Some small business owners in the United States prefer to focus on growth and development and leave the legal aspects of their business unattended. This is a strategic mistake, even if their tactics may initially seem to work.
As a small business owner, you may have already resorted to online legal aides like Incfile or Legalzoom to help you form your LLC. Needless to say, this is the most popular small business entity. Every business operation a business entity needs to undertake is regulated by a separate contract or agreement. And each of these documents has its price.
In this post, I shall be looking at LegalZoom and Incfile, two of the trendiest online legal services providers right now. They can help you to easily resolve day-to-day issues without having to hire an in-house attorney.
Our key takeaway after extensive research on Incfile vs. LegalZoom is that Incfile has much more of a specialism in small business formation and compliance while LegalZoom has a broader array of legal services without the same focus on business formation.
Let’s get down to business and see what LegalZoom and Incfile have in common, and how they differ.
Incfile vs. LegalZoom: Key Services
While Incfile and LegalZoom both provide new business formation services and registered agent service, LegalZoom also provides filing for a partner, copyright, or trademark, while Incfile does not. When it comes to tax return preparation and filing, Incfile is the obvious choice. LegalZoom is yet to include this service in its portfolio.
Bothe LegalZoom and Incfile provide comprehensive business compliance services depending on the state of registration. In contrast to Incfile, LegalZoom offers its customers custom legal forms. If you need, LegalZoom can put you through to an attorney, while Incfile still does not provide this type of legal service.
While Incfile and LegalZoom both provide registered agent service online, each platform addresses different issues. Incfile is best for initial business formation, tax returns, and compliance procedures. LegalZoom’s portfolio of legal services is more comprehensive.
In addition to registered agent service, business formation, and compliance services, the company also offers trademark & partnership filing services.
LegalZoom vs Incfile: Basic Plans Comparison
Let me now take a closer look at each of the legal services that IncFile and LegalZoom provide and how much each service costs.
Incfile vs. LegalZoom LLC Formation
Incfile and LegalZoom both offer premium business formation services beyond the standard LLC startup package. You can purchase some of the features a-la-carte, depending on the specific needs of your small business plan.
A quick side-by-side comparison of Incfile’s and LegalZoom’s basic plans reveals that Incfile provides a more affordable LLC formation service. For example, Incfile processes customer orders within 24 hours and you only have to cover the state fee.
With Incfile’s LLC formation package you also get a full year of free registered agent’s
service. In contrast to Incfile, LegalZoom can take up to 30 days to process an order. Incfile provides one free year of registered agent service. After the first year, Incfile’s registered agent service is going to cost you $119 a year, while LegalZoom charges $159 extra per year.
If you need an operating agreement, Incfile is going to prepare one for just $40, while LegalZoom charges just under $100 for the same service. At a first glance, LegalZoom offers EIN registration for $60 extra, against Incfile’s $70 extra charge. However, you can buy this service a-la-carte from Incfile, while LegalZoom only offers it in a bundle with Operating Agreement. The total cost thus amounts to $159.
The basic plan of LegalZoom does not include any legal consultations on the phone, while Incfile’s basic package includes a 30-minute phone conversation with an attorney per month.
Incfile vs: LegalZoom Mid-tier bundles
Looking at the mid-tier plans of Incfile and Legalzoom, I do not see much difference from their basic packages. Incfile still processes orders on the next business day, but LegalZoom’s order processing time has been cut by half from 30 to 15 days.
I have noticed that the mid-tier plan of Incfile includes $20 per month worth of web hosting service, while no such service appears in LegalZoom’s mid-tier bundle.
Operating Agreement & EIN
Most importantly, the operating agreement and the EIN issuance service are included in Incfile’s Gold Plan, whilst you will still need to pay $159 extra with LegalZoom’s mid-tier bundle.
LegalZoom vs Incfile: Extra Kits
LegalZoom’s Standard package currently costs $329 a year and includes a Corporate Kit. But why is corporate kit important? Well, this specially-tailored suite can help your small business earn a strong online reputation.
LegalZoom’s middle plan includes 20 stock or membership certificates customized with your LLC’s business details. It also includes a heavy-duty embosser to put a personalized seal on official correspondence.
Incfile provides a Custom LLC Kit with their Silver pricing option. Its price starts at $149 per month. The Custom LLC Kit gives access to Incfile’s library of different contract templates that can satisfy the need of every small business. On top of that, you also get 20 customized stock certificates.
LegalZoom’s Corporate Kit is far more diversified and versatile than Incfile’s Custom LLC Kit, but it is therefore far more expensive.
Incfile Vs Legal Zoom: Top Tier Plans
LegalZoom’s top-tier package is called Express Gold and costs $349 per month, plus state fees. Incfile’s Platinum package costs $299 per month plus state fees. Honestly, I don’t see much improvement from Incfile and LegalZoom’s mid-tier bundles here.
Incfile offers business Contract Templates, expedited filing, and a business domain name plus business email with their priciest plan. By contrast, LegalZoom only offers faster shipment and processing times. Amazingly, the processing time that LegalZoom provides with their priciest option is ten business days.
Incfile vs LegalZoom: processing times
There isn’t a straightforward answer to the question why LegalZoom’s registration times are so much longer than Incfile’s. It appears that Incfile’s only files LLC and other business registration forms online. Plus, they offer only a limited number of formation services that normally take between 24 and 48 hours to appear in the state registrar.
