Why Most "$0 LLC" Marketing Is Misleading
The business formation industry is built on misleading pricing. "Free LLC formation" advertisements omit the state filing fee (which you pay regardless), then upsell registered agent services at $200-$300/year, operating agreement templates at $99-$199, EIN filing at $79 (the IRS does this for free), and "compliance" subscriptions you don't need. The advertised $0 often becomes $400-$800 in the first year.
The actual cost of forming an LLC has three components most people miscalculate:
- State filing fee: Ranges from $35 (Kentucky) to $500 (Massachusetts). Most states fall between $50 and $200. This is unavoidable; you pay it directly to the state.
- Registered agent: Required in every state. Can be free if you use your own address (DIY) and meet the state's requirements. Otherwise $100-$300/year through a service.
- Annual compliance costs: Often forgotten in formation cost analyses. Annual report fees ($0-$300), franchise taxes (some states), and registered agent renewals add up over 5 years to often exceed the initial formation cost.
BizFormPro shows all three components transparently. Pick your state and registered agent option; see the actual 5-year cost without marketing inflation.
The Four Calculators Explained
1. LLC Formation Cost
For most small business owners. Select your state, choose how you'll handle the registered agent (DIY vs services), and see total cost over years 1-5. The output breaks down state filing fee, registered agent costs, operating agreement option, and annual fees so you can see exactly where the money goes.
2. Entity Comparison (LLC vs S-Corp vs C-Corp)
For owners trying to decide which entity type makes sense. Input projected revenue, profit, and ownership structure. The calculator illustrates the tax implications of each entity type — pass-through taxation (LLC default), S-Corp election (potential self-employment tax savings), and C-Corp (relevant for businesses planning to raise outside investment). This is illustration only; consult a CPA for your specific situation.
3. State Comparison (Delaware vs Wyoming vs Your State)
The "should I form in Delaware?" question gets asked constantly. Our state comparison shows total 5-year cost for two states side-by-side, including formation fees, annual reports, franchise taxes, and the often-overlooked foreign qualification cost (registering in your home state if you form elsewhere).
4. Registered Agent Comparison
Comparison of major registered agent services: Northwest, LegalZoom, Bizee (formerly IncFile), ZenBusiness, Inc Authority. Pricing, features, and tradeoffs. For most single-state LLCs, the cheapest legitimate service (currently Northwest at $125/year) is fine. For multi-state operations or high-confidentiality needs, consider professional registered agents at higher tiers.
The Most Important Decision: Where to Form
"Should I form in Delaware?" is the most common question we receive. The honest answer for most small businesses: no.
Delaware's reputation as a business-friendly state is real but applies primarily to large corporations and venture-backed startups. For most LLCs and small corporations, forming in Delaware adds cost and complexity without meaningful benefit. The math:
- Delaware filing fee: $90 (LLC), $109 (Corp) — competitive
- Delaware annual franchise tax: $300 (LLC), $175-$200K+ (Corp) — typically higher than home state
- Required registered agent in Delaware: $100-$300/year — additional cost if you're not based there
- Required "foreign qualification" in your home state if you do business there: $50-$500 filing fee plus your home state's annual fees
- Two states' annual reports and compliance: doubled administrative burden
Net effect: forming in Delaware while operating elsewhere typically adds $200-$600 in annual costs plus filing complexity, in exchange for benefits (corporate case law, business court system, anonymity options) that most small businesses never need.
Federal Considerations Beyond State Filings
EIN (Employer Identification Number)
Required for hiring employees, opening business bank accounts, and partnership/corporation tax filings. Single-member LLCs can sometimes use the owner's SSN but most experts recommend getting an EIN anyway for separation. The IRS issues EINs free. Online application takes 10-15 minutes. Services charging $79-$149 to "get your EIN" are charging for paperwork you can do yourself in the same time.
Beneficial Ownership Information (BOI) reporting
The Corporate Transparency Act introduced BOI reporting requirements through FinCEN starting January 2024. The requirement has been subject to legal challenges and may be modified; check current status before filing. As of early 2026, status of requirements varies depending on entity type and recent court rulings — consult a business attorney for current requirements.
State tax registration
Beyond formation, your state likely requires sales tax registration (if selling goods), employer registration (if hiring), and possibly industry-specific licensing. These are separate from formation and typically free or low-cost but easy to overlook.
Frequently Asked Questions
- Is forming an LLC really worth the cost?
- For most businesses generating significant revenue or holding assets, yes. The personal liability protection (your personal assets generally aren't at risk for business debts and lawsuits) typically justifies the formation and annual costs. For very small businesses or hobby ventures with minimal liability risk, sole proprietorship may be sufficient — though the protection gap should be discussed with a business attorney.
- Why do registered agent services cost so much?
- The actual service (receiving legal documents and forwarding them) is minimal. Most of what you're paying for is the privacy of keeping your home address off public records, reliable forwarding when you're traveling or change addresses, and (with higher-tier services) compliance reminders for annual reports. For a single-member LLC operating from a stable address, DIY is legitimate and free. For multi-member LLCs, multi-state operations, or those wanting privacy, services starting around $125/year make sense.
- Should I elect S-Corp tax status?
- S-Corp election can save self-employment tax for LLCs with significant profit (typically $50K+ above the owner's reasonable salary), but requires running payroll, filing additional returns, and maintaining "reasonable compensation" justification. The breakeven point where savings exceed compliance costs is typically $40K-$80K of profit above market salary, but the exact number depends on your state, industry, and situation. Discuss with a CPA before electing.
- What's the difference between LegalZoom, Northwest, IncFile, and ZenBusiness?
- All can legitimately form your LLC. Northwest is generally considered the best value for registered agent service ($125/year with no aggressive upsells). LegalZoom has the most brand recognition but charges premium prices. IncFile (now Bizee) and ZenBusiness are aggressive on upsells but reasonable on base prices. The cheapest legitimate option is forming directly through your state ($0 in service fees, just the state filing fee), then using a registered agent service if needed.
- How long does formation take?
- State processing times range from instant (some states with electronic filing) to 4-6 weeks (paper-heavy states or during high-volume periods). Wyoming, Colorado, and Nevada are typically fastest. California, New York, and Massachusetts are typically slowest. Expedited filing (additional $25-$200 fee) is available in most states if you need it faster.
- Do I need a lawyer to form an LLC?
- Not legally required for simple single-member or family LLCs in most states. The forms are designed to be self-service. However, an attorney becomes valuable when there are: multiple members with complex ownership structures, outside investors, intellectual property considerations, employment law concerns, multi-state operations, or industry-specific licensing requirements. Many business attorneys charge $500-$1,500 for LLC formation packages including a customized operating agreement.
- Do you store my information?
- No. All calculations happen in your browser. Your state choice, ownership details, projected revenue, and other inputs never leave your device. We have no servers receiving or storing this information.
About This Calculator
BizFormPro was built by an independent team in Botswana with backgrounds in software engineering, small business operations, and US business compliance research. We are not US-licensed attorneys, CPAs, or registered agents. We are educators who built the tool we wished existed when navigating business formation ourselves.
Our state filing fee data is updated annually from each state's Secretary of State website. Registered agent pricing is verified quarterly. Federal compliance information (EIN, BOI) reflects current rules as of early 2026; verify current status before filing.
If you spot outdated information or want to suggest improvements, please contact us.