No, "free" LLC formation services aren’t entirely free. While they waive their service fees, you’ll still need to pay state filing fees, which range from $50 to $500 depending on your state. Additionally, optional services like EIN registration, operating agreements, and ongoing registered agent fees can add hundreds of dollars to your total cost.
Here’s the breakdown:
- State Filing Fees: Mandatory, $50–$500 depending on the state.
- Registered Agent Services: Often free for the first year but renews at $119–$299 annually.
- Other Add-Ons: EIN filing ($49–$99), operating agreements ($40–$99), and business license research ($99).
Providers like BusinessAnywhere, Bizee (formerly Incfile), and ZenBusiness simplify the process but often rely on upselling optional services. For example, BusinessAnywhere includes extras like a virtual mailbox, while ZenBusiness offers compliance tools at higher costs.
Key Takeaway: "Free" services cover basic filings, but hidden costs can quickly add up. Choose a provider based on your budget and the services you need.
What ‘Free’ LLC Formation Actually Costs
When LLC formation services advertise "free" formation, they’re usually referring to waiving their service fee for filing your Articles of Organization. But don’t be fooled – this doesn’t mean the process is entirely free. There are still costs you’ll need to cover.
The biggest expense? State filing fees, which range from $50 to $500 depending on where you’re forming your LLC. For instance, Texas charges $300, while California’s fee is $70. Let’s break down what you’re actually paying for when you choose a "free" LLC formation option.
What’s Actually Included in "Free" Packages
Most "free" LLC formation services only handle the basics: they’ll prepare and file your Articles of Organization with the state. Some providers sweeten the deal by including one year of registered agent service – a requirement for all LLCs – that would normally cost $119 to $249 annually. For example, BusinessAnywhere even includes extras like a virtual mailbox and online notary services in their $0 package, cutting out additional fees.
Common Exclusions That Drive Up Costs
The "free" label often hides the true cost of LLC formation. Here are some common exclusions that can add up quickly:
- EIN processing: While you can get an EIN for free directly from the IRS, many services charge $49 to $99 to handle this for you.
- Operating agreements: These aren’t legally required in most states, but they’re crucial for multi-member LLCs to establish legal protections. Templates typically cost $40 to $99.
- Business license research: Some providers charge around $99 to identify which licenses and permits your business might need.
The Registered Agent Renewal Trap
Registered agent services are required by law, and while some companies offer the first year for free, the renewal fees can be steep. For example, Bizee charges about $119 per year, ZenBusiness $199 annually, and LegalZoom up to $249 per year. Once your free period ends, these recurring costs can add up fast.
Real-World Cost Breakdown
Here’s a look at what you might actually spend, even with a "free" LLC formation service:
| Cost Component | Amount | Required? |
|---|---|---|
| State filing fee (varies by state) | $50–$500 | Yes |
| EIN application | $49–$99 | Likely needed |
| Operating agreement | $40–$99 | Recommended |
| Registered agent renewal (Year 2+) | $119–$249/year | Yes |
| Total first-year cost | $139–$698+ | Varies |
This table shows how quickly the costs can pile up, even with a "free" offer. Between mandatory state fees and optional (but often necessary) extras, it’s essential to budget wisely to avoid surprises down the road. Knowing these costs ahead of time will help you make informed decisions about forming your LLC.
1. BusinessAnywhere
BusinessAnywhere stands out by offering a completely free LLC formation service, charging only the required state filing fees. There’s no service fee, and their approach is refreshingly straightforward.
The platform’s free dashboard simplifies the LLC formation process without any hidden charges or mandatory upsells. For those who need additional services, optional add-ons are available at transparent, one-time fees:
- EIN Application: $97
- S-Corp Tax Election Filing: $97
- Beneficial Ownership Information Report (BOIR): $37
Here’s what you get with BusinessAnywhere’s free package – no surprises or extra charges:
- Company Formation: They handle all the paperwork to register your LLC or corporation in any of the 50 U.S. states.
- Registered Agent Service: Free for the first year, with an annual renewal fee of $147 after that.
- Virtual Mailbox: Unlimited mail scanning, storage, and global forwarding – services that typically cost between $240 and $780 per year.
- Online Notary Access: Remote notary services directly from your dashboard for $37 per notarization.
