How to Form an LLC: DIY vs Using a Service

Last updated: April 2026

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Forming an LLC is one of those tasks that looks intimidating until you’ve done it once. The actual paperwork is shorter than most apartment leases. The choice you actually have to make isn’t “how do I form an LLC” — it’s “do I file the paperwork myself or pay a service to do it for me.”

This guide breaks down both paths, the real costs, what each one actually includes, and the one step almost every DIY filer skips that can cause real problems later. This is informational only, laws vary by state, and you should consult a qualified attorney for advice on your specific situation.

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What Forming an LLC Actually Involves

Before deciding between DIY and a service, it helps to know what the work actually consists of. Forming an LLC in any U.S. state generally requires the following steps:

1. Choose a name that meets your state’s naming rules and isn’t already taken.
2. Designate a registered agent — a person or service with a physical address in your state who can receive legal documents on behalf of the LLC.
3. File Articles of Organization (sometimes called a Certificate of Formation) with your Secretary of State. This is the document that legally creates the LLC.
4. Pay the state filing fee, which varies widely by state.
5. Create an operating agreement that governs how the LLC is run. Some states require this; many don’t, but every LLC should have one.
6. Get an EIN (Employer Identification Number) from the IRS. This is free and takes about ten minutes online.
7. Open a business bank account using the EIN and Articles of Organization.
8. File any required state or local licenses or permits for your industry.

That’s the full list. None of it is conceptually difficult. The question is whether you want to do it yourself or pay someone to handle steps 2 through 4 for you.

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The DIY Path: Filing Directly with Your State

Filing yourself means going directly to your state’s Secretary of State website, filling out the Articles of Organization, paying the state fee, and submitting. Most states now offer online filing that takes about 30 minutes once you have the information ready.

What DIY filing typically includes:

• Articles of Organization filed directly with the state
• State filing fee (this is the only required cost)
• Whatever turnaround time your state offers (often a few business days for online filing, longer for mail)

What you’ll need to handle yourself:

• Choosing a registered agent (you can serve as your own in most states if you have a physical address there)
• Drafting an operating agreement
• Getting an EIN from the IRS
• Opening a business bank account
• Researching any state-specific compliance requirements

State filing fees vary widely. As of recent data, fees range from around $35 in some states to $500 in Massachusetts. Always check your specific state’s current fee before filing, as these change.

DIY is a good fit when:

• You’re forming a simple single-member LLC
• You’re filing in your home state
• You can serve as your own registered agent
• You’re comfortable reading a state form and answering basic questions
• You want to keep startup costs as low as possible

DIY may not be the right fit when:

• You’re forming in a state where you don’t live (you’ll need a registered agent service)
• You have multiple members and complex ownership structures
• You’re forming in a state with unusually complex requirements (California’s franchise tax setup, for example)
• You don’t want to spend the time learning the process

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The Service Path: Using a Formation Company

Formation services file the paperwork on your behalf. The major players are LegalZoom, ZenBusiness, Northwest Registered Agent, Bizee (formerly Incfile), and Rocket Lawyer. Each offers similar core services with different pricing structures and add-ons.

What a typical formation service includes:

• Articles of Organization prepared and filed for you
• Name availability check
• Registered agent service (often free for the first year, then a recurring fee)
• Basic operating agreement template (varies by service)
• EIN application (sometimes included, sometimes an upsell)
• Compliance reminders for annual filings

Service pricing typically falls into three tiers:

• Free tier (plus state fees). Several services offer “free” LLC formation where you only pay state fees. The catch is usually that registered agent service becomes a paid subscription after the first year.
• Mid-tier ($150 to $300 plus state fees). Includes operating agreement, EIN, and faster filing.
• Premium tier ($300+ plus state fees). Adds attorney consultations, expedited processing, compliance services.

