Cheapest Way to Form an LLC in 2026 (Honest Total-Cost Breakdown)
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Last updated: June 2026 | By LLCVerdict Editorial
The cheapest way to form an LLC is to file directly with your state — you pay only the state fee (typically $50–200) and nothing else. If you want a formation service to handle the paperwork, ZenBusiness and Bizee both offer $0 formation plans where you pay only the mandatory state filing fee.
But “free” is only the beginning. The honest cheapest path depends on what you need after the filing — and the registered agent auto-renewal traps baked into the free plans can cost you $119–199/yr starting in year 2.
Here’s the full picture.
The Actual Cheapest Options, Ranked
| Method | Year 1 Cost | Year 2 Cost | Catch? |
|---|---|---|---|
| DIY (direct state filing) | State fee only (~$50–200) | State fee (annual report) | You handle everything yourself |
| ZenBusiness Starter | $0 + state fee | RA renewal + Worry-Free if enrolled | Opt out of Worry-Free at checkout |
| Bizee Basic | $0 + state fee | $119/yr RA auto-renew | F BBB; year 2 surprise if you don’t cancel |
| Northwest $39 | $39 + state fee | $125/yr RA | Cleanest upsell-free option; RA priced transparently |
| LegalZoom Starter | $0 + state fee | RA renewal | Watch subscription enrollment; 1,469 BBB complaints |
Option 1: File Directly With Your State (The Absolute Cheapest)
If your goal is to pay as little as possible, file your LLC yourself through your state’s secretary of state website. You will:
- Choose your LLC name (check availability on the state’s business search portal — free)
- Complete the Articles of Organization form (available on your state’s SOS website — free)
- Pay the state filing fee
- Designate a registered agent (can be yourself in most states)
- Create an operating agreement (not required in most states, but strongly recommended — templates are free online)
State filing fees by state (select examples):
– Kentucky: $40
– Iowa: $50
– Colorado: $50
– Wyoming: $100
– Delaware: $90
– California: $70 + mandatory $800 franchise tax in year 1 (not optional — see caveat below)
– New York: $200 + mandatory publication requirement ($300–1,750 extra — see caveat below)
When DIY makes sense: You’re comfortable reading government forms, you understand what a registered agent is, and you’re filing in a state where you live and have a physical address (so you can be your own RA).
When DIY doesn’t make sense: You want confirmation emails, document storage, an operating agreement template, or an EIN filing service. That’s where $0–$39 formation services add value.
Option 2: ZenBusiness Starter — Best $0 Formation Service
ZenBusiness’s Starter plan charges $0 + your state fee and includes:
– Articles of Organization filing
– One year of registered agent service
– Worry-Free Guarantee (note: the paid Compliance add-on is separate)
– Online dashboard with document storage
Verdict Score: 8.0/10 — genuinely good, with one caveat you need to manage.
The Worry-Free Compliance Add-On: At checkout, ZenBusiness presents “Worry-Free Compliance,” which handles annual report filing. It auto-renews at approximately $199/yr. The checkbox may be pre-selected. If you don’t need ZenBusiness to file your annual report — or if you want to do it yourself — uncheck this at checkout.
Year 2 costs: RA service renewal (check current pricing at ZenBusiness.com) + Worry-Free if you didn’t opt out.
ZenBusiness has 4.8 stars from 26,000+ Trustpilot reviews and an A+ BBB rating. Their dashboard is the best-designed of any LLC service we’ve tested. For a $0 entry price, you’re getting genuine value.
CTA: Start Free with ZenBusiness →
Option 3: Bizee (formerly Incfile) — Free, But Read the Fine Print
Bizee also starts at $0 + state fee and includes registered agent service for year 1.
The auto-renewal trap: Bizee’s RA service auto-renews at $119/yr starting year 2. This is disclosed, but it’s easy to miss if you’re not actively reading confirmation emails.
BBB rating: F. Bizee’s F rating from the Better Business Bureau reflects a pattern of unresolved complaints — not every customer has a problem, but the pattern is real and documented. Their Trustpilot is 4.7 stars from 25,000+ reviews, which reflects genuine customer satisfaction from many users. Both data points are true simultaneously.
Our honest take: Bizee can work if you know going in that you’ll need to cancel or switch RA providers before year 2 renewal. Set a calendar reminder for 11 months after your formation date. If you forget, you’ve paid $119 for a service from an F-rated company.
For the same amount of certainty with better long-term value, Northwest’s $39 + $125/yr RA is harder to abuse.
Option 4: Northwest Registered Agent ($39) — Cheapest Genuinely Clean Option
Northwest charges $39 + state fee for LLC formation and $125/yr for registered agent service. Their pricing is fully transparent — no buried auto-renewals, no Worry-Free checkboxes, no subscription enrollment.
