What are the pros and cons of an LLC filing service? The key advantages of an LLC filing service are fast efficient filing of your LLC application, experienced professional support, packages & price plans to suit a wide range of businesses and the fact that you no longer have to worry about processing your LLC filing with state authorities. And, the main disadvantages of using an LLC filing service are fees and occasional upselling – see below for more.
ADVANTAGES AND DISADVANTAGES OF AN LLC FILING SERVICE
What are the advantages and disadvantages of an LLC filing service? Are you a business owner and considering hiring an LLC formation company to process your LLC filing? If you want some more information before you commit – see below. We cover everything you need to know about the pros and cons of using an LLC filing service.
LLC FORMATION SERVICE PROS & CONS
WHAT IS AN LLC?
First up, what is an LLC? An LLC is a type of business structure used to run a business. AN LLC is recognized as a legal entity and it combines some of the features of a sole proprietorship with those of a corporation.
LLC stands for ‘limited liability company’ and is a very popular choice of company structure. AN LLC offers several advantages to its owners, including liability protection, pass-through taxation, and a flexible management structure. For more see – What Is an LLC?
WHAT IS AN LLC FILING SERVICE?
An LLC filing service is a company that specializes in processing LLC formation applications with state authorities. These companies can take care of all the steps involved in registering your LLC – such as form filling, document submission, and liaising with the secretary of state.
Registering an LLC with the state authorities can be a time-consuming process and engaging the services of a professional formation company can save you time and free you up to focus on running your business.
There are many companies out there to choose from and they offer a wide range of packages to suit varying business needs. And, their services are available for a reasonable fee – and sometimes free. You can view the top LLC services over here – The Best LLC Formation Companies 2024.
ADVANTAGES OF AN LLC FILING SERVICE
Let’s take a look at the key advantages of an LLC filing service. What are the pros of hiring an LLC formation company to process your application?
PROFESSIONAL SERVICE
An LLC formation company offers a professional service. Filing your LLC and completing your company registration is what they specialize in. If you’re not familiar with the process involved it can be a daunting task.
There are forms to be completed, articles of organization to be created, fees to be paid, and business licenses and permits to be applied for. If you haven’t registered an LLC before it can be a steep learning curve.
Hiring an LLC formation company means you can leave the filing to the professionals. It frees you up, allows you to focus on running your business, and gives you the reassurance that your LLC filing is being taken care of by experienced professionals.
SAVES YOU TIME
Bu hiring an LLC formation service you will free yourself from having to spend time on paperwork document submission. The steps involved in forming an LLC can be a draining process. Especially if you have not done it before and have to learn as you go.
If you value your time and are willing to pay a small fee – then hiring a formation service is the way to go.
FAST FILING TURNAROUND
Professional LLC filing companies can get your application processed quickly. If you’re in a rush, or just want to move the filing along as quickly then you should consider hiring a formation company.
This is their bread and butter and what they specialize in. Because these companies know what they’re doing they can complete the filing more efficiently – and more quickly.
REASONABLE PRICING + FREE PACKAGES
They’re great value too. Prices vary by company but you can expect basic filing packages to be in the region of $50-$100. So, shop around.
Premium packages that include additional services are priced anywhere between $150-$300. If all you want to do is get your LLC registered, you’ll find the basic packages include everything you need.
And, better still, some companies offer free packages. They’ll give you free access to an on-site dashboard that will walk you through the process of filing your application – completely free of charge.
RELATED
TAILORED PLANS
LLC filing companies offer a range of tailored plans that will cater to most business needs. Most companies have three packages to choose from – silver, gold, and platinum. Silver is the basic and cheapest option but it will include everything you need to get your LLC registered.
The platinum package will be the premium and most expensive option. It will include a range of additional features. The gold package will sit somewhere between the two. And, some companies offer an a-la-carte service where you can pick and choose the services you want to tailor it to your business requirements.
VERY USER FRIENDLY
The best LLC filing services are very user-friendly. They have many years of experience in the industry and know how to work with business owners. These companies offer excellent customer support either via telephone, online, or both.
They also have user-friendly intuitive online dashboards that allow you to access and manage your filing. Customer feedback is positive and it makes for a pleasant LLC formation experience.
FILING GUARANTEE
Many LLC filing services offer a guarantee that they will successfully process your application. This can be a weight off your shoulders when you hand over the reins of the application. A guarantee means you can feel confident that the filing will be processed diligently and successfully.
FREE REGISTERED AGENT SERVICE
Many LLC formation companies offer a free registered agent service when you purchase one of their LLC filing packages. Note, that in most cases the registered agent is offered free for the first year only. The registered agent service is bundled in for free.
This means you won’t have to go through the hassle of searching for a suitable registered agent. The formation company will do it for you. Using a third-party service protects the identity of any individual you would otherwise have named as your registered agent. For more see – What Is a Registered Agent?
OPERATING AGREEMENT SERVICES
If you are forming an LLC you will have to write an Operating Agreement. To outline how the company will be run. Although this document is not a legal requirement, it is highly recommended that you create one from the outset. Some LLC formation services will help you create this document.