Services are a good fit when:

• You’re forming in a state where you don’t have a physical address (you need a registered agent anyway)
• You want a single workflow for filing, registered agent, and operating agreement
• Your time is worth more than the service fee
• You want compliance reminders for annual reports and filings
• You’re forming multiple LLCs and want a consistent process

For LLC formation specifically, LegalZoom is the most established option, with the longest track record on filings. Our full breakdown of LegalZoom against its competitors is in LawDepot vs LegalZoom vs Rocket Lawyer: Which Is Best for Small Business Owners?

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DIY vs Service: Side-by-Side Comparison

Factor	DIY Filing	Formation Service
Cost	State fee only	State fee + $0 to $300+ service fee
Time required	30 to 60 minutes of your time	10 to 15 minutes of your time
Registered agent	You designate (yourself or a separate service)	Often included, then becomes a recurring fee
Operating agreement	You handle separately	Basic template often included
EIN	You file with IRS (free, 10 minutes)	May be included or upsold
Compliance reminders	You track yourself	Often included
Best for	Cost-conscious, simple LLCs in your home state	Convenience, multi-state filing, complex setups

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The Step Most DIY Filers Skip: The Operating Agreement

Here’s where DIY filers most often go wrong. Filing the Articles of Organization legally creates the LLC. But the Articles are a short, public document that doesn’t say anything about how the business is actually run.

The operating agreement is the internal document that governs:

• Who owns the LLC and in what percentages
• How profits and losses are distributed
• Who has authority to make decisions
• What happens if a member wants to leave or sell their interest
• How the LLC can be dissolved
• How disputes are resolved

Most states don’t legally require an operating agreement. That’s why DIY filers often skip it. But every LLC should have one, for several reasons:

• It reinforces the liability shield. Without an operating agreement, courts in some jurisdictions are more likely to find that an LLC isn’t being treated as a separate entity. This can weaken the personal liability protection that’s the whole point of forming an LLC.
• It prevents disputes. Multi-member LLCs without operating agreements often end up in conflict over decisions the agreement should have addressed.
• It’s required by banks and investors. Most banks ask for an operating agreement when opening a business account. Investors and lenders almost always require one.
• It overrides default state rules. Without an operating agreement, your LLC is governed by your state’s default LLC statutes, which may not match how you actually want the business to run.

For single-member LLCs, the operating agreement can be straightforward. For multi-member LLCs, it should be more detailed. Either way, a template-based operating agreement from a reputable service is generally sufficient for routine setups.

Get an Operating Agreement Template

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The Hybrid Approach (What We Recommend for Most Small Business Owners)

For most small business owners forming a simple LLC in their home state, the lowest-friction path isn’t pure DIY or a full-service formation package. It’s a hybrid:

1. File the Articles of Organization yourself directly with your Secretary of State. You save the service fee and the process is straightforward in most states.
2. Serve as your own registered agent if you have a physical address in your state and don’t mind your address being on the public record.
3. Get your EIN directly from the IRS at IRS.gov. It’s free and takes about ten minutes.
4. Use a template service for the operating agreement, since this is the document most worth getting right and the easiest to draft from a guided questionnaire.
5. Open your business bank account with the Articles, EIN, and operating agreement in hand.

This approach typically costs only the state filing fee plus a small template fee for the operating agreement. It covers everything a simple LLC needs without paying for service tiers most filers don’t use.

The hybrid approach is not ideal when:

• You’re forming in a state where you don’t live (you need a registered agent service)
• You have a complex ownership structure
• You’re forming multiple LLCs and want to standardize
• Your time is worth more than the cost of a full-service package

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Common Scenarios: Which Path Is Right for You?

Your Situation	Recommendation
“I’m a single-member LLC, forming in my home state, want to save money.”	Hybrid approach. File DIY, use a template for the operating agreement.
“I want the whole thing handled in one workflow.”	Formation service. LegalZoom or a comparable provider.
“I’m forming in Delaware (or another state I don’t live in).”	Formation service. You need a registered agent regardless, and bundling makes sense.
“I have multiple members with different ownership percentages.”	DIY filing is fine, but invest more in the operating agreement. Consider an attorney review.
“I’m hiring 1099 contractors for the new LLC.”	See our guide to hiring 1099 contractors for the full process.
“I’m raising money or expecting investors.”	Hire an attorney. The operating agreement and ownership structure will be scrutinized.
“I’m forming in California.”	DIY is doable, but research the franchise tax requirements carefully. A service can simplify this.

