I'm forming a single-member LLC in a state where the filing fee is only $50. I looked at LegalZoom and their basic package is around $100 plus state fees, and their expedited or registered-agent bundles cost much more. If my state's forms aren't that complicated, what exactly am I paying them for? Has anyone here filed directly and regretted it, or paid a service and felt it was worth it?
LLC Formation
My state filing fee is low, so why would I pay LegalZoom?
I filed my LLC directly with the state last year. I think I paid about $90 total. The form was basically my name, address, and the registered agent's information. I don't think I would have gotten much from a service.
If yoi are comfortable reading the state's instructions and your name is straightforward, the DIY route is usually fine. The reason people pay is when they want someone else to catch small mistakes, or they want the registered agent service bundled in. I've seen people use a service mainly because they didn't want to deal with the state website, not because the forms were hard.
Does anyone know if a service actually files anything you couldn't do yourself? I've heard they just fill out the same form and submit it. If so, thatt's a lot of money for convenience.
Not always the same. Some services include things like an EIN application or a operating agreement template. But you can get an EIN directly from the IRS for free, and most states have sample operating agreements or you can write a simple ne. The convenience is real but so is the markup.
I used a service for my first LLC and did the second one myself. The main difference was that the service bundled registered agent for a year, but their renewal was higher than what I could find elsewhere. Filing myself took maybe twenty minutes once I foun the right page on the state site.
Be careful about the registered agent part. A lot of the cheap packages include a registered agent but the renewal is where they make money. Double-check the annual or biennial report fees in your state too.
The only reason I'd pay someone is if I lived ut of state and needed a registered agent there. Otherwise, no.
One thing worth mentioning: filing directly means you are responsible for any typo in the business name or agent address, and corrections can cost extra in some states. I had a friend who misspelled her LLC name and had to file an amendment. A service might catch that, but it's not guaranteed either. I'd just read the form twice.
Tractorbeam_77: that's a good point. I didn't think about the amendment fees.
Also, the service often does not include the state fee in their advertised price. So the $100 you see might be on top of the $50 filing fee. Read the fine print carefully.
I'd say if your state fee is that low and your business is a simple single-member LLC, the DIY route is worth it. Put the savings toward a domain name or something useful.
Has anyone checked whether the state's online filing portal has a help line? Sometimes they will walk you through it if you get stuckk. That's free.