Verdict Score: 9.2/10
Is $39 formation “cheap”? Yes. Is $164 ($39 + $125 RA) in year 1 “cheap”? Compared to ZenBusiness’s true year-2 cost with Worry-Free enrolled, it’s competitive. Compared to Bizee’s “free” formation with $119/yr RA on an F-BBB platform, it’s a better deal if you value predictability.
CTA: See Northwest’s $39 Plan →
The Upsell Decoder: What to Decline at Checkout
Every $0 formation service makes money by upselling add-ons. Here’s what each service pushes and whether any of it is worth buying.
ZenBusiness Checkout Upsells
Worry-Free Compliance (~$199/yr auto-renew): Handles your annual report filing. Useful if you genuinely don’t want to track annual report deadlines yourself. Not useful if you’re willing to spend 10 minutes per year filing it yourself. Pre-checked in some flows — uncheck if you don’t want it.
EIN filing ($50–75): Skip this. Get your EIN for free in 5 minutes at IRS.gov. It’s the same application; ZenBusiness is just a middleman.
Operating Agreement (varies by plan): The free/paid tier difference. A free template from any LLC resource site works for single-member LLCs. If you have multiple members or a complex ownership structure, hire an attorney instead.
Business Bank Account via partner: Offered during onboarding. Not a ZenBusiness charge — an intro to a banking partner. Evaluate the bank independently.
Domain + website bundle: Optional and independent of the LLC. Decide based on your web needs, not formation momentum.
Bizee Checkout Upsells
EIN filing ($70): Same note as above — skip. IRS.gov is free.
Operating Agreement ($40): Get a free template.
Banking resolution ($25): Unnecessary for most LLCs.
Business bank account intro: Same as ZenBusiness — evaluate the bank independently.
Registered Agent (bundled free, then $119/yr): Already discussed. The main trap.
LegalZoom Checkout Upsells
LegalZoom’s upsell stack is the most extensive:
Legal plan subscription (~$17–39/mo): Provides attorney consultations and legal document templates. Has genuine value if you regularly need legal guidance and would otherwise pay $200–400/hr for an attorney. Has zero value if you need a one-time LLC and no ongoing legal services. Easy to accidentally enroll in.
Trademark registration: Real service, real cost ($199+). Only relevant if you have a brand name you’re actively protecting.
Business license research ($99–149): Tells you what licenses your business might need. This information is free from your state, county, and city websites — or you can ask a CPA/attorney.
Registered Agent ($299+/yr): LegalZoom’s RA rate is on the higher end. Northwest at $125/yr is more competitive for equivalent service.
Total checkout if you accept everything: $1,500+ above the base formation cost. Each item is optional.
The LegalZoom rule: Go to checkout knowing exactly what you need. Uncheck everything. Add back only the specific items that match a need you’ve identified independently.
State Fees: The Cost You Can’t Avoid
Regardless of which service you use, you always pay your state’s filing fee. This is paid directly to the state — no LLC service keeps it. Here are common fees:
- Cheapest states: Kentucky $40, Iowa $50, Colorado $50, Mississippi $50
- Mid-range: Wyoming $100, Delaware $90, Florida $125
- Higher cost: Massachusetts $500, Tennessee $300, Illinois $150 (verify current rates — state fees change)
Two states with mandatory extra costs most people don’t know about:
New York: After forming your LLC, you must publish a notice of formation in two local newspapers for six consecutive weeks. Cost: $300–1,750 depending on where your principal office is. This is state law, not a service upsell. You cannot skip it.
California: All California LLCs owe an $800 minimum franchise tax annually, starting the year they’re formed. There’s no avoiding this — even if your LLC earns nothing in year 1.
If cost minimization is your primary goal, Delaware, Wyoming, and most Midwestern states are the cheapest formation environments. But if you live in California or New York and want to operate there, you’ll need to register as a foreign LLC in your home state anyway — which means paying both states.
The Registered Agent Cost Hiding in Your “Free” Formation
This is the single most important thing to understand about “$0 LLC formation.”
A registered agent is legally required for every LLC in every state. It must be a real person or company with a physical street address in your state, available during business hours. You can be your own RA (if you have an address in that state and can always be there 9–5 weekdays), or you pay a commercial RA service.
The “$0 formation” model works like this:
- The service charges $0 for paperwork
- They include “free” registered agent service for year 1 as part of the deal
- You forget about the RA after you get your LLC approved
- Year 2 arrives. The RA auto-renews. Your credit card is charged $119–179.
This isn’t a scam — it’s disclosed — but it’s also not surprising that it’s the most common complaint in LLC formation reviews. “I didn’t know I was paying for that” is how it reads on Trustpilot and Reddit.
