Best LLC Formation Services in 2026
Formation services evaluated for pricing, features, and ongoing compliance support.
Forming a limited liability company is one of the most common first steps for new business owners in the United States. An LLC provides a flexible business structure that combines liability protection with tax simplicity, making it the default choice for freelancers, small business owners, and startups alike. While you can file the paperwork yourself through your state's Secretary of State office, LLC formation services exist to simplify the process, reduce errors, and handle ongoing compliance requirements on your behalf.
We reviewed the leading LLC formation services to help you understand what each one offers, where they differ, and which ones deliver the best overall value. Whether you're launching your first side project or formalizing an existing business, this guide breaks down everything you need to know before choosing a formation partner.
What Is an LLC?
A limited liability company (LLC) is a business structure recognized by all 50 states that separates your personal assets from your business liabilities. It's one of the most popular entity types for small businesses because it offers a balance of legal protection, tax flexibility, and operational simplicity.
Limited Liability Protection
Creates a legal separation between you and your business. If your business is sued or incurs debts, your personal assets are generally protected.
Pass-Through Taxation
The business itself does not pay federal income tax. Profits and losses pass through to the owners' personal tax returns, avoiding double taxation.
Flexible Management
No board of directors, annual shareholder meetings, or rigid management structures required. An LLC can be managed by its members directly or by designated managers.
State-Level Variation
LLCs are governed by state law, and rules vary from state to state. Filing fees, annual reports, franchise taxes, and naming conventions all differ by jurisdiction.
The defining feature of an LLC is that it creates a legal separation between you and your business. If your business is sued or incurs debts, your personal assets — such as your home, savings, and personal bank accounts — are generally protected. This protection is not absolute, however. Courts can "pierce the corporate veil" if you commingle personal and business funds, fail to maintain proper records, or use the LLC to commit fraud. Maintaining clear boundaries between personal and business finances is essential to preserving liability protection.
By default, LLCs are treated as pass-through entities for tax purposes. This means the business itself does not pay federal income tax. Instead, profits and losses pass through to the owners' personal tax returns, where they are taxed at individual income tax rates. This avoids the "double taxation" that C-corporations face, where income is taxed at both the corporate level and again when distributed as dividends. LLCs also have the flexibility to elect S-corp or C-corp tax treatment if it becomes advantageous as the business grows.
Unlike corporations, LLCs are not required to have a board of directors, hold annual shareholder meetings, or follow rigid management structures. An LLC can be managed by its members (owners) directly or by designated managers. This flexibility makes LLCs well-suited for small businesses that want legal protection without the administrative overhead of a corporation. The operating agreement — rather than state statute — governs how the business is run, giving owners significant freedom to structure things as they see fit.
LLCs are governed by state law, and the rules vary from state to state. Filing fees, annual report requirements, franchise taxes, naming conventions, and publication requirements all differ depending on where you form your LLC. Some states, like Wyoming and New Mexico, are known for low fees and minimal ongoing requirements. Others, like California, impose an annual franchise tax regardless of revenue. Understanding your state's specific requirements is an important part of the formation process.
SBA: Choose Your Business Structure↗ · IRS: Limited Liability Company (LLC)↗
Our Top Picks
Based on our evaluation, these are the top LLC formation services we recommend.
ZenBusiness
$0 starter plan with a 4.8-star Trustpilot rating, award-winning support, and a user-friendly formation process.
Northwest Registered Agent
Transparent $39 formation pricing that includes free registered agent service, business address, and mail scanning.
LegalZoom
The most established formation brand with millions of LLCs formed and comprehensive legal services beyond formation.
What We Evaluated
We assessed each LLC formation service across eight key criteria to determine which providers offer the best combination of value, features, and support.
Base Pricing
We compared the cost of each provider's basic formation package. Some services offer free base tiers, while others charge $50 to $300 or more for entry-level packages.
Included Features
We examined what comes standard with each service, including Articles of Organization preparation, operating agreement templates, EIN obtainment, and compliance reminders.
Upsells and Hidden Fees
Many formation services advertise low prices but make their money on aggressive upsells. We evaluated how transparent each provider is about pricing.
