To start a business, one of the most difficult tasks is how to form LLC. When you start a business, how can you register an LLC? There are many methods to form an LLC. In this article, we will list some easy ways to form and register an LLC.
Is it possible to form an LLC for Cheap?
There are some easy ways to form a limited liability company ( LLC). The first way is choosing a naming convention that is based on state and business type. It depends on your personal preference, but try to keep in mind the future growth of your company.
For example, if your company name has “Inc,” you need just $39 for forming an LLC with this naming convention. The next way is you can form an LLC with a lawyer’s help, but it will cost you more than $300 for sure. If you don’t want to spend too much money on forming LLC, try the following methods.
How to Form an LLC Cheaply (No Upfront Fees)?
You can form LLC in just one day. It is easy and fast to set up the business, but you need to gather all the important documents before that.
If you don’t have an attorney on board already, start by asking your friends or colleague about which attorney they use to form an LLC. After that, you can call the attorney and ask about the steps for forming LLC in your state.
Then, follow these easy ways to form one:
1. Buy a Domain Name
Choose a good website name or domain name before you start to form the business entity. It is cost-effective to choose your own domain name.
There are some services like GoDaddy, Bluehost, HostGator, etc. You can try their yearly packages for only $3 per year.
2. Create a Website or Blog
If you already have bought a domain name with your business name, start building the website and blog right away to get more customers later.
There are many free website platforms like WordPress.com and Blogger to start a professional blog or website without any programming skills.
3. Make a Facebook Page
Facebook is the most powerful social media out there in terms of business growth. It is cheap to build the page too, but don’t forget your page needs followers. Try to add followers slowly and use Facebook ads later on.
4. Get a Logo Design
For your small business to get recognition, you need the logo design first. There are many places where you can have it made for cheap or even free if you know how to search for the right.
You can design your own logo with Canva or buy a logo set on GraphicRiver for $5. If you want to find a designer, start posting your project on Upwork and get bids from different designers.
5. Get an EIN Number
The next thing that you need is the EIN. The Employer Identification Number (EIN) is used for tax purposes, but you can use it for all kinds of paperwork.
For example, the EIN is used to verify your business on Facebook or Google services. You can apply for an EIN online by filling out IRS Form SS-4 and get back a 9-digit EIN instantly.
6. Order Business Cards
Business cards are important for any business. You can buy cheap business cards on Moo, VistaPrint, or OvernightPrints. One hundred and fifty business cards will cost around $50.
7. Apply for the Business License
The next step is applying for local and state licenses to make your LLC legally recognized by the government.
On average, it costs $200 to $500 or more depending on the state.8. Buy a Cheap Domain Name
If you want your business website and domain name as one, you can buy this service from GoDaddy for as low as $11.99/year for .com domain names.
9. Apply for Tax ID Number (EIN)
Tax ID number is a 9-digit number that is used for tax purposes. You can apply for it online or by calling the IRS help center. The application takes around 15 minutes and costs $6 to $25, depending on your state’s requirements.
10. Print Business Cards at Home
You can print business cards and stationery at home by using an inkjet printer. For example, with HP wireless printer M477dw, you can print full-color business cards from your laptop or android phone. It costs $50 for the printer, and you can get some good deals on card stock paper.
11. Set Up Your Business Online
The next step is to get your business online. There are many services where you can buy a domain name with hosting for as low as $3/month or less.
It is possible to host a website from HostGator or SiteGround because of the great support and fast speed, or Bluehost because they offer good shared hosting at low prices.
Also, if you are just starting and need to get a website for cheap, start by using Wix or WordPress.
12. Sign Up with Local Business Organizations
Small business organizations like SCORE can help your company grow in the local area. You should also try to join other groups like the Chamber of Commerce, Rotary Club, BNI, and others that can help you expand your network.
13. Find a Good Internet Service Provider (ISP)
Another important thing is having a good internet service provider for the business. Comcast Xfinity is affordable ($49/month) with fast speed and great customer service.
14. Hire an Accountant to Start Your Bookkeeping
The last step is to hire an accountant for the bookkeeping. If you are just starting, try to find a small business accountant that can help you with your taxes and other paperwork.
