How to Form an LLC for FREE and Save at least $1,460 on Legal Fees

Interested in starting your own business?

The best practice is to first set up an entity that protects you from unlimited personal liability, while maximizing tax benefits. LLC is an ideal option for this purpose, but too many business founders end up spending too much upfront for legal fees.

You can save minimum $1,460 on legal fees and form an LLC for $0 or as low as $19.99 (+ state filing fees) by filing the registration yourself.

This is the fastest and simplest way to set up your LLC.

Why set up an LLC?

Setting up a Limited Liability Company (LLC) provides key benefits, including limited liability, where owners (members) are generally not personally responsible for business debts and liabilities. It also offers flexibility in management and taxation, allowing members to choose between being taxed as a sole proprietorship, partnership, or corporation. Additionally, LLCs have fewer compliance requirements compared to corporations, and they enhance credibility with customers, suppliers, and potential investors.

In short, LLCs provide: 

Limited Liability
LLC owners are generally not personally responsible for business debts and liabilities

Flexible management structure
LLC owners have more freedom to decide how the business is run and managed.

More taxation options
An LLC has flexibility in how it is taxed to help maximize savings.

Minimal record-keeping
An LLC does not need to record minutes or hold an annual shareholder meeting.

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How Easy is it to Form an LLC?

It’s super easy.

You may be a little intimidated by the idea of forming a legal entity like an LLC, especially if it's your first time. All you need is an understanding of what your business will do, how you plan to run it, and your state's LLC filing fees. Even if your business requires a retail location, you don't need a physical address lined up to begin your LLC formation.

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What are the Requirements?

To set up an LLC in the U.S., you typically need to follow these steps:

1. Choose a Name: The name must be unique within your state and comply with state-specific rules, usually including “LLC” in the name.
2. File Articles of Organization: This document, sometimes called a Certificate of Formation, must be filed with your state’s business registration office (usually the Secretary of State). It includes basic information about your LLC, such as name, address, and the names of members.
3. Appoint a Registered Agent: A registered agent is required to receive legal documents on behalf of the LLC. This can be an individual or a service.
4. Create an Operating Agreement: Though not always legally required, this internal document outlines the ownership structure and operating procedures of the LLC.
5. Obtain an EIN: An Employer Identification Number (EIN) from the IRS is needed for tax purposes and to open a business bank account.
6. Comply with State and Local Requirements: This may include obtaining necessary business licenses, permits, and adhering to any publication requirements.
7. Pay State Fees: Initial filing fees and, in some states, annual fees or franchise taxes are required to keep the LLC in good standing.

These requirements can vary slightly by state, so it’s important to check your specific state’s regulations.

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But It’s Still Complicated

Rocket Lawyer and LegalZoom are two popular online legal services that offer assistance with business formation and other legal matters.

Here's a comparison of the key aspects of both services:

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Services Offered

Both Rocket Lawyer and LegalZoom provide extensive DIY business legal solutions, including:

• Registering your business: LLC formation
• Running your business:  Registered agent services, annual report, business licenses, etc.
• Protecting your business: IP registration

LegalZoom offers more robust intellectual property services, including trademark and copyright registration and patent applications.

Rocket Lawyer has a slight edge in the quantity of overall services offered.

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Easy Steps

Both services are extremely easy to use.

• Rocket Lawyer uses a step-by-step click-and-select system.
• LegalZoom employs a simple page-by-page system for filing.

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Isn’t it Fake?

Over 3 million companies got started with Rocket Lawyer. Today about 1 in 9 American adults use Rocket Lawyer.

LegalZoom has launched over 4 million businesses since its founding.

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Can I talk to someone If I get stuck?

Rocket Lawyer offers email, chat, and phone support Monday-Friday, 6 am - 6 pm PT.

LegalZoom offers help via email and chat too. Pro and Premium users can get help via phone, email, and chat with extended hours including weekends.

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Pricing

Rocket Lawyer uses a subscription-based model. Rocket Legal+ is only $19.99 per month for full access to a wide range of legal services, including LLC formation. Non-members can purchase services à la carte. There's a 7-day free trial available.

LegalZoom offers multiple business formation plans starting at $0 (plus state filing fees) for basic LLC formation. Prices vary depending on the type of business and desired turnaround time. Additional services are purchased separately.

Summary

1. Rocket Lawyer

Pros:

• All documents created are available immediately
• Uses SSL for secure data transfer
• Legal documents tailored to your state and situation
• Can cancel membership at any time
• Live chat customer support available on website
• Mobile app for iOS and Android
• Blog resources and COVID-19 legal center
• Affordable monthly subscription option ($19.99/month)

Cons:

• Only one membership option
• Non-member prices can be expensive
• Limited control over lawyer assignment
• Email support can be slow (a few business days)
• Inconsistent quality of customer service
• Cancellation process after free trial is not straightforward

2. LegalZoom

Pros:

• No monthly membership required
• COVID-19 legal help available
• Free newsletter with legal tips
• Generally positive reviews of customer service
• Lower prices for individual services
• Mobile app for iOS and Android
• 60-day satisfaction guarantee

Cons:

• Pricing can be confusing with multiple package options
• Legal advice requires separate subscription plans
• No all-inclusive membership option
• Limited customization of legal documents
• Some services have long turnaround times

The best choice depends on your specific needs. Rocket Lawyer may be better for ongoing legal support with its subscription model, while LegalZoom could be more cost-effective for one-time services.

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Verdict

Rocket Lawyer has an edge in terms of quantity of services and user ratings. If you need 24/7 access to legal resources and DIY tools, Rocket Lawyer offers reasonable subscription option that could save you much more over the long term.

LegalZoom may be more cost-effective for one-time services. LegalZoom offers different pricing for different documents and projects. If you know what you're doing, you could save more by paying only for what you need.

Regardless, both Rocket Lawyer and LegalZoom will save you at least $1,000+ dollars in legal fees each time you use their services.

Explore both and decide based on your specific business needs and budget.

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