This all-in-one platform is designed to make compliance and document management easier for entrepreneurs. By centralizing these services, BusinessAnywhere saves you the hassle of juggling multiple providers. Up next, we’ll take a closer look at Incfile’s offerings to see how they compare.
2. Bizee
Bizee promotes a "$0 LLC formation" offer, where you only pay the state-required filing fee. Let’s break down their pricing, services, and what you actually get with this "free" claim.
Pricing Structure
With Bizee’s free LLC formation package, they’ll handle the preparation and filing of your Articles of Organization. Plus, they include one year of registered agent service at no extra charge. After that first year, the registered agent service renews at $119 per year.
Hidden Costs and Upsells
While the free package covers filing and the first year of registered agent service, additional services like expedited processing, EIN filing, and business license research are available – but at $99 each. These extras can quickly add up. On top of that, their refund policies are somewhat unclear, which could be a concern if you need to make changes or cancel.
Included Services
The free package is fairly bare-bones. It includes filing your Articles of Organization and the first year of registered agent service. However, key services like obtaining an EIN, drafting an operating agreement, or conducting business license research are not included. These must be purchased separately if needed.
Long-Term Value
The value of Bizee’s services depends on your specific needs. If you’re comfortable handling compliance and other tasks yourself, the $119 annual fee for registered agent service might be worth it. Customer support is rated around 4 out of 5 stars, though some users report inconsistent experiences. For straightforward LLC formations, Bizee can be a practical choice. However, if you need more hands-on help or additional services, you might find their approach limiting.
Next, we’ll look at another provider to continue evaluating the "free" LLC formation model.
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3. ZenBusiness
ZenBusiness, based in Texas, is an LLC formation service that stands out with its free Starter plan – requiring you to pay only your state’s filing fee. With over 2,000 customers and an impressive 4.82/5 rating, it has built a solid reputation in the industry.
Pricing Structure
ZenBusiness uses a three-tier pricing model: the Starter plan at $0 (plus state filing fees), the Pro plan at $199 per year, and the Premium plan at $299 per year (state filing fees not included). For instance, forming an LLC in California would cost you just the $70 state filing fee under the Starter plan, with no additional charges from ZenBusiness. However, the Starter plan excludes several key features. Let’s break down what’s not included.
Hidden Costs and Upsells
While the Starter plan handles basic LLC formation for free, there are additional costs for essential services. For example, obtaining an EIN (Employer Identification Number) isn’t included, so you’d need to file for it yourself. Additionally, the registered agent service – free for the first year – renews at $199 annually. If you need expedited services, such as same-day or next-day filing, those are only available with the Pro and Premium plans.
Included Services
The Starter plan ensures the accurate filing of your LLC documents and provides access to an intuitive user platform, along with a 60-day money-back guarantee. However, it doesn’t include features like EIN acquisition, operating agreement drafting, name availability searches, or expedited filing options. These services are bundled into the Pro plan, which offers a more comprehensive package for growing businesses.
Long-Term Value
ZenBusiness’s free Starter plan is ideal for those who only need the essentials, but additional costs can add up over time. For example, the annual renewal fee for the registered agent service is $199, which remains competitive compared to other providers. ZenBusiness also offers perks like accounting consultations and BBB accreditation, which can add value for entrepreneurs. Their clear distinction between free and paid services helps business owners plan for the total cost of LLC formation.
For those comfortable managing tasks like EIN filing on their own, the Starter plan paired with the ongoing registered agent fee can be a cost-effective choice. That said, many users opt for the Pro plan to access a broader range of services upfront and avoid piecemeal upsells later.
Pros and Cons of Each Provider
Here’s a closer look at the strengths and weaknesses of each provider, based on the breakdown above:
BusinessAnywhere takes the spotlight with its user-friendly, all-in-one platform for LLC formation. It combines company formation, registered agent service, virtual mailbox, and online notary into a single, streamlined dashboard. Customers often praise the quick and efficient process, allowing LLC applications to be completed in under 10 minutes. However, while the initial formation service is free, the expenses for additional services can add up over time.
