While a service automates state filings and document preparation, it does not replace statutory obligations or federal requirements. You must form the entity with the state before applying for an Employer Identification Number (EIN) with the federal government. An EIN is $0 (free) directly from the IRS through its online portal, so you should never pay a third party for an EIN. Additionally, under federal rules effective August 14, 2026, entities created in the United States are exempt from Beneficial Ownership Information (BOI) reporting to FinCEN. Consequently, neither you nor a filing service needs to complete federal BOI reports for domestic entities. Using a service saves administrative time and maintains personal address privacy, but filing directly through state government web portals produces the identical legal entity without third-party markups.
- EIN cost requirement: An EIN is $0 (free) directly from the IRS on Form SS-4 or via the IRS website, and you should never pay a third party for an EIN.
- Filing order rule: State regulations and IRS rules require that you form the entity with the state before applying for an EIN.
- BOI exemption rule: Under federal rules effective August 14, 2026, entities created in the United States are exempt from Beneficial Ownership Information reporting to FinCEN.
- ZenBusiness fee structure: ZenBusiness charges $0 plus state fees for its Starter package, while registered agent coverage is a separate $199 per year fee across all tiers, discounted to $99 for the first year when forming with them.
The comparison table below details business formation options, costs, and official filing requirements (listed alphabetically, not ranked).
| Provider / Method | Initial Formation Fee | Registered Agent Fee | EIN Fee | Primary Scope & Official Source |
|---|---|---|---|---|
| Bizee | $0 plus state fee (as of 2026) | Included 1st yr, then $119/yr (as of 2026) | $0 directly from IRS or paid add-on | Prepares and submits state LLC registration documents. Official source: Secretary of State fee schedule. |
| DIY State Direct | $0 provider fee (only state filing fee) | $0 if acting as own agent | $0 (free) directly from IRS | Files Articles of Organization directly with state registry. Official source: Secretary of State business portal. |
| LegalZoom | $0 plus state fee (as of 2026) | $249/yr (as of 2026) | $0 directly from IRS or paid add-on | Submits state entity filings and acts as statutory agent. Official source: Secretary of State fee schedule. |
| Northwest Registered Agent | $39 plus state fee (as of 2026) | $125/yr (as of 2026) | $0 directly from IRS or paid add-on | Handles state registration and provides physical agent address. Official source: Secretary of State fee schedule. |
| Rocket Lawyer | $99.99 plus state fee or membership (as of 2026) | $249.99/yr (as of 2026) | $0 directly from IRS or paid add-on | Provides legal forms and entity registration services. Official source: Secretary of State fee schedule. |
| Tailor Brands | $0 plus state fee (as of 2026) | $199/yr (as of 2026) | $0 directly from IRS or paid add-on | Forms state business entity alongside branding utilities. Official source: Secretary of State fee schedule. |
| ZenBusiness | $0 plus state fee (Starter tier) | $199/yr ($99 1st yr when forming) | $0 directly from IRS or paid add-on | Files state paperwork and supplies operating agreement templates. Official source: IRS and state registries. |
What a Formation Service Handles vs. Doing It Yourself
Choosing between using a commercial service or filing independently comes down to balancing administrative convenience against direct cost. Guidelines published by the U.S. Small Business Administration specify the core steps needed to establish a business structure, including selecting an entity type, registering with state authorities, and appointing a registered agent.
When you handle the process yourself, you access your state filing website directly, complete the Articles of Organization, and pay the state filing fee. You also designate your registered agent and draft your own internal operating agreement.
When you hire a formation service, the platform takes over these specific administrative tasks:
- State document filing: The service gathers your company details, formats official paperwork according to state specifications, and submits the Articles of Organization directly to the Secretary of State.
- Registered agent service: State statutes mandate that every LLC maintain a registered agent with a physical street address in the state to receive legal notices and service of process. Commercial services serve as your agent, allowing you to list their commercial address and keep your personal street address off public state databases.