You probably will spend around $100 every month if you’re running a small business between buying stuff, paying bills, employing people, etc.
15. Network with People
The last tip is to network with people! I’m not talking about the sales pitches but finding someone who can share knowledge and experience.
There are many communities where you can connect with like-minded people: social media groups or forums, small business organizations, real estate investing clubs and podcasts, etc.
The Cheapest Way to Form an LLC
That’s my top 15 cheap ways to start a business. Keep in mind that there are many steps and small stuff that you might have to pay for, like insurance, tutoring your employees, etc. Also, the cost of starting an LLC is not the same from state to state.
The Do-It-Yourself Way
DIY (Do It Yourself) types of people can start a business as cheaply as $75 to $150 on most occasions; if you are one of those brave souls who likes to take risks.
You have to do yourself: creating the LLC and filing for state and federal taxes. You might need an attorney or accountant for some added fees if you’re unsure what to do. But you can start a business for cheap by yourself.
Use a Legal Assistant to Help Form an LLC
If you want a professional touch for starting a business, many legal assistants around the country can help you form your company for as low as $1,000. Most of them spend less than 1 hour filling out all the forms and send them to you in PDF format.
The next thing you do is print the forms, sign them, and mail them to your state’s LLC office.
Use an Incorporation Process Service
If you don’t want to spend too much time on paperwork, some companies will form your company. You can use Incorporateonlinenow.com because they have low prices at $129, and you get the added value of local LLC tax attorneys to review the documents for free.
These big incorporation companies are quite popular because they can form a company for you in just 24 hours, but please keep in mind that you will pay more than $150.
There are many other companies that offer cheap LLC formation services:
- Cheap LLCs Filing Services
- Registered Agent Service
- Online Business Center Inc.
- Digital Docs, LLC
- Rocket Lawyer
- Legalzoom (Up to 50% off)
You have to be careful because there are some fly-by-night companies popping up and disappearing in a couple of months.
Before spending money on them, always do a background check from the Better Business Bureau, Search Engines, and other reputable websites. If you don’t like any of those companies, you can always form your LLC by yourself.
Cutting Other Costs of Starting a Business
Here are a few ideas to cut your cost of starting a business:
- Rent out an office or home instead of renting one. If possible, you can try to rent out empty spaces in your own house and turn it into offices for your employees. Not only does this save money on rent, but you can also have more privacy and build a better team.
- Use a shared table or desk at your local library to work. The downside of this method is that you can’t meet with clients, but it’s free! You just have to be nice to the other people using the space by being quiet and respectful. If you need some privacy, go somewhere else to do work.
- Start a business that requires you to be on the phone and online. You can make calls from home or work, but just keep in mind that working at home means finding a quiet place with no distractions. If you have enough discipline, then this is one of the cheapest ways to start a business.
- Buy used computers & office furniture for your employees. You can find cheap stuff at Kijiji, Craigslist, and other used office furniture websites. Just keep in mind that in the first month, you will most likely experience some hardware problems – so have a backup plan.
- Do business from home as long as possible until you get your feet off the ground. This means working around your family schedule and finding a quiet place to work. This is very good advice if you have kids in the house or you just want to start out slow with your business.
- If you are not legally allowed to work from home, then find shared office space near home.
Average LLC Start-Up Costs
I. A Web Site/Blog
$100+ for domain and hosting costs. You can also find free blogging software, but it is better to use WordPress and to host it on BlueHost or GoDaddy.
II. Business Cards & Stationary
$50 to print & design 25 business cards. You can buy online or do it yourself, in which case you will save a lot of money.
III. Business Insurance
$500+ for general liability insurance. You don’t want to be an uninsured entrepreneur because lawsuits are very common. Don’t risk it!
IV. Local Business Licenses
$500+ for local licenses & permits if needed. You have to do this, but keep in mind that different cities and municipalities have different regulations on small businesses, so make sure you check with your city.
V. Extra Cost of Services
$150 to $500+ for extra services such as accounting and bookkeeping, web design & development, payroll, taxes, and more.
The amount you spend depends on how much your business needs them. If you are starting a freelance service or consulting company, don’t forget the marketing cost.
$1,000+ for basic marketing for your business in the first month. Marketing costs depend on what type of company you have and how fast you want to grow.
