The $0 LLC: What Free Formation Actually Includes, and What It Never Does
What the $0 actually buys
The $0 tier at ZenBusiness and LegalZoom covers the service's labor for one task: preparing and submitting your articles of organization. That is a real service, and for that one form it works. What it does not include, anywhere: the state filing fee (from $35 to $500 depending on your state, on the official-fee table), the EIN, the operating agreement, the registered agent, or any compliance filings. Those are either add-ons or your problem, by design.
The fee no service can waive
The state creates the LLC, and the state charges for it, identically whether you file yourself or a service files for you. The same goes for speed: approval time is set by the state, and the only accelerator is the state's own expedite fee. A service that implies its $0 filing is faster or cheaper at the state counter is describing convenience, not access. The full six-step process, with what each step costs, is in how to start an LLC.
Where the model makes its money
Registered agent service is the engine. Every LLC must maintain an agent continuously, the service enrolls you during checkout, and the renewal bills arrive every year: $199 at ZenBusiness, $249 at LegalZoom, against $125 at Northwest, whose $39 formation includes the first year. Over five years the agent subscription quietly costs several times the formation fee. You can be your own agent for free in most states if you accept your address becoming public record; the honest tradeoffs are in the registered agent guide.
The second engine is add-ons priced against ignorance: $99 for an EIN the IRS issues free in minutes, $99 for an operating agreement template, and compliance subscriptions for filings many owners can calendar themselves.
The upsell that is actually a tax filing
Some checkout flows offer S corporation setup as if it were a formation feature. It is not: the S corp is a tax election made on IRS Form 2553, it only pays off when profits comfortably exceed a reasonable salary for your work, and it brings payroll and a separate tax return with it. Buying it as a checkbox at formation, before the business has any numbers, is backwards. The honest breakdown is in LLC vs S corp.
When paying still makes sense
None of this makes formation services a ripoff. A fair price for genuine convenience, one dashboard, and automated report reminders is a legitimate purchase, and Northwest's bundle-first model shows the products can be priced straight. The rule is just: know what the state charges (your state's real fees), know what is free elsewhere (the EIN, being your own agent), and then judge the service fee on what remains. And if you are still deciding whether you need an entity at all, start one step earlier with LLC vs sole proprietorship or the answers hub.
Related Business Formation guides
Sources
General educational information only; not legal or tax advice. State fees and requirements change; verify with your state's filing office. Consult an attorney or tax professional about your situation. Last updated July 2026.