Should You Use an LLC Service or Do It Yourself?
The honest comparison of using a formation service versus filing your LLC yourself. We break down the real costs, time investment, and potential pitfalls of each approach.
Side-by-Side Comparison
| Factor | Formation Service | DIY Filing |
|---|---|---|
| Total Cost | $0-$299 + state fees
May include extras like registered agent, EIN, operating agreement | $50-$500 (state fees only)
Must handle registered agent and documents separately |
| Time Required | 15-30 minutes Simple online forms, service handles everything | 4-8 hours Research requirements, fill forms, visit offices/mail documents |
| Processing Speed | 1-7 days + state time
Same-day options available | State processing only 3 days to 6 weeks depending on state |
| Registered Agent | ✓ Usually Included $0-$199/year, maintains privacy | ✗ DIY Required Must use your address or hire separately |
| Compliance Support | ✓ Included Alerts, reminders, filing assistance | ✗ Self-Managed Must track all deadlines yourself |
| Operating Agreement | ✓ Often Included Customized for your state | ⚠ Find Template Must source and customize yourself |
| EIN Application | $0-$159 Service handles IRS filing | Free from IRS Apply directly online |
| Error Risk | Low Professional handling, guarantees offered | Moderate Mistakes can delay or void filing |
| Best For |
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What DIY LLC Formation Actually Involves
If you choose to file your LLC yourself, here's exactly what you'll need to do:
Choose and Check Your Business Name
Search state database, ensure availability, follow naming rules
Select a Registered Agent
Find someone available during business hours at a physical address in your state
File Articles of Organization
Complete state forms, pay fees, submit online or by mail
Create Operating Agreement
Draft document outlining ownership and operating procedures
Get an EIN from IRS
Apply online for free, needed for taxes and banking
Comply with Ongoing Requirements
Track and file annual reports, maintain records, pay annual fees
Warning: Requirements vary significantly by state. Some states require publication notices, additional licenses, or specific language in formation documents. Research your state's specific requirements carefully.
Common DIY Mistakes That Cost Time & Money
Incorrect Name Format
Forgetting "LLC" suffix or using prohibited words can cause rejection and delays.
Missing Annual Reports
Forgetting to file annual reports can result in penalties or administrative dissolution.
No Operating Agreement
Skipping this crucial document can lead to disputes and pierce the corporate veil.
Mixing Personal & Business
Not separating finances properly can eliminate LLC liability protection.
Wrong State Selection
Forming in Delaware/Nevada unnecessarily adds complexity and foreign LLC fees.
Improper Agent Service
Using yourself as registered agent exposes your address and risks missing documents.
Our Honest Recommendation
- This is your first business
- Your time is worth more than $100/hour
- You want compliance reminders
- You need a registered agent
- Peace of mind is important to you
- You've formed LLCs before
- You have legal/business experience
- Budget is extremely tight
- You enjoy paperwork
- Simple single-member LLC
Bottom Line:
For most entrepreneurs, the $0-299 cost of a formation service is worth the time savings, reduced stress, and professional handling. The few hundred dollars you might save doing it yourself rarely justifies the hours of research, risk of errors, and ongoing compliance burden.
Ready to Get Started?
Whether you choose to use a service or go the DIY route, the important thing is to start. Don't let analysis paralysis keep you from launching your business.
Still unsure? Check our detailed cost breakdown to see exactly what you'll pay with each approach.