I used one of those online formation services because the homepage said "LLC starting at $49." By the time I checked out it was $199, and then my state charged a separate franchise tax. What exactly was I paying the extra $150 for?
LLC Costs
My LLC cost twice as much as the formation website advertised
The $49 usually covers just the filing agent's basic fee. State filing fees, registered agent service, and compliance notifications get added on at checkout. It's rarely the full cost.
Same thing happened to me. The upsells were the problem. I didn't need the expedited processing or the certificate of good standing they pushed.
Did you read the line-item breakdown? Most of those sites liost the state fee separately from their service fee.
I did after the fact. The state fee was $100. Their service fee was another $99 on top of the advertised $49. I just didn't catch it until the receipt.
Filing directly wwith the state is usually cheaper. You only pay the state fee and do the paperwork yourself.
I paid $49 for the basic package and then $50 for the registered agent. That part was disclosed, but it still stung. Next time I'll file directly.
What state are you in? Some states have annual report fees thait make the formation cost look small.
I'm in Colorado. The initial filing was $50, and I'm already seeing an annual report fee coming up.
Colorado's filing fee is $50, so the extra $150 was entirely the service's markup and add-ons. That's steep for something you can do yourself in an hour.
I used a similar site and ended up paying around $300 total. The convenience was worth it to me, but I get why people feel misled.
Check your confirmation email. There's usually a line that says "third-party fees not included" in small print.
Yeah, it's there. I just didn't read closely enough. Live and learn, I guess. Next time I'll file directly with the state.
At least you know now. Plenty of people pay that markup every year without realizing it.