The Bizee auto-renewal: $119/yr starting year 2. Bizee has an F BBB rating. If you miss the renewal window, you’re paying $119 to an F-rated company you can’t easily cancel. The Trustpilot score of 4.7 reflects many satisfied customers — the BBB complaints reflect the ones who didn’t catch the renewal.
The Inc Authority auto-renewal: $179/yr starting year 2. Same F BBB rating. Same pattern. The 4.9 Trustpilot score from 40,000+ reviews sounds like a ringing endorsement. The BBB tells a different story about complaint patterns and resolution.
The ZenBusiness Worry-Free trap: This is different from the RA itself — it’s an annual compliance add-on that auto-renews at approximately $199/yr. It’s opt-in, but pre-checked. Many users enroll without realizing it. Check your email confirmations if you’ve used ZenBusiness.
How to avoid all of it: Use Northwest. $39 formation + $125/yr RA. The price is transparent before you buy. There’s no year-2 surprise.
True Total Cost Comparison: Year 1 vs Year 2
Scenario: Forming in Iowa (state fee: $50)
| Service | Year 1 Total | Year 2 Total | 2-Year Running Total |
|---|---|---|---|
| DIY (you as own RA) | $50 | $50 (annual report) | $100 |
| ZenBusiness Starter (no Worry-Free) | $50 | $50 + RA renewal | ~$150+ |
| ZenBusiness + Worry-Free enrolled | $50 | $50 + ~$199 | ~$299+ |
| Bizee Basic | $50 | $50 + $119 RA | $219 |
| Northwest $39 | $89 | $50 + $125 RA | $264 |
Annual report fees vary by state — Iowa charges $60/yr; adjust for your state.
Best for zero-upfront formation: ZenBusiness → · Best for transparent all-in pricing: Northwest → · Best for recognized brand: LegalZoom →
The “free” services are cheapest in year 1. By year 2, ZenBusiness (no Worry-Free) and Northwest are within range of each other. By year 3, a transparent service like Northwest is often cheaper than a “free” service with $119–199 auto-renewals.
Most importantly: Northwest’s year 2 is predictable. Bizee’s year 2 requires you to act (cancel before auto-renew). That action-cost has a real dollar value.
For the complete multi-year analysis including all add-ons, see True Cost of an LLC →.
What You Actually Need vs What You’ll Be Sold
When you form an LLC, you need these things. Everything else is optional.
Required:
1. Articles of Organization — the formation document filed with your state. All services handle this.
2. Registered agent — every state requires one. Commercial RA typically costs $50–300/yr; DIY costs $0 if you qualify.
3. State filing fee — mandatory, paid to the state. Non-negotiable.
4. EIN (Employer Identification Number) — required for opening a business bank account, hiring employees, and filing taxes. Free from IRS.gov. Takes 5 minutes.
Strongly recommended (but free DIY options exist):
5. Operating agreement — internal document governing your LLC. Required in a few states; strongly recommended in all. Free templates are adequate for single-member LLCs.
6. Business bank account — legally not required, but functionally necessary to maintain your liability protection. Commingling funds is the #1 way to pierce your corporate veil. Most banks require your EIN + Articles of Organization + sometimes your Operating Agreement.
Optional (evaluate case by case):
7. Annual report filing service — you can file most annual reports yourself in 5–10 minutes for $0–60. Only pay a service if you genuinely won’t remember to do it.
8. Compliance calendar reminders — ZenBusiness’s dashboard does this well. Free for basic account holders.
9. Attorney consultations — genuinely useful for multi-member LLCs, complex ownership, or specific legal questions. LegalZoom’s legal plan is one option; an independent business attorney by the hour is often better value for specific needs.
Usually unnecessary:
– Trademark registration at formation (file when you have revenue and a brand to protect)
– Business license research (check your state/county/city government websites — free)
– Expedited state processing (unless you have a specific deadline — standard processing in most states is 3–10 days)
What’s Actually Included in “Free” Formation Plans
Not every $0 formation plan includes the same things. Here’s what to check:
| Feature | ZenBusiness | Bizee | Inc Authority |
|---|---|---|---|
| Articles of Organization filing | Yes | Yes | Yes |
| Registered agent (yr 1) | Yes | Yes | Yes |
| EIN filing | Add-on | Add-on | Add-on (or self) |
| Operating agreement | Paid tier | Add-on | Add-on |
| Bank account intro | Some plans | Yes | Yes |
| Annual report filing | Worry-Free add-on | Paid | Add-on |
What you never need to pay for:
– EIN (Employer Identification Number): Free directly from IRS.gov — apply online, takes 5 minutes, get your EIN immediately. Do not pay $50–100 for a service to do this.
