Choosing between two business formation companies with competitive experience may not be a walk in the park. I know; I was in the same confusion for months before starting my first business.
I was afraid of making a mistake at the onset of my business, and as a result, I stayed in the world of indecisiveness for months. Why am I telling you this? I wouldn’t wish you to be in an indecisive position. The reason why people cant arrive at a decision is due to a lack of knowledge.
Chat Box - Ask me about any job or career...
Sorting out the formation documents can be a difficult task.
In this LegalZoom vs. IncFile Review, we shall be looking at what makes these two giants stand out from the others.
Since Knowledge is power, you can also check my previous reviews starting with Swyft Filings LLC review, IncFile, and ZenBusiness, which are some of the best LLC formation service providers.
- Both offer helpful articles and guides to help you make your choice right.
- Both offer registered agent services.
- They have three packages.
- Both offer free 30 minutes business tax consultations.
- Both offer free electronic delivery of documents.
- LegalZoom offers business formation and legal help, while IncFile provides company formation services only.
- LegalZoom started in 2001, while IncFile began in 2004.
- IncFile is affordable compared to LegalZoom.
- IncFile offers a free registered agent for one year and then renews at a lower price of $119, while LegalZoom provides the same service at $249.
- LegalZoom offers a faster registration process while that of IncFile is long and detailed.
IncFile incorporation service began its operations in 2004. The aim was to reduce the paperwork during business registration. Over the years, they have helped over 500,000 small business owners set up their businesses.
Apart from start-up, they also offer services to help your business stay compliant with the law. These services include; filing returns, registered agent services, among others.
LegalZoom started in 2001 when they first launched business formation services, real estate planning, and intellectual property. What is unique about LegalZoom is that apart from being a business formation company, it also offers legal service.
They help reduce the paperwork involved with registering a business and also solving your legal needs. Additionally, they offer services to keep you compliant with state laws.
Comparison; LegalZoom vs. IncFile
Both LegalZoom and IncFile have some similarities in the way they provide their services. Below is an overview.
The price of services determines, in most cases, whether you need it or not. Business owners work under different level budgets, and therefore, the price is critical. Below is a comparison of the costs of the two incorporation companies.
IncFile offers three business formation packages; silver, gold, and platinum. So far, IncFile is the cheapest LLC formation company I have seen. Below is an overview of the services they provide;
Silver is the cheapest formation package IncFile offers. It costs $0+state fees, and below is what you get;
- Preparing and filing the articles of the organization.
- Unlimited name searches.
- Free registered agent services for a year.
This package will cost you $149+ state fees. In this business formation package, you will get all the benefits in the silver package and also the following;
- EIN Business Tax number.
- IRS form 2553
- Corporation bylaws
- Banking resolution
- Lifetime company alerts
- Online dashboard access
- Unlimited phone and email support
- Business banking account
- Business tax consultations
This service costs $299+ state fees. When you purchase this business formation package, you will get all the benefits in the silver and gold package plus the following;
- Business contract templates
- Expedited filing
- Domain name + business email
IncFile gives you value for money by making its packages as affordable as possible. They have a service starting from as low as 0$.
LegalZoom offers three formation plans; Economy has the slowest filing speed, the Standard package has a medium filing speed, and Express Gold is the fastest service. Again, the cost of each package depends on the business entity your company will use.
For example, when starting a Limited Liability Company, the Economy package costs $79. The price is not the same when forming a different business entity like a corporation, a non-profit corporation, a sole proprietorship, or a DBA. The Economy package starts at $149, while that of a non-profit or DBA costs $99.
If you choose to form an LLC, here are the services you get.
