Cheapest LLC Formation: What's Actually Free vs. What Costs Money
Searching for the cheapest LLC formation? Here's what's actually free, what always costs money, and where the hidden fees usually hide.
Updated 2026-08-15
Key Takeaways
- "Cheapest LLC formation" searches turn up a lot of $0 offers, but $0 refers only to the provider's service fee — the state filing fee is never optional, no matter who files for you.
- Every LLC owner pays the same unavoidable costs: the state filing fee, some form of registered agent coverage, and (in most states) periodic report filings.
- "Free" or "$0" formation services commonly turn into $200–$400+ once required add-ons like registered agent renewal, EIN filing, and an operating agreement are included.
- CompanySage's Starter package is a flat $99 plus state fees, with formation filing, an operating agreement, and a bank-account resolution included rather than sold separately.
- The real question isn't "what's free" — it's which extras you'd end up paying for anyway, and whether the provider tells you that before or after checkout.
What 'Free LLC Formation' Actually Means
When you search for the cheapest LLC formation, most results are $0 formation offers from providers like ZenBusiness, Bizee, and LegalZoom. Those offers are real, but the $0 only ever covers the provider's own service fee for preparing your paperwork. It does not cover the fee your state charges to actually file an LLC, which every filer pays regardless of who does the paperwork.
Bizee (formerly Incfile), for example, advertises free LLC formation where "you only pay state fees," but leans on add-on sales for essentials like EIN registration and operating agreements. LegalZoom similarly lists a $0 starting tier alongside paid Pro and Premium plans. Both describe the cheapest possible entry point, not the total cost of a compliant LLC.
State filing fees themselves vary widely — commonly landing somewhere in the roughly $35 to $500 range depending on the state and entity type — so "free" formation still means a real, mandatory charge before your LLC exists at all.
What You'll Always Pay, No Matter Who You Use
Three costs apply to every LLC, whether you file it yourself, use a $0 service, or use a flat-fee provider like CompanySage:
- The state filing fee. Paid directly to your state's filing authority to create the LLC. No provider can waive it or absorb it into a "free" plan — it's a pass-through cost.
- Some form of registered agent coverage. Most states require an LLC to keep a registered agent on file at all times, not just at formation. You can serve as your own agent for $0, or pay a provider. See our registered agent guide for what that decision typically costs.
- Ongoing state compliance. Most states require some kind of periodic report or renewal filing to keep an LLC in good standing, generally with its own state fee. Amounts and frequency vary by state.
The state fee is the one number nobody can discount
What's Actually Optional
Once the unavoidable costs are covered, everything else is a choice — though $0 formation services are built around turning as many of these into paid add-ons as possible:
- Expedited or rush filing. Many providers charge extra for faster processing. One internal comparison put typical rush fees at roughly $50 to $170. CompanySage includes 24-hour filing at no extra cost, rather than as a paid upgrade.
- EIN filing. An EIN is always free directly from the IRS — the fee only exists if you pay someone else to submit it for you. See how to get an EIN for the DIY steps.
- Operating agreement. Draft your own for $0, at the cost of your time and legal risk, or pay for a template or attorney-drafted version.
- Registered agent, past year one. Some $0 services bundle a free first year, then renew at their standard rate — worth checking before you sign up, not after the charge appears.
- Privacy and convenience extras. Anonymous filing, expedited bank-account setup, and additional entity filings are typically paid add-ons anywhere you go.
DIY vs. '$0' Formation Services vs. CompanySage: The Real Cost
Here's how the three most common paths compare once you look past the headline number:
| Cost item | DIY | $0 formation services | CompanySage |
|---|---|---|---|
| State filing fee | Paid directly to the state — unavoidable | Paid directly to the state — unavoidable | Paid directly to the state — unavoidable |
| Formation service fee | $0, but you take on all the paperwork and error risk yourself | Advertised as $0; the business model depends on add-on sales | Flat $99 for the Starter package, published upfront |
| Operating agreement | $0 if self-drafted (own legal risk) | Often sold separately; exact price not published in sources reviewed | Included with the Starter formation package |
| Registered agent, year one | $0 if you act as your own agent | Often bundled for the first year, then renews at the provider's standard rate | Not part of the formation package; bundled into CompanySage's Compliance plan starting at $14.99/month |
| EIN | $0, applied for directly with the IRS | Commonly sold as a paid add-on | Included with Professional and Professional Plus formation plans; not part of Starter |
| Expedited/rush filing | Not applicable | Often an extra $50–$170 for faster processing | 24-hour filing included at no extra cost |
| Ongoing compliance support | $0, but every deadline is on you to track | Varies by provider, typically a separate subscription | Compliance plans start at $14.99/month (registered agent, annual report filing, mail scans) |
The DIY column is cheapest in pure dollars if nothing goes wrong, but it assumes you're comfortable tracking every filing and renewal yourself. The $0 formation-service column is usually the least predictable, since the final cost depends on which add-ons you end up needing. Compare the full breakdown on our pricing page against whatever quote a $0 provider gives you.
So, What's the Cheapest LLC Formation Option?
There's no single answer for every founder, but the honest version is this: DIY filing is cheapest in raw dollars if you're willing to do the paperwork and track compliance yourself. A $0 formation service is rarely the cheapest once you add what most new LLCs actually need — it's just the option with the most add-ons hidden past the first page. A flat, transparent package tends to win on total cost and predictability, because there's nothing left to discover at checkout.
CompanySage's Starter formation is $99 plus state fees, with no hidden charges layered on afterward. See the full breakdown on our pricing page, compare it directly against other providers on our best LLC formation service guide, or start with our guide to forming an LLC if you haven't filed yet.
Frequently Asked Questions
Is there really a way to form an LLC for free?
Not entirely. Every state charges a mandatory filing fee to create an LLC, and that fee applies no matter who files your paperwork — you, a $0 formation service, or CompanySage. When a provider advertises "free" or "$0" LLC formation, they mean their own service fee is waived, not that the state fee disappears.
Why do some providers advertise $0 LLC formation?
It's a pricing strategy built around add-ons. A $0 headline price gets a business owner in the door, then the provider earns revenue from optional extras like registered agent renewals, EIN filing, operating agreement templates, and expedited processing. Those "free" plans commonly turn into $200 to $400 or more once the essentials most new LLCs need are added.
What's the actual cheapest way to form an LLC?
It depends what you value. Filing yourself directly with the state is cheapest in cash terms, since you only pay the mandatory state fee, but it costs your own time and carries more risk of a rejected filing. A $0 formation service often ends up costing as much as a flat-fee provider once required add-ons are included, just less transparently. A flat, itemized package like CompanySage's Starter formation tends to be cheapest once you count everything you actually need.
Do I have to pay for a registered agent?
Not necessarily. Most states allow you to serve as your own registered agent for $0, as long as you have a physical address in the state and can be available during business hours. Professional registered agent services typically cost around $50 to a few hundred dollars a year, or you can get one bundled into a compliance subscription. See our registered agent guide for the full breakdown.
Does CompanySage have hidden fees?
No. CompanySage discloses applicable state fees upfront and doesn't add surprise charges after you've started. The Starter formation package is a flat $99 plus state fees, and what's included in each package or plan is listed on our pricing page rather than surfaced piecemeal at checkout.
Is getting an EIN free?
Yes. The IRS does not charge a fee to issue an EIN, no matter which method you use to apply. If a formation service charges you for an EIN, you're paying for someone to prepare and submit the application on your behalf, not for the number itself.
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