My business partner and I had finally decided to form a Limited Liability Company (LLC) a few months ago for our software company Highview Apps, where we focus on building Shopify apps. We intentionally took our time before forming a company as we weren't sure if we'll actually get anywhere with our app ideas.
We started working on our first app, Slacky (integrates Shopify and Slack), last year to test the Shopify ecosystem and gave it away for free. We're both engineers and just found it fun to work together on this side project but we didn't really take it seriously. But then we kept getting regular installs for Slacky without really doing much on the marketing side. So we decided to build additional apps, but this time we both agreed to start charging for them right in the beginning.
We then launched our second app, EZ Exporter, back in December 2016 and that too had been doing quite well even with very little marketing and that's when we decided this could be a real business and it's time to finally form a company officially.
We've never gone through the process of forming an LLC in the US on our own before, though there are plenty of websites out there that will give you step-by-step instructions and seemed straightforward enough. But we figured to save time and make sure it's done right, we'd rather just pay for a service that would handle everything for us.
The 2 companies we've looked into for forming an LLC are LegalZoom and IncFile. The biggest difference is the pricing. Here are the pricing for their most basic plans:
- Starts at $149
- +$159 for a registered agent for 1 year
- Starts at $49
- Registered agent is included in the fee for 1 year
A registered agent is pretty much a requirement for companies. It's basically a 3rd-party that can accept documents on your behalf to make sure you don't miss them (such as legal documents, tax related information, etc.). You can't use a PO box here.
As you can see from the prices above, it's a big difference and both cover the basics so either one can work. So we just went with IncFile, but instead of their most basic plan (Silver), we went with the middle plan (Gold) which is $149. The extra things that the Gold plan provides that we wanted were the Employer Identification Number/Tax ID (EIN, LegalZoom chages an extra $79 for this), operating agreement, and the banking resolution. Though the operating agreement and banking resolution are really just templates, you can find these easily online. The EIN is a requirement but you can actually just do this yourself from the IRS website and takes like 5 minutes. With the Gold package, they also mail you a big binder with printed copies of the documents which we honestly don't really care about or even want. We like our things in digital format.
Either way, even with the Gold plan, it's still cheaper to go with IncFile. Though if I were to set up another company, I'd just go with the cheapest plan and apply for my own EIN.
The process itself was very straightforward. You fill out an online form then they take care of everything else for you. Within about 3 days everything was ready. They sent us electronic copies of all the docs and we saw our company listed in our state's business database which is publicly available online. The process was really easy.
Also worth noting that the prices above are just for the formation service itself. You'll have to pay a state filing fee in addition to the service, which varies by state.
Overall, I'm quite satisfied with the service and felt it was definitely worth the money spent for the time it saves you, especially if you've never done this on your own before.