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Legal Zoom LLC Formation Service Review
| LegalZoom.com, Inc | |
|---|---|
| Founding Year: | 2001 |
| LLC Formation Starting Price: | $79+ state filing fees |
Pros:
- Well Known Name
- Been in Business for over 2 decades
Cons:
- Higher Prices than Most Other Providers
- Slow Processing Times
- Charge for Services Other Providers Includes with Packages
LegalZoom LLC Formation Service Review Table of Contents:
LegalZoom Overview
LegalZoom is the biggest business formation provider in the US. LegalZoom was founded in 2001 and is based out of Glendale, CA. In the past 2 decades, LegalZoom has become the most well-known brand within the industry and has grown into a massive company that employs over 1,000 people. LegalZoom proved to be one of the leaders in the online business formation industry and helped grow it into what it is today.
LegalZoom LLC Formation Services Review
When it comes to forming an LLC, LegalZoom offers 3 different packages that are based primarily on the turn-around time:
- $79 for Economy
- $329 for Standard
- $349 for Express Gold
Example packages shown with Nevada selected as state of formation
Our Take on LegalZoom’s LLC Formation Services
In our opinion, LegalZoom’s LLC formation packages are overpriced and provide less value than competitors. There is simply too little value in their packages for the price points they have compared to competitors for us to recommend any of their packages. We have 3 main issues with LegalZoom, which is why we do not recommend them:
Why we don’t recommend LegalZoom:
- Basic Formation is Too Expensive
The basic Economy package from LegalZoom may seem cheap at $79 but this is much more expensive than a number of other providers. Beyond the higher price, LegalZoom’s economy package doesn’t include enough other features or services to justify its price. Essentially all your getting outside of the LLC formation is a 30-minute tax consultation, which many other providers offer. You can also get a similar consultation for free from 1-800Accountant without a purchase necessary. - Charge for Almost All Additional Services
One of the biggest issues we have with LegalZoom’s approach is that they don’t include any of what we deem the “LLC essentials” with any of their packages. We recommend that every LLC obtain an EIN, create an operating agreement, and if desired choose a registered agent service. Other providers offer these services as part of their packages but LegalZoom charges extra to add any of these services. - Slow Processing Times
LegalZoom is also fairly slow when it comes to how long they take to actually process orders and submit them to the Secretary of State office. Their pricing model is set up in a way where if you want to use a low-cost option you’ll be waiting a month or longer for your LLC to be formed. If you want to have your order processed faster your forced into choosing either the Standard or Express Gold options which are very expensive. This is something that is not necessary in our opinion and you can get much faster service most other LLC formation services on the market.
LegalZoom Alternatives and Competitor Comparisons
When comparing LegalZoom the competition we looked at 3 most common ways of evaluating an LLC formation service:
- Cheapest Basic LLC Formation – For those looking for the absolute cheapest option available to form an LLC, regardless of other add-ons or other features.
- LLC Essentials – In our opinion, the most valuable collection of items should include the essentials you’ll need to get your LLC off the ground. This includes the LLC formation itself, EIN, Operating Agreement and Registered Agent Service.
- Premium Package – For those seeking a full service that includes the essentials and other valuable add-on features.
Cheapest Basic LLC Formation
For those on a budget, finding an affordable provider to assist them with the basics to get their LLC formed is a priority. While LegalZoom does offer an Economy package for $79 +state filing fees, there are options that much more affordable. For those looking for the lowest cost service to get their LLC formed, Inc Authority is a better option. Inc Authority base offering allows you to form your LLC for free, so you only pay state filing fees. Here’s how the 2 stack up against each other:
| Feature Name | Inc Authority | LegalZoom Economy |
|---|---|---|
| Articles of Organization Filing | ||
| Registered Agent Service | Free for 1st Year, then $99 per Year | $249 per Year |
| Tax Consultation | ||
| S Corporation Election Form | ||
| Business Checking Account | ||
| Business Credit & Funding Analysis | ||
| Average Filing Turnaround Time | 10 Business Days | 30 Business Days |
| Price | $0 +state filing fees | $79 +state filing fees |
Cheapest Basic LLC Formation Recommendation
Inc Authority is the superior option for those seeking the lowest cost option for forming an LLC. When compared to LegalZoom’s Economy package, Inc Authority’s service is cheaper, faster, and provides more features. Because of this Inc Authority is our #1 recommend provider for those seeking the lowest cost option.