LegalZoom acknowledges that some states may take longer to process articles of incorporation and other business formation documents. If we consider that government processing times vary considerably from state to state, I think that LegalZoom’s listed terms of incorporation are far more realistic than Incfile’s.
LegalZoom provides on-paper business incorporation services, as well as online services. However, due to recent budget cuts, many state administrations take much longer to process standard business incorporation paperwork.
Incfile vs Legal Zoom: Other business formation services
In addition to LLC formation, Both LegalZoom and Incfile provide S corp, C corp, nonprofit, and sole proprietorship formation services. The main difference between S-corporation or C-corporation and an LLC is that when you form a corporation you are going to have shareholders.
Small business owners normally start by forming a c-corp and after that file a special form with IRS to become an S-corporation. Should you ever need to change the status of your business back to a C-corp, you are going to need the consent of the majority shareholders.
Incfile’s s-corp and c-corp formation services are offered with its Silver, Gold, and Platinum packages, with the last plan providing the best value for your money. To get the final price, you add the filing fees of the state where you wish to have your business formed to the price of your plan.
LegalZoom’s s-corp and c-corp formation fees start at $149 plus the state filing fee. You have to first tell LegalZoom your business name, take their standard survey and let the company’s experts take care of the paperwork.
On the whole, I could not establish how much a corporation formation is going to cost me with LegalZoom. Therefore, I give Incfile an extra point for their transparent pricing policy
Incfile vs LegalZoom: Compliance & IRS Filing
Both platforms provide Compliance and IRS filing services. Incfile can prepare your company’s annual report and certificate of good standing and help you get an EIN or Tax Number. You can rely on Incfile to do your business accounting and file an S-corp election for you.
LegalZoom’s portfolio of filing and compliance services appears to be more diverse than that of Incfile. This online legal advisor also provides business dissolution filing, corporate amendment filing, etc. Its attorneys will take care of the applications for all licenses that your business may need, and their tax experts can file your company’s 501(c)(3) application.
Incfile vs Legal Zoom: Key Differences
So far, I have highlighted the main features that Incfile and LegalZoom both share. Now, I’d like to emphasize some important differences between the two online legal service providers.
Intellectual Property Services
Authors and artists should definitely choose LegalZoom for an online legal consultant because the company offers a comprehensive set of intellectual property services. LegalZoom can find the best trademark for your business and help you register it in compliance with your state’s requirements.
After that, the company’s attorneys will be monitoring your trademark for possible infringements. I was pleased to find out that it only takes 15 minutes to file a statement of trademark use on LegalZoom’s website.
You should renew your trademark every nine years, but with LegalZoom’s Compliance Calendar, you can rest assured that you are never going to miss an important application deadline again. LegalZoom charges $149 to complete a Section 9 Renewal Form, but you will also have to pay $525 per class.
Personal Legal Service
LegalZoom provides a wide variety of personal legal services in three main categories:
- Wills & Trusts
- Family matters
- Real Estate consultations
Against a one-time fee of $179, some of LegalZoom’s network attorneys can help you create your estate plan. The company’s Basic Last Will Package costs $89, while the Comprehensive Last Will costs $99.
The estate plan bundle appears to be the best value for your money because it includes three essential documents: Last Will, Financial Power of Attorney, and Living Will. LegalZoom’s attorneys can also prepare all the necessary documents for your marriage, divorce, or name change. They can also write a lease agreement or a property deed, should you need any of these two documents.
Incfile vs Legal Zoom: Ease of Use
Legal Zoom’s landing page is very well organized, but because they offer so many different legal services, you may spend quite some time looking for the service you need. Incfile, on the other hand, has everything laid out on a neat dashboard.
The client dashboard is your main document repository and management tool. It is easily accessible with the order number and the email address associated with it. On the whole, I find Incfile’s platform easier to use and navigate.
LegalZoom vs Incfile: Customer Support
LegalZoom’s customer service agents are all based in the USA. They are reachable over the phone from 5 am to 7 pm Pacific Time from Monday to Friday, and from 7 am to 4 pm Pacific Time at weekends. On the whole, they are very polite and knowledgeable, but the wait times are a bit too long for my liking.
Incfile’s customer service agents are available Mon-Fri from 9 am to 6 pm CST. Unlike LegalZoom’s customer support, Incfile’s customer service representatives are not available at weekends.
You are very likely to find the answers to all of your questions in Incfile’s Learning Center. This is a massive knowledge base full of useful forms, online tools, DIY guides, and other resources. They are grouped into three main categories:
- Business Start-up
- Business formation
- Business Growth
Incfile vs LegalZoom: Final Verdict
Both Incfile and LegalZoom offer comprehensive registered agent services. However, Incfile is more focused on business formation and compliance, while LegalZoom appears to provide more complex and comprehensive legal advisory.
Because LegalZoom tries to cast a wider net, they earn controversial online user reviews. Some users like their services, others mention that there are plenty of cheaper alternatives.
Incfile has a more focused approach. They may offer fewer services, but they are just enough for your small business. On the whole, I like Incfile’s transparent pricing and easy-to-use website. If you are just starting your business, Incfile will be your reliable partner!