2023's Top LLC Formation Services: A Comprehensive Comparison
When starting an LLC, it's crucial to know what to expect. Our Guides Legal Services team has conducted research and compiled information on the top LLC formation services. We have analyzed their pros and cons, best uses, and rankings of common features. Keep this guide handy during your business planning process to assist you in selecting the most suitable formation service for your new business.
The Top LLC Services for the year 2023.
These are the top choices for the best and most reliable LLC services in 2023.
- Best Overall:ZenBusiness
- Access to an Attorney:LegalZoom
- Free First Year:Incfile
- Business Specialist Offered:Swyft Filings
- Free DIY Option:Northwest
- Tailor Brands is highly recommended for brand services.
How do the LLC formation companies differ from each other?
LLC formation companies offer various services and features to assist individuals in forming their limited liability companies. While these companies generally provide similar fundamental services, they do differ in certain aspects, such as pricing, customer service, additional features, and packages offered. Here's a breakdown based on the mentioned companies:
- ZenBusiness (Best Overall): Known for its affordability, user-friendly platform, and excellent customer reviews. They offer various packages catering to different needs, including registered agent services and compliance assistance.
- LegalZoom (Access to an Attorney): LegalZoom provides access to legal professionals, which can be beneficial for those seeking legal advice and guidance throughout the LLC formation process. They offer a wide range of legal services beyond just LLC formation.
- Incfile (Free First Year): Offers a free basic package for the first year, making it an attractive option for those looking to minimize initial costs. They also provide additional services and features at competitive prices.
- Swyft Filings (Business Specialist Offered): Specializes in providing a business specialist to assist clients through the LLC formation process. They offer various packages with additional services like EIN acquisition and operating agreements.
- Northwest (Free DIY Option): Offers a free DIY option for those who want to handle the LLC formation process themselves. They also provide registered agent services and focus on personalized customer support.
- Tailor Brands (Brand Services): Known for branding services such as logo creation, website design, and brand identity development. While not primarily focused on LLC formation, they offer services to help businesses establish a strong brand presence.
The differences between these companies can include pricing structures, additional services offered, customer support quality, ease of use of their platforms, speed of processing, and the level of assistance provided throughout the LLC formation process. Depending on individual preferences, priorities, and specific needs, one company might be more suitable than another. It's essential to consider factors such as cost, services included, customer reviews, and any unique requirements your business might have before choosing an LLC formation company.
What is the cost of online LLC services?
Limited Liability Companies (LLCs) have gained immense popularity among entrepreneurs due to the protection they offer and their flexibility in business operations. To assist in forming an LLC, numerous service providers offer a range of packages and prices. Here’s a comprehensive comparison of some leading LLC service providers, highlighting their basic package prices, premium package prices, and costs associated with obtaining an Employer Identification Number (EIN).
- Basic Package Price: $0 (for first-time users) for the first year
- Premium Package Price: $349 per year
- EIN Price: Included
- Basic Package Price: $0 (+ state filing fees)
- Premium Package Price: $299 (+ state filing fees)
- EIN Price: Included with Pro Package
- Basic Package Price: $0 (+ state fees)
- Premium Package Price: $299 per year (+ state fees)
- EIN Price: Included with Gold Package
- Basic Package Price: Starts at $0 (+ state fees)
- Premium Package Price: $299 per year (+ state fees)
- EIN Price: $79
- Basic Package Price: Starts at $0 (+ state filing fees)
- Premium Package Price: $39 per year (+ state filing fees)
- EIN Price: $50
- Basic Package Price: Starts at $0 (+ state fees)
- Premium Package Price: $249 (+ state filing fees)
- EIN Price: $99
Each LLC service provider comes with its unique set of features and pricing structures. While some offer free or heavily discounted basic packages, others focus on providing comprehensive services in their premium packages.
When deciding on an LLC service provider, it's crucial to consider various factors:
- Cost: Assess the initial costs as well as any hidden fees or additional charges for services beyond the basic package.
- Additional Services: Look into the additional features included in premium packages, such as registered agent services, operating agreements, or compliance monitoring.
- Customer Support: Consider the quality of customer service and the level of assistance provided throughout the LLC formation process.
- Reviews and Reputation: Check customer reviews and the overall reputation of the service provider to ensure reliability and customer satisfaction.
Ultimately, the choice of an LLC service provider depends on individual preferences, budget constraints, and specific business needs. Whether it's affordability, comprehensive services, or additional features, each provider caters to a different set of requirements, aiming to assist entrepreneurs in establishing their LLCs seamlessly.
