I set up my LLC last year through one of those online services because it was cheap and fast. Now I'm realizing the annual report fees and registered agent charges are adding up. I didn't compare the ongoing costs, only the initial price. Anyone else make this mistake? I'm wondering if it's worth switching or just eating the cost.
LLC Fees
I wish i'd checked the ongoing fees before choosing where to register my llc
Switching registered agents is usually straightforward. You file a change of agent form with the state and the new agent handles the rest. The bigger issue is whether yoour state has high annual report fees regardless of who you use.
What state are you in? That makes a hgue difference. Some states have $0 annual fees, others charge a few hundred.
I did the same thing. Used a budget service for the formation and didn't look at the renewal costs. By year two I was paying more than if I'd just gone with a slightly higher upfront option. I ended up switching the registered agent to a cheaper one and filing my own annual report. Saved about $80 a year. Not huge but it adds up.
Also check if your state requires publishing an LLC notice in a newspaper. That caught me off guard in New York.
New York is brutal for that. I think its only for certain counties though? Or maybe it's the whole state for LLCs. Either way it's an outdated rule.
I'm in Colorado. Annual report is $25 but the registered agent service I'm using charges $119 a year. The formation was only $50 through them but I didn't ralize the agent fee was separate and recurring.
$119 is on the high side for a registered agent. You can find reputable ones for $50-70. Or you could act as your own agent if you have a physical address in the state and don't mind your name and address being public.
Colorado is pretty cheap overall though. $25 annual report is nothing compared to states like California where it's $800 minimum franchise tax. So at least you're not there.
Just make sure if you switch agents you update the state promptly. A lapse in registered agent can cause your LLC to be administratively dissolved in some states. Not worth the the risk to save $40.
I use a local agent, costs $75 a year. Not the cheapest but they actually answer the phone when I call. Worth checking local options instead of the big online brands.
Didn't think about local options. I'll look into that before my next renewal. The auto-renewal is coming up in two months so I have some time to figure it out.