A few times a month, somebody sits down at our front desk with a checkout page open on their phone and asks a version of the same question: *do I actually need this?*
The page is always one of the big national formation services. The layout is always the same: three columns, a free one, a popular one, a premium one, and a long list of add-ons with checkmarks and plus signs. One of the largest currently prices it like this: $0, $199, and $399, all plus state fees, with the paid tiers renewing at the same amount every year.
None of it is a scam. Most of the line items are real things. But the pricing works because most buyers cannot tell which items are valuable, which are free somewhere else, and which quietly renew forever. So here is the decode, item by item, from a Chicago front desk that fills out these same forms every week.
One thing first: Lobi Space is not a law firm and this is not legal advice. We file formation documents at our members' direction, we act as registered agent, and this is operator-level explanation of what the words on that checkout page mean.
The formation itself, and why "free" is real
The $0 tier genuinely files your LLC. You pay the state's fee, which in Illinois is $150 for Articles of Organization, and the service prepares and submits the form.
The business model is not hidden, exactly. It is the rest of this article. A free formation is the top of a funnel, and everything below is the funnel. That is not a criticism; it is just worth knowing that the decision you are making at checkout is not "should I pay $0 or $199 today," it is "which of these relationships am I starting, and what do they cost in year two." Hold that thought for the renewal table at the end.
Rush processing: whose clock is it?
The packages advertise standard processing in 7 to 10 business days, an upgrade to rush for +$79, and one-day processing on the paid tiers.
Read the fine print, because the service says it plainly themselves: their processing times do not include Secretary of State processing times, which vary. The days you are buying are the service's internal queue, meaning how fast they prepare and submit your paperwork, not how fast the state approves it.
Illinois sells its own speed separately. The Secretary of State's expedited service is a $100 add-on to the filing fee, and for paper filings the fee schedules say expedited requests must be made in person, in Springfield or at the Chicago office at 160 N. LaSalle. So when speed genuinely matters, know which of the two queues you are paying to skip.
The EIN: the most profitable $99 in the industry
Every package sells an Employer Identification Number for +$99 on the lower tiers.
The IRS issues EINs free, online, in about ten minutes, with the number appearing the moment you finish. We have written about this so often it is nearly a house tradition, and the details live in our LLC guide: weekday hours only, the session cannot be saved, and the confirmation letter, called a CP 575, is issued exactly once, so save the PDF immediately, because it is what your bank will ask to see.
Is the $99 ever worth it? Honestly, sometimes. If the responsible party has no Social Security number or ITIN, the online application is unavailable and the paper route through Form SS-4 by mail or fax is slow and unforgiving, so a service that has done a hundred of them earns its fee. And some people simply want every task handled by one vendor, which is a legitimate preference as long as you know what you are paying for: convenience, not access.
The operating agreement template: real document, template price
The +$99 operating agreement template is the item we get asked about most, because nobody at that checkout screen knows what an operating agreement is.
It is your LLC's internal rulebook: who owns what percentage, who decides what, how profits split, and what happens when someone wants out, stops working, or dies. Illinois does not require one and never sees it. Your bank will still ask for it when you open the account, and if the company ever has a dispute worth arguing about, it is the document everyone's lawyer reads first.
So the document matters enormously. The question is whether a fill-in-the-blank template is the version of it you need. For a single-member LLC, a clean template genuinely covers most of it, and free versions exist all over the internet. For two or more members, the template's blanks are exactly where the future argument lives, and an hour of attorney time to tailor the exit and deadlock terms is some of the best money a multi-member LLC ever spends. The template is a form. The value was always in the thinking.
The business documents library: the add-on that is actually underrated
The +$99 documents library is the line item people skip, and it is quietly one of the more defensible things on the page.
What it is: templates for the corporate paperwork that comes after formation. Banking resolutions, meeting minutes, consents, membership certificates, amendment letters. The unglamorous internal record.
Why it matters more than it looks: your liability protection depends on the company behaving like a separate thing from you, and the internal record is the evidence. When a bank wants a resolution authorizing the account, when a buyer's lawyer asks for your minute book, when anyone ever tests whether the company is real, these documents are the answer. Companies that skip them are fine right up until the first person reads the file closely. We wrote about that pattern in what you need to open a business bank account in Illinois, because the bank is usually the first reader.