Is it recommended to use an online LLC service?
Forming an LLC is complex. The DIY approach may seem appealing, but it has challenges. Online LLC services offer expertise and experience. They streamline the formation process, file necessary documents correctly and on time, and provide additional resources.
- Operating agreement templates
- EIN application assistance
- Compliance alerts
- And more
Attempting a DIY LLC formation can be time-consuming and prone to errors. Although there may be initial cost savings in avoiding service fees, the potential for mistakes and the time investment required can make the DIY route more expensive in the long run. Utilizing an online LLC service offers reassurance, ensuring a professional handling of the formation process from beginning to end.
What features are provided by LLC services?
The LLC formation process is similar in all states, but there are some differences. Most LLC formation companies offer similar services, some included in different package tiers and others as add-on services. We have created a chart to show you which features are offered by our top five service providers and whether they are included in the basic package price. Read on to learn more about each feature.
Business Name Search
When starting a new LLC, it is important to select a distinct name that does not cause confusion with other businesses or government agencies. Additionally, you must include a designation in your name that indicates your business type, such as "limited liability company," "LLC," "LC," or another variation permitted by your state. Several formation companies provide name availability searches as part of their business formation process.
Preparation and filing of formation documents.
The crucial step in establishing your new company involves the completion and submission of the necessary formation documents. These documents, commonly referred to as "articles of organization," "articles of incorporation," or the "certificate of formation," are typically filled out with the assistance of a formation company and are then filed with the appropriate state agency, often the secretary of state.
Among the LLC services reviewed, ZenBusiness is highly regarded for their comprehensive document preparation and filing services. They ensure accurate completion of all necessary "articles of organization" and prompt filing with the appropriate state agency. Their attention to detail and efficiency make them a top choice for entrepreneurs in need of thorough assistance during the critical step of company formation.
Registered Agent Service
Every LLC must appoint a registered agent, who serves as a physical point of contact in the state for receiving legal and tax documents during business hours. It may be convenient to use the same company for formation and as a registered agent to reduce the number of websites you need to visit and remember login information for.
IncFile and Northwest Registered Agent are both registered agent services that offer cost-effective options for new businesses. IncFile offers a year of free registered agent service, while Northwest Registered Agent includes the service in their base price, providing value and convenience for entrepreneurs.
Operating Agreement Template
An operating agreement is a tool that creates and establishes practices and policies for your business. It binds LLC owners, known as members, to the rules set out in the agreement. It is recommended to have an operating agreement, whether you run a non-profit. Online LLC formation services often provide operating agreement templates for an additional fee. They can help you customize your agreement.
ZenBusiness and LegalZoom are LLC services that offer operating agreement templates for businesses to establish rules and guidelines for their practices and policies. ZenBusiness includes this service in their packages, providing convenience for members.
An employer identification number, or EIN, is necessary for most businesses. It can be obtained for free from the IRS and serves as a tax identification number. It allows businesses to handle employment taxes and can also be used to verify a business's identity for various activities, such as opening a business bank account. Having an EIN is required if a business has employees or multiple LLC members, but it is also beneficial for single-member LLCs to keep personal information separate from business information.
Both ZenBusiness and LegalZoom provide assistance with the EIN application process. ZenBusiness includes the EIN application in certain premium packages, while LegalZoom offers it as an additional service for an extra fee. This additional service helps businesses obtain their tax identification number without having to go through the IRS process alone.
LLC service providers typically provide calendar alerts to remind you of upcoming filing deadlines, such as annual reports and annual tax obligations, which are required by most states. Additionally, some providers may even handle the annual report filing process for you, making it easier to maintain your business's good standing.
Both ZenBusiness and IncFile offer compliance alerts to help businesses stay informed of filing deadlines and tax obligations. IncFile also provides a robust alert system and handles annual report filing in certain packages, making it easier for businesses to maintain good standing.
Some LLC services may offer less common features for an additional fee or as part of higher tier service packages.
You may need to apply for business licenses depending on your state and locality. The requirements may differ based on whether you have a physical location or an online business. Certain services can help you determine the licenses you need and assist you with the application process.
Seeking assistance from a small business expert can be beneficial, particularly for LLCs with extensive business plans or intricate requirements. Certain services provide consultations with experts, online courses taught by professionals, and other resources that may be included or offered as an additional purchase.
