You want to set up an LLC. You have your vision, your business name, and the motivation to make your dream a reality. But you want some help getting started, so you’ve decided to hire a business formation service.
But that leads to a big decision: which service should you use? There are a lot of options available, but they’re not created equal. Two popular services are LegalZoom and BizFilings.
In this guide, we’ll give you a side-by-side comparison of these two services. Then you can pick the right service for you.
Rocket Tip: Looking for the best and most affordable LLC formation services? Compare the top 3 options (ZenBusiness vs Incfile vs Northwest) to see how they stack up.
Our philosophy: What makes a formation service “good?”
Ultimately, the “best” business formation service boils down to a matter of opinion. Which one is best for you depends on what you want from a service. But that said, there are certain qualities that make one formation service better than another.
Whenever we evaluate LLC formation services, here are some questions we like to ask:
- Does this service give me a good value for what I’m paying?
- Does this company have a proven record of supplying high-quality service?
- What is the quality of this company’s customer service?
- How easy is it to use this service?
- How quickly will my business be formed?
A good LLC formation service will receive high marks in these categories. We’ll consider the answers to these questions in our in-depth comparison below.
LegalZoom vs. BizFilings: What’s the difference?
On the surface, LegalZoom and BizFilings seem to accomplish the same purpose: helping you form your LLC. And while that’s true, the difference between them goes much deeper than that. We’ll give you our full analysis in just a moment, but here are a few key differences:
- LegalZoom has an impressive customer volume of more than 3.6 million customers. Over a million of those customers are businesses, giving them one of the most impressive client lists in the industry.
- BizFilings is backed by a large compliance firm, Wolters Kluwer. To that end, they offer specialized compliance assistance and even publication services.
Both LegalZoom and BizFilings can help you start an LLC online. But to give you a better idea of which is right for you, let’s jump in to the specifics.
Pricing and packages
Whenever you make a purchase, you want to know that what you’re buying is truly worth the cost. The same goes for LegalZoom and BizFilings. Each service has their own range of packages and price points; they’re pretty comparable in value. Let’s take a look at them.
- Economy: LegalZoom’s entry-level price points rings in at $99. For that fee, you’ll get a name availability check, a letter of financial authorization, and filing of your Articles of Organization.
- Standard: Standard makes a large money jump to a $329 price tag. With Standard, you receive all of the Economy features, plus 20 official membership certificates to use in your LLC. You’ll also get a corporate kit, which is an official, embossed binder and seal that’s been customized for your business.
- Express Gold: LegalZoom charges $349 for their highest package, but it doesn’t have much more to offer over the Standard option. The extra $20 really only buys you an expedited filing.
- Basic: The first package from BizFilings rings in at $99. It’s a pretty simple package, with a name availability search and filing of your business documents. They also throw in six months of free registered agent service. After the six months, registered agent service costs $164 per year, which also gets you access to their compliance tool.
- Starter: BizFilings uses a unique pricing model for their middle package: how much it costs depends on your state. Most states cost $229, but others range from $159 to $244. Regardless of the dollar amount, this package includes everything in Basic and a custom business kit and seal, expedited processing, and sample documents to use in your business.
- Complete: The Complete price also varies based on your state, ranging from $199 to $434. Most states will cost $359. This top packages gets you everything above and a Federal Tax ID (your EIN) and a certified copy of your documents. They also throw in a post-formation informational DVD. A few states get a few other documents, too.
If you’re looking for the cheapest business formation service, then BizFilings and LegalZoom aren’t the top choices. (ZenBusiness and Incfile are better). Both services have a so-so entry price. For us, a big plus is registered agent service: both LegalZoom and BizFilings offer the service, but only BizFilings includes it for free. That feature (paired with a few other package perks) gives them the advantage over LegalZoom.
How easy it is to use the service
Any business service is supposed to make your life easier, right? That’s why we always consider how easy it is to use a service when we evaluate them. After all, why would you bother paying someone to file your paperwork if it’s harder to hire them than it is to do it yourself?
We tested both services, and unfortunately, both have drawbacks. Here’s the run-down of the two:
- Choosing a package: Unfortunately, with LegalZoom, picking the package you want is a touch difficult; you pick your package after you’ve input some of your information and chosen a few add-ons.
- Up-sells: If there were a competition for which company offers the most up-sells and third-party offers during their order process, LegalZoom would win hands-down. It’s very easy to spend extra money after getting distracted with all the add-ons they offer.
- Order time: Once you get past the up-sells, it doesn’t take too long to finish your order. For example, it took us about fifteen minutes to get to the package selection stage. Then the rest of the process took a bit longer.
- Choosing a package: After you select your business type and your desired state, BizFilings lets you choose one of their three packages. You can also select any add-ons to round out your package if you’d like.
- Up-sells: BizFilings does offer a few up-sells throughout the order process. Thankfully, they’re not in your face. They do offer a few third-party options, too. There are seven different up-sells.
- Order time: Depending on how much planning you’ve done, you’ll need about 15 to 30 minutes to complete your purchase. One thing we really like about BizFilings is the fact that your order is automatically assigned an order number. So it’s easy to get assistance from customer service if you encounter any questions.
In our opinion, a good LLC service does two things: it employs a clean, straightforward order form, and it largely avoids up-sells and third-party offers.
With LegalZoom, the process feels backwards. You enter your personal information and select some add-ons, all before you choose a package. BizFilings puts the order form back in the correct order, but we’re not huge fans of their up-sells. There are so many “extras” offered that the order form gets cluttered. We have to call this category a tie.
