Guide
Formation Is One Step. These Are the Other Forty.
Quick answer
A formation service files your articles, gets your EIN, and appoints a registered agent. Then it is finished. Everything below happens afterward, most of it annually, and some of it carries a substantial penalty or dissolves your company.
Disclosure: Prolify sells the second category. There is a section below on when a pure filing service is the right purchase instead, and it is not a short one.
What formation covers
Three things: articles filed with a state, an EIN obtained from the IRS, and a registered agent appointed for the first year.
Articles filed with a state. An EIN obtained from the IRS. A registered agent appointed for the first year.
That is a real service and it is worth paying for.
Firstbase's Start plan is $99, reduced from a listed regular price of $399, and it covers formation with the state fee paid separately.[1]
Which is good value for what it is.
What happens after
| Step | When | Cost or consequence if missed |
|---|---|---|
| Open a US business bank account | Weeks 3 to 6 | No revenue lands anywhere |
| Get through the country-of-residence gate | Same | Mercury and Relay disagree; a wrong first application costs a fortnight |
| Apply for a payment processor | After banking | Stripe rejects on the wrong address field |
| Choose the business type at signup | At each signup | Routes you to a verification path you cannot complete |
| Register a domain, email and website | Month 1 | Blocks Apple Developer enrollment later |
| Get a D-U-N-S number | Month 1 | Blocks Apple and Google Play organization accounts |
| Start bookkeeping | First transaction | Reconstructing a year in March is where filings go wrong |
| Categorize owner transfers | Ongoing | Reportable transactions; missing them means a wrong Form 5472 |
| File Form 5472 with a pro forma 1120 | April 15 | $25,000, then more |
| File the state annual report | State-specific | Administrative dissolution |
| Pay the state annual tax | State-specific | Penalty and interest |
| Track California nexus | Ongoing | $800/year if triggered |
| Keep the registered agent current | Annually | Notices stop arriving; see dissolution |
| Maintain proof of good standing | On request | Banks and processors re-check |
| Handle a bank or processor decline | When it happens | Weeks, if the cause is misdiagnosed |
| Re-verify with platforms | Periodically | Payouts pause |
| Decide on extension by April | Annually | Late filing rather than a filed extension |
| Handle ownership changes | When they happen | Different form entirely, 1065 with K-1s |
| Wind up properly if you stop | At the end | The tax keeps running until cancellation |
Two of those have hard numbers attached:
Failing to file Form 5472 when due and in the manner prescribed carries a $25,000 penalty.[2]
"If the annual report is not filed within sixty (60) days following the due date, the entity will be administratively dissolved."
Wyoming Secretary of State, Business FAQs.
Why the split exists at all
Formation is a transaction. It has a defined start, a defined end, and a deliverable you can hold.
Operating is a subscription to a set of deadlines you did not choose. It has no end, the deadlines move by state, and the consequences arrive through third parties rather than from the agency you missed.
Those are different businesses with different economics, which is why most companies in this market sell the first one. The first one is easier to sell, easier to deliver, and finishes.
When a pure formation service is the right buy
This section is longer than a company selling the alternative would like, and all of it is true.
You already have an accountant. If someone competent is handling Form 5472 and your books, the operating layer is a duplicate purchase.
You are comfortable with deadlines. Two federal dates and one state date is not a lot to manage if you are the kind of person who manages things. Put them in a calendar and the risk largely goes away.
Your country clears the banking gates. If you are in India, Brazil or the UAE, where Mercury and Relay are both open, the hardest step is not hard for you and you need less help with it.
You want the cheapest total cost and will do the work. Firstbase's formation price plus its separately sold annual agent, or doola's flat annual plan, plus your own diligence, is a legitimate way to run this. The figures are in the tables above.
Your business is small and simple. One owner, few transactions, no US contractors, no inventory in the US. The operating burden scales with complexity and yours may be genuinely light.
When it is not
You are in a corridor where banking is closed and you do not know what to try next. You have owner transfers you have not categorized and April is approaching. You have people or inventory in the US. You have already missed something and do not know what it costs.
Those are the cases where the second category earns its money, and they are a minority of readers rather than a majority.
Sources
| Claim | Source |
|---|---|
| Form 5472 penalty | IRS, Instructions for Form 5472 |
| 60-day administrative dissolution | Wyoming Secretary of State FAQs |
| Firstbase formation and agent pricing | Firstbase pricing |
| doola pricing | doola pricing |
Sources
- [1]Firstbase, Pricing — Formation is on us. Pay only your state fee. (retrieved )
- [2]Internal Revenue Service, Instructions for Form 5472 (12/2024) — A penalty of $25,000 will be assessed on any reporting corporation that fails to file Form 5472 when due and in the manner prescribed. (retrieved )
Related
- The U.S. LLC for Non-U.S. FoundersStart here — the complete overview
Last updated: September 1, 2026.
Next step
Get the company formed, and the calendar that keeps it alive.
Prolify handles the formation, the EIN, the registered agent and the annual filings on one schedule, so the deadlines on this page stop being yours to track.