An operating agreement covers all the details of how the company will be structured, operated, and managed. It acts as a legal contract that should be signed by all LLC members.
TAX ADVICE
Many LLC formation companies offer tax advice – often as an optional add-on when you sign up for a filing package. For a small fee, you can have a formal consultation with a tax professional or business lawyer. They will help you assess your business and advise on the best plan for your tax affairs. For more, check out How Is an LLC Taxed?
LEGAL ADVICE
Similarly, some of the best LLC filing companies also offer legal advice. In fact, some of them specialize in offering business legal advice.
If you are forming an LLC and envisage you will need ongoing legal support you should look out for such a company. For a small fee, you can have access to legal advice as well as help getting your LLC registered.
DISADVANTAGES OF AN LLC FILING SERVICE
What are the cons of hiring an LLC formation company? Let’s take a look at the disadvantages of an LLC filing service.
FEES
If you hire the services of an LLC formation company, you’ll have to pay a fee. Although, some companies do offer a limited free service. The fees vary from one company to the next and also by the package you choose. These fees are in addition to the fee you will pay to the secretary of state.
You’ll find that LLC filing companies offer a range of packages, from basic to premium. Basic packages come with fees in the region of $50-$100. And, premium filing packages range from $150-$300. However, even basic packages will include everything you need to get your company registered.
RECURRING COSTS
Watch out for recurring costs. When you sign up for a filing service establish whether the fee you are paying is a once-off cost or is it a recurring charge.
If you want to pay a once-off fee then make sure you won’t be hit with an unexpected charge 12 months down the road. Our advice is to be clear about what you are signing up for and what you can expect in terms of fees. This way there will be no nasty surprises.
UP SELLING
Companies like to up-sell their products and LLC services are no exception. Some are pushier than others. If you know what you want – be clear. If all you need is the basic package to get your filing processed then let the company know.
There is no need to sign up for expensive extras that you don’t need. If you find the company is pushing a hard up sell – you can always go elsewhere. There’s plenty of competition in the market.
TIPS FOR USING AN LLC FILING SERVICE
Are you planning on hiring an LLC formation service? Now that we’ve covered the pros and cons of an LLC filing service let’s take a look at how to best use one.
We’ve got some tips for you. To get the best possible experience from your LLC formation company we have come up with a 7-point guide to help you. See below for the topics covered.
- Surveying the Market
- Understanding Essential Services vs Nice to Haves
- Recurring Charges
- Registered Agent Services
- Expedited Filings
- S Corp Tax Benefits
- Company Customer Ratings
Check it out over here – Tips For Using an LLC Registration Service.
FAQ PROS AND CONS OF AN LLC FILING SERVICE
Below are the questions we most commonly get asked when discussing the pros and cons of an LLC filing service.
HOW MUCH DOES AN LLC FILING SERVICE COST?
The cost of an LLC filing service varies depending on the company you choose and the package you go for. On average, you can expect to pay between $50-$100 for a basic service and $150-$300 for a premium package.
CAN YOU FORM AN LLC YOURSELF?
Yes, you can form an LLC yourself. You do not have to hire an LLC formation company. There are several steps and tasks you will need to complete. If you are unfamiliar with the process check out – How to Form an LLC.
WHAT ARE THE BENEFITS OF FORMING AN LLC?
The main benefits of forming an LLC are liability protection, pass-through taxation, and the fact that they are easier to run compared to other business models. For more information check out – Top 5 Benefits of an LLC.
WHAT MANAGEMENT STRUCTURE DOES AN LLC USE?
An LLC can choose from two management structures, either member-managed or manager-managed. If an LLC is managed by the owners of a company it is called a member-managed LLC. And, if the owners choose to appoint a manager or managers to run the business it is called a manager-managed LLC.
HOW MUCH DOES IT COST TO FORM AN LLC?
The cost of forming an LLC will depend on the state you choose to register your company. Registration fees vary from one state to the next. For a quick breakdown of state fees and LLC costs, check out – How Much Does an LLC Cost?
DO YOU NEED A BUSINESS LICENSE FOR YOUR LLC?
Yes, almost all businesses need some kind of a license or permit to do business. The precise license or permits you need will depend on the state you are doing business in and the nature of your business. For more information, check out – LLC Business Licenses.
READ NEXT
- PROS & CONS OF REGISTERED AGENT SERVICES
- ADVANTAGES & DISADVANTAGES OF LLC
- LLC vs SOLE PROPRIETORSHIP
- LLC vs PARTNERSHIP
- LLC vs S CORP
- LLC vs C CORP
- LLC FOR PROPERTY RENTAL
About the Author
Erik Chambers: Senior Editor
Erik is a 30-year industry veteran with a wealth of experience in cross-functional areas ranging from business consulting to business education. He has worked in the private sector where he has advised start-up enterprises on early formation, capital acquisition, and tax issues.
While he specializes in business formation he has also held roles in several academic institutions where he teaches organizational decision-making, business strategy, and operations management. Erik is a graduate of the McCombs School of Business at the University of Texas at Austin.