Tax advising and preparation services may be available through your LLC service. If these services are not offered, it is recommended to seek assistance from a tax professional to avoid potential costly mistakes.
Not all LLC formation services provide a money-back guarantee for state acceptance of your paperwork. It is advisable to choose a service that does offer this guarantee, as mistakes in filing can result in additional costs such as having to pay the filing fee again or file amendments to your formation documents at a later time.
What are the advantages and disadvantages of forming an LLC?
When considering a business entity, it is important to weigh the advantages and disadvantages of choosing an LLC. While it does provide flexibility and protection to its members, there are also complexities and potential costs to be aware of.
Advantages of an LLC
- One of the main advantages of an LLC is the limited liability it provides. Members are generally not personally responsible for the company's debts or liabilities, which helps protect personal assets from potential business creditors.
- LLCs have the option to be taxed in different ways, suchas a sole proprietorship, partnership, or corporation, which allows members to select the tax structure that best suits their specific circumstances.
- One advantage of LLCs is their operational flexibility. Unlike corporations, LLCs are not obligated to have a board of directors or hold annual meetings, which simplifies management and decision-making processes.
Disadvantages of an LLC
- Members of an LLC may be required to pay self-employment taxes on their portion of the company's profits, which could potentially be higher than corporate tax rates.
- Each state has its own regulations for forming and operating an LLC, which can add complexity to interstate business operations.
- Limited growth potential: LLCs are unable to issue stock, which can restrict their ability to raise capital and expand.
What is the process for starting an LLC?
Starting an LLC is a process that provides entrepreneurs with a flexible business structure, offering both legal protection and operational ease. The steps can vary by state, but there are general guidelines that apply universally.
Here is a concise guide on how to initiate an LLC.
- When naming your LLC, select a distinct name that sets it apart from other businesses within the state, adheres to the state's naming criteria, and avoids suggesting any association with the government.
- LLCs are required to choose a registered agent who has a physical address in the state of formation.
- To officially register your LLC, you need to submit the necessary formation documents, also known as "articles of organization," to the state's Secretary of State office.
- Although not required in every state, it is recommended to have an operating agreement that clearly outlines the rules, regulations, and provisions of your business.
- To ensure compliance with tax regulations and facilitate business operations, it is necessary to acquire a Federal Employer Identification Number (EIN) from the IRS.
The Bottom Line
Navigating the complex process of starting a Limited Liability Company (LLC) demands meticulous planning and informed decision-making. As of December 2023, MarketWatch's comprehensive review highlights the top LLC formation services, showcasing their distinct advantages and offerings.
The top choices for the best and most reliable LLC services in 2023 are:
- Best Overall: ZenBusiness
- Access to an Attorney: LegalZoom
- Free First Year: Incfile
- Business Specialist Offered: Swyft Filings
- Free DIY Option: Northwest
Additionally, Tailor Brands stands out for its highly recommended brand services.
LLC formation companies vary in their strengths, pricing structures, additional features, and levels of customer support. ZenBusiness excels in affordability and user-friendly services, while LegalZoom provides access to legal professionals beyond just LLC formation. Incfile offers an enticing free first-year package, Swyft Filings specializes in business specialists, and Northwest offers a free DIY option with personalized support. Tailor Brands focuses on creating a strong brand identity.
When considering LLC service providers, evaluating costs, additional services, customer support, and reviews becomes pivotal. The diversity in offerings caters to various preferences, making it essential to align choices with individual business needs, budget constraints, and specific requirements.
Understanding the cost breakdown among LLC service providers is crucial. Each company offers different package prices and additional charges for services like obtaining an Employer Identification Number (EIN). From ZenBusiness's free first year to LegalZoom's comprehensive Pro Package, the pricing structures reflect their services' breadth and depth.
Engaging an online LLC service streamlines the formation process, ensuring correct document filings, timely submissions, and access to additional resources like compliance alerts, operating agreement templates, EIN application assistance, and more.
Advantages of forming an LLC encompass limited liability, tax flexibility, and operational ease. However, disadvantages like self-employment taxes and limited growth potential should be carefully considered.
Starting an LLC involves multiple steps, including naming the LLC, appointing a registered agent, submitting formation documents, and obtaining an EIN.
Ultimately, the journey of establishing an LLC necessitates meticulous consideration of service provider offerings, individual business requisites, and the commitment to adhere to state regulations. The reviewed services aim to assist entrepreneurs in navigating this intricate process and laying a robust foundation for their business endeavors.