- Operating agreement templates: Most services supply customizable templates to outline ownership percentages, voting rights, and operational rules among LLC members.
- Compliance tracking: Services store approved formation documents online and issue automated notifications for upcoming state annual report filings.
Federal Tax Registration and Reporting Rules
A common point of confusion for business founders is whether a service is necessary for federal registrations or regulatory filings. These steps occur at the federal level and are simple for business owners to complete directly.
First, state registration precedes federal tax registration. You must form the entity with the state before applying for an EIN. The IRS requires a confirmed state business name before issuing a tax identifier. Obtaining an Employer Identification Number is $0 (free) directly from the IRS through its official online application system, which issues your tax ID immediately upon completion. You should never pay a third party for an EIN, as paid services merely fill out the exact same free IRS form on your behalf.
Second, federal reporting rules changed in 2026. Under the rule effective August 14, 2026, entities created in the United States are exempt from Beneficial Ownership Information reporting to FinCEN. Domestic LLCs do not need to file BOI reports with the federal government. Similarly, state-level privacy legislation such as New York's Transparency Act applies strictly to LLCs formed under the law of a foreign country, relieving domestic entities of this requirement. Consequently, paid third-party BOI filing add-ons provide no benefit for domestic formations.
Comparing the Approaches: Situational Recommendations
Deciding whether to file independently or use a service depends on your budget, address privacy needs, and business structure.
When doing it yourself is the better choice:
If you are forming a simple single-member LLC in your home state and do not mind having your personal address listed on public government registries, direct filing is the most cost-effective path. You pay only the mandatory state filing fee, eliminate provider markups, and maintain direct control over state records.
When using a formation service makes sense:
If you prefer address privacy, need registered agent representation in multiple states, or want automated compliance tracking, a formation service provides real value.
Among commercial providers, ZenBusiness is a practical choice for founders who want structured support. Their Starter tier is $0 plus state fees for basic state filing and operating agreement templates. For expanding businesses, their Pro tier is $199 per year and includes expedited processing and automated compliance monitoring, while Premium is $299 per year. However, registered agent coverage is a separate $199 per year service across all tiers, including Premium, discounted to $99 for the first year when you form your entity with them.
Other commercial formation services offer different pricing structures as of 2026. Bizee and Tailor Brands present $0 base packages plus state fees, while Northwest Registered Agent charges $39 plus state fees with an emphasis on privacy. LegalZoom provides a $0 base tier plus state fees with broad brand familiarity, and Rocket Lawyer offers entity formation as part of a $99.99 plus state fees model or monthly legal subscription.
Some links on this site earn a commission. This compensation never decides which route or provider a page recommends, as recommendations are strictly based on situational fit for the reader.
Frequently Asked Questions
How do I choose a business structure, register a business, select a registered agent, or choose a formation service?
Small Business Administration guidelines specify selecting an entity structure, registering with state filing offices, and naming a registered agent with a physical street address. A formation service acts as an administrative intermediary, completing state paperwork and providing a commercial agent address so your personal address remains off public records.
How do I apply for an EIN online after state business formation?
State and federal rules require that you form the entity with the state before applying for an EIN. Once your state registration is approved, apply directly through the IRS online portal. An EIN is $0 (free) directly from the IRS, takes minutes to obtain, and requires no third-party assistance. You should never pay a third party for an EIN.
What are the Beneficial Ownership Information reporting rules for companies in 2026?
Under the rule effective August 14, 2026, entities created in the United States are exempt from Beneficial Ownership Information reporting to FinCEN. State reporting rules such as New York's Transparency Act apply only to foreign-formed entities, meaning domestic U.S. LLCs do not need to file BOI reports.
Sources
- Internal Revenue Service, “Get an employer identification number”
- Financial Crimes Enforcement Network, “Beneficial Ownership Information Reporting”
This page provides general information rather than legal advice; requirements vary by state and change over time.