This basic package costs $79 and a processing time of 30days. Below are the services you will get;
- A comprehensive state and federal name availability search
- LegalZoom Peace of Mind Review
- State articles of association preparation
- LLC Filing
- Tax saving analysis
- Comprehensive LLC Welcome Packet
- All communication with the Secretary of State
- Processing all final paperwork for your business
- Digital Tracker
- LLC Next Steps Guide
- 1-2-1 Customer support
- 7- days a week, lifetime customer support
This plan costs $329 and has a processing time of 15 business days. This plan gets you the economy package services and the following;
- Founder’s kit
- Business newsletter
This plan costs $349 and has a processing time of 10 business days. The package gets you the services in standard package plus;
- LegalZoom VIP Processing
- Priority filing
- Express shipping
- Exclusive LegalZoom Discounts
IncFile LLC formation services are highly customizable. Even when you buy a silver package, you can still enjoy some Platinum services like expedite processing time by purchasing the service independent of the package. On the other hand, LegalZoom LLC formation services are more rigid.
Also, IncFile packages are by far very affordable. The silver package goes for $0; the Gold package goes for $149, and the platinum package $299. On the other hand, the LegalZoom services are a bit expensive. The Economy package goes for $79, the standard package costs $329, and the Express Gold package costs $349.
Comparing both LLC formation companies, you should go for IncFile if you’re looking for affordable yet quality services. However, if you have no problem going extra deep in your pocket, go for LegalZoom.
The price of a package is essential; however, the services you get in that package are vital. Both LegalZoom and IncFile have very similar services at different costs. Below is an overview of the services you get.
Below are the services that you can get from IncFile, either independently or in a package.
Employer Identification Number (EIN)/ Tax ID
It is a requirement by state law that every business must have an Employer Identification Number. EIN is the number that Internal Revenue Service gives to your company. The federal agency responsible for collecting tax uses this number to identify your business when you are filing your business tax returns. Additionally, since this number is unique, you need it when opening a business bank account, just like your social security number.
IncFile will obtain this number for your company for $70. However, if you purchase either the Gold or Platinum package, they will get the EIN for free.
Corporate Forms/ Bylaws Minutes
This service contains highly customizable templates of documents to help in recording, keeping, and staying compliant. Such documents include organizational minutes, bylaws, and operating agreements. This service will cost you $30. Otherwise, if you purchase a Gold or Platinum package, you will get this service for free.
This document shows the members who are supposed to open the bank account. Additionally, it shows those with authority to transact on the business bank account. IncFile creates this document at $35.
Business Contract Templates
This service offers you 25+ templates to help your business stay protected. A business attorney has drafted these business contracts. The service costs $150, but it is free to the Platinum package.
Free Domain Name and Email Service
Those who purchase the platinum service have one year of the free domain name and email service, after which they will have to renew or cancel the service.
Expedite Processing Time
If you buy the Silver or Gold package and wish to get the expedited filing time, you will have to pay a fee of $50.
Registered Agent Service
Every company must have a registered agent service. A registered agent receives official communications and legal documents from the state for the business. Every package that IncFile offers receives 1-year of free registered agent service. However, after one year, the service renews annually at $119 per year.
Professional Business Address
It is a state requirement that every business must provide a physical address. This address is different from the P.O. Box address we use. The business address shows the physical location of your company. IncFile may provide you with the physical address at the cost of $29 per month. This service helps mainly if your business is entirely based online.
Below are the services that LegalZoom offers, which you can only purchase independently. Remember that the packages of the LegalZoom are not customizable.
Registered Agent Service
As previously mentioned, the state requires every company to have a registered agent. The agent acts as the correspondence when the state wants to contact your business. LegalZoom will offer you professional services to ensure that you stay compliant with the laws at the cost of $249.
Essential Documents, Operating Agreement
This document explains the structure of the business, the financial and managerial rights of the business owners. LegalZoom will create this document for your business at the cost of $99.
Operating Agreement plus Employer Identification Number (EIN)
EIN, also called Federal Tax ID, is a unique number that the IRS gives and uses to recognize your company for taxation purposes. You must have EIN if you want to open a bank account or hire employers. LegalZoom will obtain the EIN for your business and create your business’s operating agreement at the cost of $159.
The Operating Agreement, EIN, and Licenses
Companies require business licenses and permits to operate in a particular field. Therefore, you need to search and find the necessary permits you need to get from the local, state, and federal governments. LegalZoom will search for licenses and permits required for your business, then create an operating agreement and obtain the EIN for you at the cost of $199.
