Forming an LLC is one of the first steps most new business owners take, and it has become a surprisingly competitive industry. Companies like ZenBusiness, Northwest Registered Agent, LegalZoom, Incfile (now part of ZenBusiness), and Bizee all promise to handle the paperwork for you, but the differences in what you actually get, what you pay, and what ongoing obligations you are committing to vary enormously.
This guide compares the major LLC formation services, explains what you are actually paying for at each price tier, covers state-specific considerations that affect your costs, and helps you decide whether you even need a service in the first place.
What LLC Formation Actually Involves
Before evaluating services, you need to understand what the formation process requires. Forming an LLC involves a handful of discrete steps, and most of them are straightforward.
The Core Steps
First, you choose a business name and verify it is available in your state. Every state has a business entity search tool on the Secretary of State website where you can check availability for free.
Second, you designate a registered agent. This is a person or company authorized to receive legal documents on your LLC's behalf. Every state requires one, and the agent must have a physical address in the state of formation.
Third, you file Articles of Organization (called a Certificate of Formation in some states) with your state's Secretary of State. This is a short document, typically one to two pages, that lists your LLC's name, registered agent, principal address, and sometimes the names of members or managers.
Fourth, you create an Operating Agreement. This is an internal document that defines how the LLC is managed, how profits and losses are allocated, and what happens if a member wants to leave or the LLC is dissolved. Not every state requires one, but every LLC should have one regardless of state requirements.
Fifth, you obtain an Employer Identification Number (EIN) from the IRS. This is free and takes five minutes on the IRS website.
What This Costs If You Do It Yourself
The only mandatory cost is the state filing fee for the Articles of Organization. These fees vary dramatically by state. Wyoming charges $100. New York charges $200 plus requires publication in two newspapers, which can add $300 to $1,500 depending on the county. California charges $70 to file but imposes an $800 annual franchise tax starting in the first year. Massachusetts charges $500. Each state also charges annual or biennial report fees ranging from $0 (some states have no annual report) to $300.
The total DIY cost ranges from under $100 in some states to over $2,000 in New York when you factor in publication requirements.
Major LLC Formation Services Compared
The formation service market has consolidated significantly, but several major players remain. Here is what each offers and what it actually costs.
ZenBusiness
ZenBusiness has become one of the dominant players by offering a genuinely low entry price. Their Starter plan begins at $0 plus state fees and includes formation filing, a name availability search, and standard processing.
The Pro plan at $199 per year adds an operating agreement template, an EIN filing, faster processing, and compliance reminders. The Premium plan at $349 per year adds a business website, domain name, and business email.
The model relies on upselling. The free tier gets you in the door, and then ZenBusiness offers add-ons for registered agent service ($199 per year), worry-free compliance ($199 per year), and various other services. The registered agent service in particular is a significant ongoing cost that many customers do not anticipate when they sign up for the free plan.
ZenBusiness gets strong reviews for customer service and speed. They process most filings within two to three business days with the Pro plan. Their platform is clean and easy to use, and they are transparent about what is and is not included at each tier.
Northwest Registered Agent
Northwest takes a different approach. Their formation service costs $39 plus state fees and includes a full year of registered agent service. This is significant because registered agent service from other providers costs $100 to $300 per year, so Northwest's bundled approach often makes it the best overall value.
Northwest is one of the few formation services that operates its own registered agent offices in all 50 states rather than using third-party contractors or virtual offices. This matters because a registered agent who misses a legal notice can cause you to default in a lawsuit. Northwest has been in the registered agent business since 1998 and has a strong track record.
After the first year, registered agent service renews at $125 per year, which is still competitive. Northwest does not push as many upsells as other services, and their pricing is more straightforward.
LegalZoom
LegalZoom is the best-known name in online legal services, but it is no longer the best value for basic LLC formation. Their basic formation package starts at $0 plus state fees, but the included features are minimal. Most customers end up spending $249 to $399 when they add the services they actually need.
LegalZoom's advantage is brand recognition and the breadth of their legal services platform. If you anticipate needing ongoing legal services such as trademark filing, contract review, or legal consultations, LegalZoom's subscription plans can provide value. Their Business Advisory Plan at $31 per month includes unlimited 30-minute consultations with attorneys, which is genuinely useful for businesses that need regular legal guidance.
However, for straightforward LLC formation, LegalZoom is overpriced relative to competitors. Processing times are slower (three to four weeks for standard processing), and their platform pushes more upsells than most alternatives.
Bizee (formerly Incfile)
Bizee offers free LLC formation plus state fees with their Silver plan, which includes preparation and filing of articles of organization, a name availability search, and a year of registered agent service. The Gold plan at $199 adds an EIN, operating agreement, banking resolution, and IRS Form 2553 if you want S-corp election.
Bizee is a solid budget option. The free tier is genuinely free (not a trial or teaser), and the included year of registered agent service adds real value. Customer service is adequate but not as consistently praised as ZenBusiness or Northwest.
Rocket Lawyer
Rocket Lawyer uses a membership model. LLC formation is free for members, and membership costs $39.99 per month. The membership includes access to legal document templates, attorney consultations, and a 25 percent discount on attorney services.
This model makes sense if you need ongoing access to legal documents and attorney consultations. For one-time LLC formation, the monthly fee makes it expensive. If you sign up, form your LLC, and cancel within the first month, you pay $39.99 total. But most people forget to cancel, and six months of membership costs $240 for a service you may not be actively using.