Turnaround Time
We compared standard processing times and the cost of expedited options. Some services process filings within one to three business days at no extra charge.
Registered Agent Services
Every LLC requires a registered agent. We evaluated whether each provider includes this service, the cost after introductory periods, and quality of service.
Customer Support
We assessed availability, responsiveness, and helpfulness of each provider's support, including channels, hours, and representative knowledge.
User Experience
We evaluated the overall experience from signup through filing completion, including website design, ordering clarity, and dashboard functionality.
Ongoing Compliance Support
We evaluated how well each service helps you stay compliant after formation, including annual report filing, state compliance alerts, and additional services.
Who Should Use an LLC Formation Service?
Filing an LLC yourself is straightforward in most states — it typically involves completing a one- or two-page form and paying a filing fee. So why would you use a formation service? Here are the situations where it makes the most sense.
First-Time Business Owners
A formation service can guide you through the process and help you avoid common mistakes, handling state-specific requirements, naming conventions, and required documentation.
Time-Conscious Entrepreneurs
If you'd rather spend your time building your business than navigating state filing websites and paperwork, a formation service handles the administrative work for you.
Multi-State Operations
If you plan to operate in multiple states, the filing and compliance requirements become significantly more complex. Formation services that handle foreign qualifications can save considerable time.
Owners Who Want Ongoing Support
If you want help staying compliant year after year with annual report reminders, registered agent service, and document amendments, a formation service can serve as a long-term partner.
What to Consider Before Forming an LLC
Before you choose a formation service or file on your own, there are several important decisions and requirements to understand.
State of Formation
Most small businesses should form in their home state
While Delaware, Wyoming, and Nevada are often marketed as favorable states for LLC formation, forming in a state where you don't operate typically means you'll need to also register as a foreign LLC in your home state — doubling your filing fees and compliance obligations. The benefits of out-of-state formation generally only make sense for larger businesses, those with investors, or companies with specific legal or privacy needs.
Most small business owners should form their LLC in the state where they live and do business. While Delaware, Wyoming, and Nevada are often marketed as favorable states for LLC formation due to their business-friendly laws and privacy protections, forming in a state where you don't operate typically means you'll need to also register as a foreign LLC in your home state — doubling your filing fees and compliance obligations. The benefits of out-of-state formation generally only make sense for larger businesses, those with investors, or companies with specific legal or privacy needs.
Registered Agent Requirement
Every state requires LLCs to designate a registered agent — a person or service authorized to receive legal documents, tax notices, and official correspondence on behalf of the business. You can serve as your own registered agent in most states, but this requires you to be available at a physical address during business hours. Most business owners opt for a professional registered agent service for convenience and privacy.
Operating Agreement
An operating agreement is an internal document that outlines how your LLC will be governed. While not required in every state, having one is strongly recommended — even for single-member LLCs. It establishes the rules of your business and strengthens your liability protection. Key elements of an operating agreement include:
- Ownership percentages and capital contributions
- Profit and loss distribution
- Management structure and decision-making authority
- Rules for adding or removing members
- Procedures for dissolving the LLC
- Transfer of ownership interests
EIN (Employer Identification Number)
EINs are free from the IRS
You can apply for an EIN directly on the IRS website and receive your number immediately. Be cautious of formation services or third-party websites that charge significant fees for this service, as the application process itself costs nothing.
An EIN is a federal tax identification number assigned by the IRS. You'll need one to open a business bank account, hire employees, and file business tax returns. The IRS provides EINs for free — you can apply directly on the IRS website and receive your number immediately. Be cautious of formation services or third-party websites that charge significant fees for this service, as the application process itself costs nothing.
Ongoing Requirements
Forming an LLC is not a one-time event. Most states require ongoing filings and fees to keep your LLC in good standing. Common ongoing requirements include annual or biennial reports (typically $25 to $300 depending on the state), franchise taxes in some states (California charges a minimum of $800 per year), maintaining a registered agent, and keeping your business information current with the state. Failure to meet these requirements can result in penalties, loss of good standing, or administrative dissolution of your LLC.