Buying a product is one thing. But getting support for that product is just as important. After all, if a company doesn’t stand behind its product, why should you? But when a company helps you throughout the entire process—choosing a product, purchasing it, and keeping that product up-to-date—you’ll be happier with your purchase.
The same goes for business incorporation services. If they help you pick the package that’s right for you, assist you with the paperwork, answer your questions, and make it clear that they want to help you more than make money off you, you’ll keep using them. You might even recommend them to your friends.
BizFilings and LegalZoom have similar customer support models, and both get the job done. Here’s a summary of our thoughts on the customer service of both services:
- Types of support: LegalZoom offers support via phone and email.
- Availability: LegalZoom has very prompt service and great hours. On weekdays, you can reach them from 5 a.m. to 7 p.m. (PT) and 7 a.m. to 4 p.m. on weekends.
- Quality of support: When we tested LegalZoom’s customer support, we found their representatives to be quite helpful, especially via phone. (Email replies were more generic). The only thing we found annoying was that their customer service representatives also tried to make a sale during the process.
- Types of support: BizFilings offers support via phone, email, and a “leave a message” feature on their website.
- Availability: BizFilings has a pretty wide range of support availability; you can contact them on weekdays from 7 a.m. to 9 p.m. ET.
- Quality of support: When we tested the support at BizFilings, we found them to be professional, courteous, and helpful. They also make it really easy to use their phone tree and get through to a real human.
BizFilings takes the win in this category. When we tested both services, we found that LegalZoom fell short on the email responses. They took a long time to respond, and their response was pretty generic. But with BizFIlings, we got word back much sooner, and the answer was much more helpful. We give them the win here.
Company track record
Technically, there’s nothing wrong with using a new company to form your business. But working with an established, trusted brand gives you confidence. You can trust a company that has already served thousands of happy customers.
Between the two services, LegalZoom’s reputation is more impressive. It simply boils down to numbers. Here’s how the two stack up:
- Years in business: Founded in 2001, LegalZoom has been in business for close to twenty years.
- Businesses formed: LegalZoom has helped form over a million businesses (and they’ve served nearly 4 million customers in other legal avenues).
- Customer reviews: LegalZoom’s online reputation is mixed; you’ll find a wide variety of one-star and five-star reviews alike.
- Years in business: BizFilings first entered the business formation scene in 1996.
- Businesses formed: BizFilings has formed about 500,000 businesses, so despite being older than LegalZoom, they haven’t formed quite as many.
- Customer reviews: Even though BizFilings has formed a lot of businesses, they have a surprisingly small number of reviews online. We can’t even make a fair judgment of what their customers think.
LegalZoom takes the win in this category, but it’s not an overwhelming victory. To be perfectly honest, we think other companies in the industry have better records, especially in terms of customer reviews. LegalZoom has mixed reviews, and BizFilings just doesn’t have enough.
LegalZoom comes out on top simply because they’ve had more customers over the years. What they lack in reviews, they make up for with sheer numbers.
If you ever change your mind about a product you’ve purchased, you want to be able to return it, right? Unfortunately, with any business formation service, a full refund is impossible. That’s because part of the money goes to the state as their incorporation fee, and states do not refund those fees.
But occasionally, a customer changes their mind about a package they purchased. Perhaps they no longer want to subscribe to the registered agent service, or the company completes the process incorrectly. Each company has their own policy for refunds, and LegalZoom and BizFilings are no exception. We’ll summarize those policies here.
You can cancel your service with LegalZoom at any time (although some customers have noted that canceling can be a bit tricky). Refunds are also allowed if they fall under LegalZoom’s Satisfaction Guarantee and you make the request within 60 days. You can also exchange for a comparable service, too.
BizFilings has a strict refund policy: they’ll only grant you a refund if you request it before they start working on your documents. And even then, they charge you a $50 convenience fee. So for all practical purposes, you may as well not buy a package from them unless you’re absolutely sure it’s right for you.
Assistance with ongoing compliance
Starting a business takes a lot of time and effort, but so does maintaining it! Each state is a little different; some require annual reports, some require you to renew your license each year, and more. Keeping track of these requirements can be confusing.
That’s why a lot of services help you with ongoing compliance. But just how much help you’ll get depends on what service you choose.
For $69 per year, you can subscribe to LegalZoom’s Compliance Calendar program. This service helps you stay up-to-date with your due dates by alerting you so you can get them filed on time. You can also subscribe to additional services that will complete this report for you, if you’d like. They also offer registered agent service for $159-299 per year.
BizFilings offers registered agent service and annual report services. They charge $164 for registered agent. The price for their registered agent service varies based on your state. And to top it off, BizFilings can also help you with publication service; they’re one of the best options in the industry for this service.
So, which service do we recommend?
If we run a tally of the categories, both BizFilings and LegalZoom come up with a few wins. But in our opinion, BizFilings wins where it counts: the pricing and value category.
For most entrepreneurs, the budget is a critical factor, and BizFilings is the much better option for pricing. Since they include registered agent services, LegalZoom just can’t compete with them on the price front.
That said, LegalZoom is a powerhouse in the business formation industry. So if you prefer their track record, then they’re a good option in their own right. We just think BizFilings is a better option for most entrepreneurs.
Alternatively, you can check out your other options through our comparison guide of the 3 most affordable and top LLC services.