Whether it is worth $99 from a national service or assembled from good free sources is a fair debate. That the documents themselves matter is not.
The registered agent: where the renewals live
Here is the engine of the whole pricing model. Registered agent service on the lower tiers: +$199 per year. Included in the premium tier, whose entire package renews at $399 a year.
The job itself is real and required. Every Illinois LLC must maintain a registered agent at an Illinois street address, present during business hours, to receive lawsuits and state notices. What the national price buys is a scan-and-forward operation. What it costs is $199 to $300 a year, every year, forever, and the renewal is the reason the formation was cheap.
Ours is $95 a year per entity, at a staffed building where a person signs for service of process and you hear about it the same day, with annual report reminders included. We publish that price because the renewal number is the one the checkout page whispers. The full picture of what the role involves is in our registered agent guide, and if you are weighing doing it yourself, that honest version is here.
"Worry-Free Compliance": a $199 wrapper on a $75 filing
The compliance add-on, free the first year and $199 a year after, bundles a compliance calendar, your annual report filing, and a couple of amendment filings.
Decode: the Illinois LLC annual report is a $75 state fee and roughly a ten-minute filing, due before the first day of your anniversary month, and the consequence of forgetting it long enough is real, up to and including administrative dissolution. We wrote the whole mechanism in the Illinois annual report guide.
So the $199 buys a reminder, a form most owners can file themselves, and a safety net for a deadline that matters. If you are the kind of owner who will genuinely never look at a calendar, that safety net has value. If you have a registered agent who includes reminders, which ours does at no charge, you are paying $199 for a service your registered agent already performs. The premium tier also sells an advanced version at +$99 a year with monitoring and unlimited amendments, which mostly matters to companies that amend things often, which most small companies do not.
The quick ones
Logo builder, +$60. A template logo generator. Fine for a placeholder; any designer, or frankly any careful hour with free tools, does better.
Domain, email, and website: free for 30 days, then $15 a month. This is a $180-a-year subscription introduced as a checkbox. Domains cost a fraction of that at any registrar. Take nothing on a 30-day timer unless you have decided to keep it.
Bookkeeping, +$30 a month. A real category, and one where the right answer depends entirely on your volume. Compare it against the standard products before buying it inside a formation checkout.
S corp election, included on every tier. Worth decoding since it sounds premium: this is IRS Form 2553, a short form with a deadline of two months and fifteen days into the tax year you want it to apply to. Whether the election saves you money is a CPA conversation about your profit and a reasonable salary, and no checkbox can answer it.
The year-two table nobody screenshots
Here is the same checkout page, twelve months later, using the service's own published prices:
| Item | Year one | Year two |
|---|---|---|
| Formation | $0 | already formed |
| Registered agent | $199 | $199 |
| Worry-Free Compliance | free | $199 |
| Domain, email, website | free 30 days | $180 |
| Total | $199 + state fees | $578, every year |
The $0 LLC costs $578 a year by its first birthday, before bookkeeping. None of those charges is hidden; each one was a checkbox. The pattern to see is that every renewal replaced something that is either free, nearly free, or a fraction of the price when bought deliberately: the reminder is a calendar entry, the report is $75 to the state, the domain is a registrar away, and the agent, at least in Chicago, is $95 a year at a building you can walk into.
What we would actually tell you
Buy convenience with your eyes open, because convenience is a real product. If one vendor handling everything is worth $578 a year to you, that is a legitimate choice, and the big services execute it competently, guarantees and all.
But if you are willing to know what each line is, the durable rule is this: pay one-time prices for one-time things, and be extremely choosy about anything that renews. The formation is a one-time thing, and our formation service prepares and files it at your direction, with a human you can call. The things that genuinely recur, the address, the agent, the mail, the reminders, are exactly what a virtual office or business mailbox plan is, at published prices, with the renewal number said out loud.
That is the whole difference in philosophy. The checkout page is designed so you discover the renewals later. Ours is designed so the renewal is the first number you see.
The short version
The checkout page is a bundle of real things at mixed prices: a free formation, a $99 form the IRS gives away, a $99 template with real purpose, a genuinely useful documents library, and two renewals that quietly become $578 a year. Decode it line by line and buy each piece where it is honestly priced. And if you would rather have the whole thing at one building with the renewals said out loud, start here, or come see the front desk that answers these questions for a living.