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Mistakes to Avoid When Forming an LLC

Skipping the operating agreement. Already covered above. This is the single most common DIY mistake.

Mixing personal and business finances. Forming an LLC creates a legal separation between you and the business. If you keep using your personal account for business expenses, you can lose the liability protection in some jurisdictions. Open a separate business account immediately.

Forgetting annual filings. Most states require annual reports and franchise tax payments. Miss them and your LLC can fall out of good standing. Set calendar reminders or use a service that includes compliance tracking.

Forming in a state where you don’t operate. Many people hear “form in Delaware” or “form in Wyoming” and assume that’s the move. For most small businesses, forming in your home state is simpler and cheaper. The Delaware advantage mostly applies to companies raising venture capital.

Using your home address as the registered agent address. If you serve as your own registered agent, your home address becomes part of the public record. For some business owners, that’s fine. For others, it’s a privacy issue worth paying for a registered agent service to solve.

Underestimating the importance of the LLC name. The name has to be unique in your state, follow naming conventions, and not infringe on existing trademarks. Search the state database and the USPTO before settling on a name.

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Frequently Asked Questions

How much does it cost to form an LLC?

The state filing fee is the only required cost, and it varies widely by state, generally from around $35 to $500. Formation services add anywhere from $0 to $300+ on top of the state fee. Always check your specific state’s current fee before filing.

How long does it take to form an LLC?

Online filings in most states are processed within a few business days. Some states offer same-day or expedited processing for an extra fee. Mail filings can take several weeks.

Do I need an attorney to form an LLC?

For simple single-member LLCs in straightforward situations, generally no. Templates and state filing systems are designed for non-attorneys. For complex ownership structures, multi-state operations, or LLCs raising outside capital, hiring an attorney is typically worth the cost.

Can I form an LLC in a different state than I live in?

Yes, but it’s usually not the right choice for most small businesses. If you operate in your home state, you’ll generally have to register the out-of-state LLC as a “foreign LLC” in your home state anyway, which means paying fees in both states. The Delaware/Wyoming/Nevada strategies most often benefit larger companies or specific tax situations.

Do I need an operating agreement if I’m a single-member LLC?

Most states don’t legally require it, but it’s still recommended. It reinforces the legal separation between you and the business, and many banks require one to open a business account.

Can I be my own registered agent?

In most states, yes, as long as you have a physical address in the state and are available during business hours. The trade-off is that your address becomes part of the public record.

What’s the difference between an LLC and a sole proprietorship?

A sole proprietorship is the default when you start a business as an individual without filing anything. There’s no legal separation between you and the business. An LLC creates a separate legal entity, which generally protects your personal assets from business liabilities.

Do I need a business bank account for my LLC?

Functionally, yes. Mixing personal and business finances can undermine the liability protection an LLC provides. Most banks open a business account easily once you have your Articles of Organization, EIN, and operating agreement.

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The Bottom Line

Forming an LLC is more accessible than most people assume. For a simple single-member LLC in your home state, filing directly with your Secretary of State takes under an hour and costs only the state filing fee. Pair that with a template-based operating agreement, and you’ve covered the work most formation services charge $200+ for.

Use a formation service when convenience is worth the cost, when you’re filing in a state where you don’t live, or when you want compliance reminders bundled in. Hire an attorney when the stakes go up: complex ownership, outside capital, or industry-specific compliance.

This article is informational only. Laws vary by state, and you should consult a qualified attorney for advice on your specific situation.

Get an Operating Agreement Template

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Last updated on April 28, 2026