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by David Brown

Forming a new business can be daunting. There’s so much to do, from picking the right structure to handling piles of paperwork. It’s enough to turn eager entrepreneurs away before they even begin.

But it doesn’t have to be that way.

LLC formation services are here to help. By taking care of the busywork and formalities around creating your LLC, they empower you to focus on what matters—building your business. The key is finding one that fits. One aligned with your needs, budget, and goals.

To help with that, here are the seven key questions you should ask when evaluating LLC formation services. The right answers will lead you to the right partner for success.

Overview of LLC Formation Services

LLC formation services aim to make starting an LLC as smooth as possible. They guide entrepreneurs through the process, ensuring proper paperwork and filings while saving valuable time.

The core aspects most services provide include:

Registered Agent Services

Nearly all states require LLCs to designate a registered agent—the person or business authorized to receive important legal and tax documents on behalf of the company. Formation services typically offer registered agent services, allowing your LLC to use them as the registered agent. This avoids the hassle of finding and designating a separate registered agent.

Preparing and Filing Documents

Formation services handle the preparation and filing of your articles of organization. This key document makes your LLC official in the eyes of your state. Services ensure it’s error-free and filed properly.

Templates for Operating Agreements

An operating agreement outlines the ownership structure and ground rules for LLC management. While not required, it’s considered vital. Formation services provide customizable templates to create an operating agreement tailored to your LLC’s needs.

The main benefits of using an LLC formation service include:

Saves Time and Hassle

Forming an LLC involves multiple steps and paperwork that can be confusing if you DIY. Formation services significantly reduce the administrative burden through their expertise and diligence with filings. This frees up your time to focus on business priorities.

Ensures Proper Filing and Setup

Given the intricacies and nuances involved state-by-state, there’s ample room for mistakes when creating an LLC solo. Formation services help guarantee everything gets filed correctly the first time based on their experience. They also ensure your LLC gets structured and set up properly from the start.

Provides Ongoing Support

Top services don’t just help establish your LLC, then disappear. They provide continuing support to help maintain compliance and good standing. This includes handling renewal paperwork, sending reminders about due dates, answering questions, and more. Their ongoing guidance is invaluable.

Key Factors When Selecting an LLC Service

With the value formation services provide, it pays to evaluate a few key factors during your selection process:

Service Packages and Pricing

Services offer tiered packages, usually a basic formation package and premium packages with extras like express filing, operating agreement templates, EIN obtaining, and more.

When comparing services, look at:

Starter vs Premium Packages

The inclusions can vary widely, so compare starter packages to understand baseline services offered. Then look at premium packages and additional services available.

What’s Included in Each Package

Beyond formation itself, examine what else comes in each package like registered agent services, operating agreement templates, tax consultations, banking assistance, etc.

Value for Money

Factor in what you get at each tier along with customer service reputation. Aim for the best service and support you can afford.

Customer Support and Communication

Even with the best systems and technology, questions and issues inevitably come up. The availability, responsiveness, and communication channels of a service’s support team is pivotal.

Consider the following:

Availability for Questions

What are the support hours? Are certain methods limited to business hours? All-hours availability via at least one channel should be expected.

Response Times

Look for guarantees around response times. Within an hour or two for urgent issues is ideal. 24–48 hours for non-urgent inquiries is generally reasonable.

Contact Methods

Good services offer phone, email, live chat and self-service knowledge bases. This allows you to get quick help how you prefer. Compare available options.

Registered Agent Services

Most states require LLCs to designate a registered agent—the go-to contact authorized to receive important legal and tax documents on the company’s behalf.

Using a formation service as your registered agent can simplify things. But pay attention to:

Using the Provider as Your Registered Agent

See if they offer registered agent service with your package or if it costs extra. If not included, compare pricing.

Differences in Registered Agent Packages

Some include basic forwarding, while premium options add scanning/emailing documents received.

Understanding Registered Agent Responsibilities

They receive legal notices, so staying compliant with state rules. Uptime and security of their systems is vital.

Questions to Ask Before Choosing

Once you’ve compared the core aspects like services, pricing and support, ask these key questions:

How Long Have You Been in Business?

Longevity indicates a reliable track record. Many states also require registered agents to have been operating for a period.

What Is Your Track Record with State Filings?

Ask for details around their experience with filings in your state, success rates, and how they ensure compliance.

How Quickly Do You Respond to Customer Inquiries?

Confirm timeframes they commit to for different contact channels and urgency levels.

Do You Serve as the Registered Agent or Provide Alternatives?

See if using them as your registered agent is mandatory or if you can designate a third party.

What Do Your Service Packages Include?

Get specifics on everything included with starter, premium, and add-on options.

Do You Have Experience with My State’s LLC Rules?

Ensuring they stay on top of requirements in your state is key.

What Are Your Service Fees, Both Initially and Ongoing?

Factor both upfront and recurring fees into your evaluation. Some have annual fees, while others don’t.

Key Aspects of LLC-Like LCA Entities

While most small businesses opt for a standard LLC, LCAs (Low-profit Limited Cooperative Associations) are noteworthy. They allow for an LLC-type structure but on a cooperative basis.

Some key aspects:

LCAs Allow for LLC-Like Structure with Cooperative Basis

LCAs let members pool resources and share profits like an LLC, but structured around a member-driven cooperative.

Provide Liability Protection and Flexible Management

Like LLCs, LCAs limit personal liability and allow flexibility in structuring management and profit-sharing.

Require Filing Articles of Organization and Bylaws

Formation process mirrors LLCs — requires filing formation docs and adopting bylaws.

Allow Members to Pool Resources and Share Profits

The cooperative foundation facilitates collectively contributing, then sharing in the success.

So while LCAs aren’t suitable for regular small businesses, the cooperative LLC-like setup can appeal for certain entities.

Conclusion

Selecting the right LLC formation service is critical to getting your business off on the right foot. Doing your homework and asking the right questions helps ensure you choose the best fit for your needs and budget.

While DIY formation is certainly possible, the expertise and efficiency of quality services provided can be invaluable. They reduce administrative burdens substantially so you can focus on business priorities.

A good formation partner also sticks with you over the long haul. They continue serving as your registered agent, helping maintain compliance, and being available to answer questions. That ongoing support can pay dividends as your LLC evolves.

So be sure to thoroughly evaluate your options using the framework above. The right formation service aligns with your goals and priorities—empowering your new business to thrive from day one and beyond.


David Brown
Director of Public Outreach
Namechk.com