Business Licenses and Permits
Forming an LLC does not automatically grant you the right to operate your business. Depending on your industry and location, you may need federal, state, and local licenses and permits. Requirements vary widely — a home-based consulting business may need nothing beyond the LLC itself, while a restaurant or construction company will need multiple permits. Research your specific requirements before you begin operating.
Delaware Division of Corporations↗ · IRS: Apply for an EIN Online↗ · SBA: Apply for Licenses and Permits↗
How to Form an LLC
Whether you use a formation service or file on your own, the process follows the same general steps. Here's what's involved.
Choose a Business Name
Your LLC name must be unique within your state of formation and must include a designator such as "LLC" or "Limited Liability Company." Most states maintain a searchable business name database where you can check availability. Consider whether your desired name is available as a domain name and on social media platforms as well. Some states allow you to reserve a name for a short period while you prepare your filing.
Choose a Registered Agent
Designate a registered agent before filing your Articles of Organization. This can be yourself, another person in your state, or a professional registered agent service. If you choose a professional service, you'll need their information ready when you file.
File Articles of Organization
The Articles of Organization (called a Certificate of Formation in some states) is the document that officially creates your LLC. You file this with your state's Secretary of State office or equivalent agency. The information required typically includes your LLC name, registered agent information, business address, the names of organizers or members, and whether the LLC will be member-managed or manager-managed. Filing fees range from $40 to $500 depending on the state.
Create an Operating Agreement
Draft an operating agreement that outlines ownership, management, and operational rules for your LLC. While this document is filed internally rather than with the state in most cases, it's a critical governance document. Many formation services include a basic operating agreement template, but you may want to consult an attorney if your LLC has multiple members or complex ownership arrangements.
Obtain an EIN
Apply for an Employer Identification Number through the IRS website. The online application is free and provides your EIN immediately upon completion. You'll need this number before you can open a business bank account or hire employees.
Open a Business Bank Account
Open a dedicated bank account for your LLC. This is essential for maintaining the separation between personal and business finances that preserves your liability protection. You'll typically need your Articles of Organization, EIN confirmation, operating agreement, and personal identification to open the account.
Understand Your Ongoing Requirements
Research your state's ongoing compliance requirements, including annual report deadlines, franchise tax obligations, and any other periodic filings. Set up reminders or use a compliance service to ensure you never miss a deadline. Falling out of good standing can expose you to penalties and jeopardize your liability protection.
Common Mistakes to Avoid
Based on our research, these are the most frequent mistakes business owners make when forming and maintaining an LLC.
Forming in the Wrong State
Don't fall for marketing that pushes Delaware, Wyoming, or Nevada formation if you operate locally. For most small businesses, forming in your home state is simpler, cheaper, and avoids the complexity of foreign registration. Out-of-state formation makes sense in specific circumstances, but it's not the default best choice.
Skipping the Operating Agreement
Even if your state doesn't require one, operating without an operating agreement leaves your LLC governed entirely by default state statutes — which may not align with your intentions. This is especially risky for multi-member LLCs where disputes over ownership, profits, or management authority can arise. Take the time to create one, even if it's a basic document.
Commingling Personal and Business Finances
Using your personal bank account for business transactions or paying personal expenses from your business account undermines the liability protection your LLC provides. If a court determines that you haven't maintained a clear separation between personal and business finances, it may "pierce the corporate veil" and hold you personally liable for business debts. Open a dedicated business bank account and use it exclusively for business transactions.
Missing Compliance Deadlines
Every state has ongoing requirements for maintaining an LLC in good standing. Missing an annual report filing or franchise tax payment can result in late fees, loss of good standing status, or even administrative dissolution of your LLC. Set calendar reminders, use a compliance monitoring service, or choose a formation provider that includes compliance alerts.
Choosing a Formation Service Based on Price Alone
The cheapest formation service is not always the best value. Free or low-cost services often make their money through aggressive upsells, limited customer support, and slow processing times. Consider the total cost of ownership — including registered agent fees, compliance services, and the value of your time — rather than focusing solely on the base formation price.