LLC Essentials
When starting an LLC there are a few core items that we refer to as “LLC Essentials”. These essentials include the LLC formation itself, EIN obtainment, and the creation of an operating agreement. While not as essential we also consider if the service has a rush processing option and if it includes registered agent service. When we evaluated these options we found that ZenBusiness’s Starter Package and Inc Authority were the best options available. Here’s how they compare when it comes to the essentials vs LegalZoom:
| Feature Name | ZenBusiness Starter | Inc Authority | LegalZoom Economy |
|---|---|---|---|
| Base Fee | $49 +state filing fees | $0 +state filing fees | $79 +state filing fees |
| Articles of Organization Filing | |||
| EIN Obtainment | $70 | $49 | $60 |
| Operating Agreement | $89 | $99 | |
| Rush Processing | $50 | $49 | |
| Registered Agent Service | $99 for 1st Year $199 per Year After |
Free for 1st Year $99 per Year After |
$249 per Year (no first year discount) |
| Price for LLC Essentials w/o Registered Agent | $119 | $138 | $238 |
| Price for LLC Essentials with Registered Agent | $218 | $138 | $487 |
Our Recommendation for LLC Essentials
- Don’t want or need Registered Agent Service
Go with ZenBusiness Starter plan and add the EIN option during checkout for a slightly lower price.
Choose ZenBusiness Starter - Want to have Registered Agent Service
Choose Inc Authority as you’ll get the first year free, and it renews at half the rate of ZenBusiness.
Choose Inc Authority
Premium Package
LegalZoom’s premium package, which they refer to as “Express Gold”, is priced at $349 +state filing fees. While this package does include faster processing and an LLC kit there’s not much else included. When you compare this to other premium service options, it is one of the worst value for the price on the market, in our opinion. There are 2 other providers on the market that we believe provide a much better value for a similar or lower price and have even faster processing timeframes.
LegalZoom Express Gold Alternatives:
Northwest Registered Agent Monthly VIP Service
Norwest Registered Agent is a business formation service provider founded in 1998 – so they’ve been around even longer than LegalZoom! They are well known for their excellent customer support. Northwest’s Monthly VIP Service is a great option for those seeking a premium service that includes registered agent service.
The great thing about their Monthly VIP Service is that you pay a low monthly price and you get more services and features than LegalZoom’s Express Gold package. The monthly price includes the state filing fee so you can actually form your LLC for an initial payment that’s only about 1/3 of the state filing fee. The monthly price will vary because of the difference in the state filing fee but ranges from $30-$73 per month, with the average being about $38.
- Business Formation
- Registered Agent Service
- Free Business Address
- EIN Filing
- Operating Agreement or Corporate Bylaws
- Banking Resolution Document
BetterLegal
BetterLegal is another great option for those looking for a premium business formation service that provides great value. They are a newer provider in the business formation space that was founded in 2016. BetterLegal’s service is entirely focused on providing premium filing service so they only offer one package that’s $299 +state filing fees.
Why do we recommend BetterLegal over LegalZoom?We recommend BetterLegal’s over LegalZoom’s Express Gold package because it provides a lot more value to the customer. BetterLegal’s service is not only cheaper than LegalZoom’s Express Gold package but it includes a lot of services like EIN obtainment, an operating agreement, banking resolution document, and business website which LegalZoom either charges extra for or simply does not provide. Here is a detailed comparison so you can make the right choice for yourself:
| Feature Name | LegalZoom Express Gold | Better Legal |
|---|---|---|
| Articles of Organization Filing | ||
| Employer ID Number (EIN) | $60 | |
| Operating Agreement | $99 | |
| Banking Resolution | ||
| Business Website | ||
| Tax Analysis | ||
| Business Checking Account | ||
| Insurance Evaluation | ||
| Payroll, Benefits, and HR Platform | ||
| Registered Agent Service | $249 | $90 |
| Average Processing Time | 10 Business Days | 1-2 Business Days |
| Package Price | $349 +state fees | $299 +state fees |
Premium LLC Formation Recommendation
BetterLegal provides a much better all around value compared to LegalZoom’s Express Gold package in our opinion. Their formation service is $50 cheaper and it provides a lot more for the money than the LegalZoom Gold Express option. If you want or need registered agent service, you’ll also save a lot of money by choosing BetterLegal.