Businesses that require a lot of word-of-mouth, such as restaurants and service providers, tend to spend less than businesses that sell products.
VII. Adwords Advertising
$100+ for small tests on Google’s ad network. You don’t have to do this right away if you want cheaper alternatives.
VIII. Social Media
Free marketing is always the best because it is free. Just keep in mind that it takes a lot of time to be active on social media, so you can use Fiverr to promote your small business by paying someone $5 an hour to post regularly on your FB or Twitter accounts.
This should only cost around $100 a month if you have more than 100 followers per account because you can ask for bulk discounts.
IX. Free Promotions
This is a great way to promote if you are just getting started with your business. Just download free eBook covers, Facebook Timeline Covers & Twitter Banners/Sigs and place them on your website or blog in exchange for a link back to your company’s site or the product page.
You can also download free eBooks and white papers to give away as opt-in incentives for your website. This strategy is very cost-effective and takes less than 5 minutes of time per week to implement…
Can You Save More by Filing in Another State?
The state in which you file your business matters, but it is not as important for small businesses until you start to generate a lot of revenue.
Start filing in a more appealing state and then switch to another state once your business starts earning enough money and you feel like moving. Here are some of the most generous business tax states in alphabetical order:
- South Dakota
If you have a lot of money to spend, then it might make sense to file in all those states, but for most people, it is better just to stick with one. If you have other questions about small business taxes, feel free to ask them in the comments below.
Can I Form an LLC for Free?
No one likes to pay for useless things, and most people don’t have a lot of money, so if they can find free, it’s a good deal.
However, as many small business owners know, getting free legal help takes a lot of time and effort. It requires you to do your fair share with the research and looking for free options. These are some of the legal documents that you can find for free on the Internet:
- Articles of incorporation (Need to find a secretary of state)
- LLC Operating Agreements – You need an operating agreement if you want to operate your business as an LLC because it is not required by law. Most people don’t save money by filing as an LLC because they still have to pay for a business license and then register/pay the state for an assumed name certificate. These state filing fees are not required if you form as an LLC, but they add up quickly over time.
- Business License – This is something that every business needs to get before starting operations. Most states make it easy to apply online, but it is usually around $100.
- Assumed Name Certificate – This is also known as a DBA (Doing Business As) in some states and is required to do any kind of business under your LLC name. The state filing fee for this varies from state to state, but you can expect to pay at least $50 for the certificate.
Can You Get a Good Business Attorney for Free?
There are more and more success stories of people who decided to do their own legal work when starting their own businesses. However, most people are just not willing or interested in doing their own stuff.
The best-case scenario is to find a legal team that gives you free consultations and then charges you only after they win your case. If we are looking for free options, then we have to go through the Yellow Pages.
You can look up lawyers by the state in order to see if anyone has given away their LLC services for free, but it would be easier to just create a link that takes you to a list of every state.
If you are looking for help with your business or corporation, please make sure that the lawyer does not charge in advance.
There should be no upfront costs, and you should only pay after they win your case. Also, you might have heard of some success stories where people were able to get a free lawyer, but that is usually for small cases. You will have to cough up some cash if you want someone who knows what they are doing most of the time.
Is an LLC Cheaper Than a Corporation?
One of the first considerations for a business owner is forming an LLC or a corporation. An LLC is cheaper and easier to establish than a corporation and is tax-wise; however, it lacks “limited liability,” which makes it vulnerable if sued.
On the other hand, a corporation includes limited liability but also has more complicated setup requirements and more extensive ongoing maintenance.
Ultimately, whether you choose to form an LLC or a corporation depends on your business goals and what you need from your business structure. Below is a cost breakdown of the two business entities to help you compare costs and regulations.
If you have money to spend, there is no reason you cannot use a lawyer. They are very helpful in protecting your business and can save you time, but hiring one from the start will cost at least $2000 or more.
If you don’t have a lot of money available to spend, then this is the best route. If you can find a free attorney who will do your paperwork for you and take care of everything, then there is no reason you should not go that route.
However, if they start asking for a large amount down or charge in advance, then don’t bother hiring them. Do your own research and if you cannot find a free lawyer to help you with legal stuff, then do it yourself.