– Operating agreement templates: Free templates are available online. A template is fine for a single-member LLC. If you have multiple members or a complex arrangement, use an attorney.
When “Cheap Now” Gets Expensive Later: The Full 3-Year Picture
Let’s map out what each common path actually costs if you stay with the same provider for three years.
Scenario: Iowa LLC, no Worry-Free, standard annual report filing yourself
| Path | Year 1 | Year 2 | Year 3 | 3-Year Total |
|---|---|---|---|---|
| DIY (state fee only, you as RA) | $50 | $110 ($50 state + $60 report) | $110 | $270 |
| ZenBusiness Starter (no Worry-Free) | $50 | $50 + RA renewal | $50 + RA renewal | Depends on RA renewal price |
| Bizee (RA cancel before yr 2) | $50 | $110 ($50 state + $60 report) | $110 | $270 |
| Bizee (keep RA yr 2 and 3) | $50 | $229 ($50 + $60 + $119) | $229 | $508 |
| Northwest $39 | $89 + $50 state = $139 | $50 + $60 + $125 = $235 | $235 | $609 |
Northwest is the most expensive total cost in this scenario — but every dollar is predictable, and the $125/yr RA is higher quality than Bizee’s $119/yr F-BBB equivalent.
The DIY path is the cheapest by far over 3 years — but it requires being your own RA (home address on public record, available 9–5 every weekday).
The honest takeaway: If you’re willing to be your own RA and file the annual report yourself, DIY is $270 over 3 years in Iowa. If you want the privacy and reliability of a commercial RA, Northwest’s $609 is the predictable premium version. The “free” formation services with bundled RA land in the middle — but only if you’re active about managing renewals and cancellations.
FAQ: Cheapest LLC Formation
What is the cheapest way to form an LLC?
Filing directly with your state’s secretary of state website is the absolute cheapest — you pay only the state filing fee (typically $40–200). If you want a service to handle the paperwork, ZenBusiness and Bizee both start at $0 + state fee.
Is there truly a free LLC formation service?
“Free” means the service charges $0 for their paperwork — you still pay your state’s mandatory filing fee. After year 1, registered agent service (required in every state) will add $50–200/yr. The formation can be free; the ongoing compliance cannot.
What’s the cheapest state to form an LLC in?
For pure filing-fee cost: Kentucky ($40), Iowa ($50), Colorado ($50), Mississippi ($50). Wyoming ($100) and Delaware ($90) are popular for favorable LLC laws but aren’t the cheapest. Avoid California (mandatory $800 franchise tax) and New York (mandatory $300–1,750 publication requirement) if cost is your primary concern.
Should I use Bizee’s free plan or pay Northwest $39?
If you’ll actively cancel the RA before year 2 auto-renew: Bizee saves money year 1. If you want simplicity and no BBB-concern risk: Northwest $39 + $125/yr RA is cleaner. Over 3 years with Bizee’s $119/yr RA (if you keep it), Northwest is cheaper.
Do I have to pay for a registered agent?
You must have a registered agent — but you can be your own if you have a physical street address in the state where your LLC is registered and are available there during business hours. DIY RA = $0/yr. The trade-off is your address appears on public records and you must be present at that address every weekday 9–5.
Can I form an LLC for under $100 total?
In some states, yes: ZenBusiness $0 formation + $40 Kentucky state fee = $40 in year 1. Or DIY + Iowa state fee = $50. Year 2 will add RA costs and annual report fees.
What’s the difference between formation cost and total LLC cost?
Formation cost is the one-time fee to create the LLC. Total ongoing cost includes: annual report fee (most states, $0–500/yr), registered agent ($0–300/yr if commercial), and any state franchise or privilege taxes. California’s $800/yr minimum franchise tax is the most common surprise.
Bottom Line: Genuinely Cheapest vs Cheapest Without Headaches
Genuinely cheapest (year 1 only): ZenBusiness $0 + state fee, or Bizee $0 + state fee. Both work. Opt out of Worry-Free (ZenBusiness) and set a cancellation reminder (Bizee).
Cheapest without headaches (2+ years): Northwest $39 + $125/yr RA. Transparent pricing, no auto-renewal traps, no F BBB rating.
If you’re very budget-limited and comfortable with DIY: File directly with your state. Pay the state fee. Be your own registered agent if you have a permanent address in that state. Get your EIN for free from IRS.gov. Download a free operating agreement template.
→ More resources: Best LLC Formation Services → | True Cost of an LLC → | Can I Be My Own Registered Agent? →
LLCVerdict is an independent review publication. We test services hands-on and earn affiliate commissions from some links — this never changes our rankings or what you pay. Full methodology →