Why do some providers advertise $0 formation?

Because the state fee is charged separately and the business model is the recurring registered agent renewal, plus upsells. Free formation is real in the sense that the filing service costs nothing; it is not free in the sense that the first year total is zero.

What is the single most useful question to ask?

What does this cost in year two with the registered agent included? Year one is competitive because it is what people compare. Year two is where the pricing differences are largest and least visible.

Are more expensive providers better?

Not inherently. Price correlates more with scope and marketing spend than with filing quality. What genuinely differs is non-resident support, whether federal filings are covered, and whether anyone helps when a filing is rejected.

Choosing a formation and compliance provider

Guide · 1 min read

Why formation prices vary so much

The advertised price is a marketing number. The comparison that matters is total cost over two years with everything you will actually need.

The short answer

Formation providers advertise different scopes at different prices, and a low headline figure usually excludes the registered agent after year one, the EIN for non-residents, and any federal filing. The meaningful comparison is total cost over two years including everything you will genuinely need.

What the headline usually excludes

Component	Often included?	Typical standalone cost
State filing fee	Usually charged separately	$50–$500, set by the state
Registered agent, year one	Often bundled	$50–$150
Registered agent, year two onward	Frequently not	$50–$300 at renewal
Operating agreement	Sometimes, as a template	$0–$300
EIN for owners with an SSN	Sometimes	Free from the IRS
EIN for owners without an SSN	Often an upsell	Varies widely
Annual report filing	Rarely	Fee plus service charge
Form 5472 for foreign-owned LLCs	Rarely	$300–$1,500

Indicative market ranges as at August 2026, not quotes. State fees verified against published schedules.

A comparison that is actually fair

Build the same basket for every provider: filing plus registered agent for two years, plus the EIN route that applies to you, plus whatever federal filing your ownership structure requires. Then compare totals. Most of the apparent price spread in this category disappears once the baskets match.

For the criteria beyond price, see choosing a formation and compliance provider.

Frequently asked questions

Why do some providers advertise $0 formation?: Because the state fee is charged separately and the business model is the recurring registered agent renewal, plus upsells. Free formation is real in the sense that the filing service costs nothing; it is not free in the sense that the first year total is zero.
What is the single most useful question to ask?: What does this cost in year two with the registered agent included? Year one is competitive because it is what people compare. Year two is where the pricing differences are largest and least visible.
Are more expensive providers better?: Not inherently. Price correlates more with scope and marketing spend than with filing quality. What genuinely differs is non-resident support, whether federal filings are covered, and whether anyone helps when a filing is rejected.

Sources

Last reviewed August 23, 2026. Verify against the primary source before acting.

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