State-Specific Considerations
Your state of formation affects your costs, your ongoing obligations, and potentially which formation service is best for you.
Best States for LLC Formation
Despite what the internet marketing machine would have you believe, the best state to form your LLC is almost always the state where you actually do business. Forming in Wyoming or Delaware for the privacy benefits or favorable laws sounds appealing, but if you operate in California, you still have to register as a foreign LLC in California, pay California's $800 franchise tax, and maintain a registered agent in both states. You gain nothing and pay double.
Delaware and Wyoming formation makes sense for specific situations: venture-backed startups that expect Delaware Chancery Court to be relevant, holding companies with no physical operations, and multi-state businesses where a neutral jurisdiction simplifies governance. For a local service business, a freelancer, or a small e-commerce company, form in your home state.
High-Cost States to Watch
Some states impose costs that go beyond the filing fee and significantly affect the economics of LLC ownership.
California requires an $800 minimum franchise tax every year, regardless of whether your LLC earns any revenue. This starts in the first year of existence. For new businesses with no revenue, this is a significant burden.
New York requires new LLCs to publish formation notices in two newspapers (one daily, one weekly) in the county of formation for six consecutive weeks. In New York County (Manhattan), publication costs can exceed $1,500. In less expensive counties, it may be $300 to $500. Some formation services offer publication packages, but they are expensive. One strategy is to form your LLC in a county with lower publication costs and then change your address later.
Massachusetts charges $500 for LLC formation, one of the highest filing fees in the country. Illinois charges $150 for formation plus a $75 annual report fee. Texas requires a franchise tax report annually, although most small LLCs fall below the no-tax-due threshold.
Annual Compliance Requirements
Every state has different annual or biennial compliance requirements. Most states require an annual report or statement of information, filed with the Secretary of State, that confirms your LLC's current information. Fees range from $0 in states with no report requirement to $300 or more.
Missing an annual report can result in administrative dissolution of your LLC, meaning the state revokes your business entity. Reinstatement typically involves penalties, back fees, and paperwork. This is one area where a formation service's compliance reminders add genuine value, because missing a deadline can cost you far more than the reminder service.
Hidden Costs and Upsells to Watch For
The formation services industry runs on upsells, and some of them are worthwhile while others are a waste of money.
Worth Paying For
Registered agent service is a legitimate ongoing need. If you do not want to use your home address as your registered agent address, paying $100 to $200 per year for a professional registered agent is reasonable. Northwest Registered Agent and ZenBusiness both offer competitive pricing.
An operating agreement template is useful if you do not have a lawyer draft one. While free templates exist online, the ones provided by formation services are generally more thorough and state-specific.
Compliance reminders are worth a modest fee if you are not naturally organized about administrative deadlines. However, you can also set calendar reminders yourself for free.
Probably Not Worth Paying For
EIN filing is free on the IRS website and takes five minutes. Paying $50 to $100 for a service to do this is unnecessary unless your time is genuinely worth more than $600 per hour.
Business licenses and permits packages sold by formation services are typically just lists of potential requirements, not actual applications. You still have to apply yourself, and a 30-minute search of your city and county websites will give you the same information.
Certificates of good standing are available directly from your Secretary of State for $5 to $20. Formation services charge $50 to $100 for this.
Business bank account opening assistance is unnecessary. Walk into any bank with your Articles of Organization and EIN, and they will open a business account. You do not need a service for this.
S-Corp election filing is an IRS Form 2553, which is a one-page form you can fill out yourself. However, the decision to elect S-Corp taxation is complex and has significant implications. Before making this election, consult with a CPA, not a formation service.
DIY Versus Using a Service: The Decision Framework
Here is a straightforward framework for deciding whether to use a formation service.
Do it yourself if your state has a simple, user-friendly online filing system (most states do), you are comfortable with basic business paperwork, you want to serve as your own registered agent using your home or business address, and your LLC is straightforward with one or two members and no unusual structural requirements.
Use a formation service if you want a professional registered agent so your home address is not on public records, you value convenience and are willing to pay a modest premium for someone else to handle the paperwork, you want compliance reminders and annual report filing handled automatically, or you are forming in a state with complex requirements like New York's publication rule.
Hire a business attorney if your LLC has multiple members with different contribution levels or profit-sharing arrangements, you need a customized operating agreement rather than a template, your business involves regulatory licensing or specialized legal requirements, or you are raising investment capital and need proper documentation.
For a single-member LLC in a straightforward state, DIY formation costs $50 to $200 in state fees and takes 30 to 60 minutes of your time. A formation service adds $0 to $350 plus ongoing registered agent fees. An attorney adds $500 to $2,000 but provides customized advice and documents.
The Bottom Line
For most small businesses, Northwest Registered Agent offers the best overall value because it includes a year of registered agent service with formation, has transparent pricing, and does not aggressively push upsells. ZenBusiness is a close second with a more polished platform and stronger customer service, but watch for the add-on costs that accumulate.
LegalZoom is the right choice only if you need their broader legal services platform. Bizee is a solid budget option. Rocket Lawyer makes sense only if you need ongoing legal document access.
Regardless of which service you choose, the most important thing is to understand your state's ongoing compliance requirements and budget for them. The formation itself is a one-time event. The annual franchise taxes, report fees, and registered agent costs are what add up over the life of your business.