to ensuring a company has knowledgeable staff with real-world experience, how you access that support will be important. Your experience with turnaround time, ease of contact, service hours, and general demeanor can impact your experience of an LLC service.
FAQs
How much does it cost to start an LLC?
The amount of money it takes to start a business will depend on your location, business, and needs. According to the U.S. Small Business Administration, most small businesses cost between $2,000 and $5,000 in order to get off the ground. This can include things like the cost to form an LLC, as well as purchasing materials and marketing costs.
How much do states charge to officially form an LLC?
Each state determines the filing fee for an LLC and annual fees, so it can vary widely by state. Formation fees can be as low as $40 and as high as $300, and some states have no ongoing fees but they can reach $4,500 annually depending on your business. Business owners will also need to pay for any outside consultation or services they utilize.
What’s the best state to start an LLC in?
You can form a business in any state, even if it is not where you reside. Delaware is the most popular state for LLCs because it is business-friendly, has low taxation, and has fast filing for a fee of only $90. Wyoming also offers low price fees and great business tax benefits, as well as the nation’s strongest asset protection.
Is there a monthly fee for an LLC?
There is no monthly fee for an LLC, but most states have annual costs associated with maintaining the status of a business. Annual reporting fees are the biggest cost and can range from $20 a year to over $10,000. Annual franchise tax can also be applied to LLCs and can be as low as $250 per year.
Are LLC services ideal for startups?
Yes, LLC services are often the best choice for startups and people new to owning a business. Instead of spending the time to learn everything about formation and state compliance, an LLC service allows business owners to spend their time focused on their business while ensuring all the necessary processes are in place.
What other providers offer incorporation services?
Beyond the list above, incorporation services are available through Inc Authority, My Corporation, MyCompanyWorks, Rocket Lawyer, MyCorporation, and Legalzoom.
Yes, anyone can form an LLC without a service or a lawyer to help them. However, it is best to engage someone who has knowledge of the subject and can ensure everything is done in compliance with state law. Using an LLC service allows you to ensure that your business is formed properly from the start.
Do I need a registered agent to start an LLC?
Yes, all states require that a registered agent is listed in the Articles of Organization when forming an LLC. You can be the registered agent for your own business or can list another individual. Commercial registered agents can be used to ensure nothing is missed and everything is handled in a timely manner.
Do I have to have an operating agreement to start an LLC?
No, operating agreements are not required to be recognized as an LLC. However, it is best practice to have one in place before starting to do business to ensure disputes are handled properly. Most LLC services will provide a template of operating agreements or help you to craft one based on their knowledge.
What are Articles of Organization?
The paperwork needed to create an LLC is called a certificate of formation or more commonly, Articles of Organization. These articles include information on the business owners, the principal place of doing business and purpose of the business, the business name of the company and any DBA designations, and the intended business structure. Other details may be necessary depending on state laws.