Bizee (formerly Incfile) appeals to budget-conscious entrepreneurs with its free formation package. It’s a reliable choice for meeting basic LLC formation needs. However, users have noted some drawbacks, such as aggressive upselling during checkout – like business license research priced at $99 – and occasional inconsistencies in customer support. Additionally, the refund policy can be somewhat unclear.
ZenBusiness delivers a balanced service, especially for those needing compliance tools and ongoing support. Its strong customer service makes it a go-to option for entrepreneurs seeking help with administrative and compliance tasks. That said, the higher recurring costs may be a drawback for those with tighter budgets.
| Provider | Pros | Cons |
|---|---|---|
| BusinessAnywhere | Integrated platform; fast application process (under 10 minutes); modern dashboard; strong customer support | Long-term costs for extra services not fully transparent; virtual mailbox fees can be higher |
| Bizee | Free formation; affordable ongoing costs ($119/year for registered agent renewal); trusted by over 1M customers | Aggressive upselling; inconsistent support; refund policy may be confusing |
| ZenBusiness | Compliance tools; robust customer support; clear service structure; high customer satisfaction | Higher ongoing costs, including $199/year for registered agent renewal |
When deciding which provider works best for your needs, think about your long-term goals and priorities. If minimizing costs is your main concern and you’re comfortable managing some tasks on your own, Bizee offers a cost-effective solution. If you prefer a service that provides ongoing compliance tools and strong support, ZenBusiness might be worth the higher fees. For those seeking a modern, integrated experience with responsive support, BusinessAnywhere is a solid choice – just be mindful of the potential costs for additional services beyond the free formation. Weighing your budget, business needs, and comfort with self-management will help you make the best decision.
Conclusion
While free LLC formation services may seem appealing, the reality is that they often come with hidden expenses. These services typically cover only the preparation and filing of basic documents, leaving state filing fees and essential add-ons – like registered agent services – to significantly increase the overall cost. For instance, registered agent support alone can range from $119 to $299 annually.
It’s important to understand that "free" applies only to the most basic aspects of the process. Upsells and mandatory extras can quickly inflate your total investment, making it crucial to assess the full picture.
When deciding on a service, consider the long-term value of what you’re paying for. For example, ZenBusiness offers a strong suite of tools and excellent customer service, boasting a 4.7/5 rating. On the other hand, Bizee is a budget-friendly option with a $119 annual fee for registered agent renewals, while BusinessAnywhere provides a streamlined platform for business management – though additional services may add to your costs.
The takeaway? Plan ahead for these add-ons to avoid unexpected fees. A low upfront price might not always translate to the best overall value. Choose a provider whose pricing, transparency, and support align with your business needs and goals, ensuring you’re set up for success both now and in the future.
FAQs
Are there hidden costs with ‘free’ LLC formation services?
While the idea of "free" LLC formation services might grab your attention, they often come with strings attached. Hidden costs can sneak in, such as fees for essential services like registered agent support, compliance alerts, or document filing. Many providers also lean on upselling optional features to make up for the initial "free" offer.
To steer clear of unexpected expenses, take the time to thoroughly read the terms of service and pricing breakdown. Make sure you know exactly what’s covered in the base package and what might lead to extra charges.
Why do state filing fees vary, and what role do they play in forming an LLC?
State filing fees for forming an LLC can differ widely because each state has its own rules and fee structures. These fees are influenced by factors like administrative costs, local regulations, and demand. Depending on the state, you might pay anywhere from $50 to over $500. For instance, forming an LLC in California costs $70, while in Texas, the fee is $300.
These fees are essential because they cover the administrative work required to process and officially register your LLC. Without paying them, your business won’t be legally recognized as an LLC by the state. When planning your budget, make sure to include these costs, as they are separate from any charges you might incur if you use a formation service.
Why should you think about long-term registered agent costs when selecting an LLC formation service?
When choosing an LLC formation service, it’s important to think about the long-term costs of registered agent services. Some companies might lure you in with free or low-cost formation offers upfront, but the recurring fees for registered agent services can quickly add up, potentially surpassing what you initially anticipated.
A provider like Business Anywhere can make things easier by including registered agent services in a well-rounded package. By bundling essentials like company formation, a virtual mailbox, and online notary services, you get everything you need in one place. This approach not only minimizes unexpected expenses but also saves you valuable time.