This service offers you protection from employment and legal disputes. The smart employer also provides legal advice and 30 minutes consultations with an attorney on any work or legal issue. Additionally, it also has Legal and H.R. documents, for example, employment agreement and H.R. policies. LegalZoom offers this service for free in the first 10 days with your package, and then the service will renew at $39.99/month.
This service helps your business stay compliant with the state. Failing to remain compliant will expose you to the risk of being sued personally for your business’s actions. LegalZoom will help your business stay compliant by taking care of annual report filing and formalities. Total compliance is free for the first 10 days and then renew at the cost of $280 per year.
States require your business to file ongoing reports. LegalZoom will create your business annual report to help keep it compliant with the state and then file it with the state. LegalZoom offers two pricing services; standard at $55 + state fee and Rush at $75 + state fees. Rush offers speedy creation of the annual report, expedite filing, and express shipping.
LegalZoom offers a combination of LLC incorporation and Legal services. The legal services are in the category of wills and trust, real estate planning, and intellectual property protection. The cost of every service varies.
Both IncFile and LegalZoom offer very similar services. However, IncFile LLC formation services are very affordable compared to those of LegalZoom. For example, LegalZoom offers registered agent service for as much as twice the cost.
Customer Support and Reviews
As a new small business owner, you probably need to see the reviews of other people who have used the service. Again, their experience and customer support channels are vital and help you determine how well the incorporation service will offer a helping hand when you get stuck. Customer review, therefore, contributes to a larger percentage of whether you will choose a service or not.
IncFile has over 17,000 reviews on shopper Approved and a rating of 4.8. They have two customer support channels; phone support and email. The phone call support operates from 9 am to 6 pm from Monday to Friday. 95.4% customer rate IncFile with four stars and above. Here is a comment from a satisfied customer.
LegalZoom has 1002 reviews from site jabber and an average rating of 3.6. LegalZoom offers customer support through email and phone calls. The phone call customer support is available from 5 am to 7 pm on business days and from 7 am to 4 pm on weekends. 64% of customer reviews rate four stars and above. Here is a statement from a satisfied customer.
IncFile and LegalZoom have very positive reviews. However, IncFile has a higher favorable rating than LegalZoom.
Ease of registration
Most new business owners use incorporation services to eliminate the paperwork involved and reduce the registration process. Therefore, ease of registration when using a service is a concern.
IncFile features a bar on the left side of the registration process that shows the progress. The process begins with choosing a package and can take 15 to 20 minutes to complete. When selecting the package, you can customize it by choosing the services that best suits you.
LegalZoom registration is fast and tricky. The process does not start with the formation packages. Instead, they come at the end. The process takes 10 to 15minutes, and the bar above shows you the progress throughout the process. If you have difficulties choosing the best business entity for you, LegalZoom will help you out.
Comparing both IncFile and LegalZoom, the latter has a fast and straightforward process. In contrast, the former has many upsells throughout the process, exceptionally if you choose the silver package.
Pros and cons
Both of the services excel in their capacity, and that is why over 2 million customers have trust in LegalZoom and 500,000 businesses trust IncFile. Therefore, both have hits and misses in the course of running their business.
- They have very affordable prices.
- Offers 1-year free registered agent service
- IncFile no hidden fees
- Their packages are highly customizable.
- They have reliable customer support.
- The registration process is long and tiring.
- They have a lot of upsells
- They offer Legal services.
- It has tons of experience.
- Offers a payment plan
- Offers discount services if you hire them to obtain your EIN, create an Operating agreement and do a Business licenses search.
- They have a fast registration process.
- Their packages are costly.
- The packages are less customizable.
Choosing between two LLC formation companies that have competitive experience may not be a walk in the park. However, each sets its path to ensure that its customers get the best from its services. Here’s the takeaway.
1. Choose LegalZoom if you;
- Are you looking for experience?
- Want a payment plan
- Have interests in online Legal services
2. Choose IncFile if;
- You are on a budget
- Want the company with the highest positive rating
- You would love a cheap registered agent
- Want highly customizable packages