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 Incfile.
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 LLC 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 review LLC formation services, here are the questions we 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. Incfile: What’s the difference?
On the surface, LegalZoom and Incfile 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.
- Incfile offers a $0 entry-level formation package; it’s one of the best price points online.
- Incfile promises to process every single business formation within one business day—no expediting fee necessary. They’re your go-to if you need to get your business started quickly.
LLC 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 Incfile. Each service has their own range of packages and price points – 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, 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.
- Silver: Incfile’s most basic package starts out at $0; for that price, they’ll file your LLC formation documents with your state. They also throw in a year of free registered agent service, which normally costs $119 a year.
- Gold: The next package costs $149, and that jump gives you everything in Silver plus a Federal Tax ID and several important documents, such as an operating agreement and a banking resolution.
- Platinum: The top Incfile package costs $299; it adds expedited processing (at the state level—Incfile already does everything they can to process your business quickly) and more to the Gold package.
This category isn’t even close: Incfile is a much better value. Their entry-level package is half the cost of LegalZoom’s, and it includes a lot more. A big plus for Incfile is that they include registered agent service for free for a year. LegalZoom never includes this service in their packages, and if you buy it à-la-carte, you’ll spend at least $159. They just can’t compete with Incfile.
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 Incfile is much simpler to use. LegalZoom’s order process seems a bit backwards to us. 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 state of formation, all you have to do is select which of Incfile’s three packages you want to use. After that, Incfile provides helpful links and extra information to help guide you through the process.
- Up-sells: Incfile does present a few extra up-sells throughout the order process; they’re extras or third-party offers from their business partners. Thankfully, they’re pretty easy to navigate through. And if you do opt-in to one, your price updates automatically to prevent any surprises.
- Order time: With Incfile’s guidance and simple order process, it takes a matter of minutes to complete your order.
In our opinion, a user-friendly service does two things: it employs a clean, straightforward order form, and it largely avoids up-sells and third-party offers.
Both Incfile and LegalZoom present a few third-party offers and up-sells. But with Incfile, they’re much more understated. You can easily accumulate a hefty tab with LegalZoom’s up-sells. LegalZoom also complicates their order form by putting package selection near the end. They even present add-ons before the package selection screen, so you don’t even know what you’re adding on to. Incfile’s model is much simpler, so they take another easy win in this category.
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 formation 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.
Incfile 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: Incfile offers phone and email support to their customers.
- Availability: Incfile’s support responds promptly if you contact them during their business hours of 9 a.m. to 6 p.m. CST (weekdays only). After-hours requests are answered in a timely manner, too. For example, when we sent in an email after business hours, we got an answer by 10 a.m. the next day.
- Quality of support: We tested the phone and email support features offered by Incfile, and we found their representatives to be quite helpful. That said, we got a more in-depth response with their email support than we did over the phone.
This category is pretty close, but Incfile edges out LegalZoom with slightly faster response times. If you browse customer reviews for both companies, you’ll probably find that customers also have a better opinion of the representatives from Incfile, too.
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.
The difference between these two companies boils down to experience against reputation. LegalZoom has more experience, but Incfile has better customer reviews. 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: Incfile was just founded in 2004, so it’s celebrating its fifteenth anniversary this year.
- Businesses formed: Incfile has created more than 250,000 businesses since its inception.
- Customer reviews: Incfile has the one-up on LegalZoom in terms of how many positive reviews they have online; you’ll find thousands of positive reviews online and only a few negative ones.
LegalZoom and Incfile come up tied in this category. On one hand, LegalZoom blows Incfile away with their sheer number of clients. Meanwhile, Incfile clearly wins out on customer opinion. Ultimately, it’s up to you to decide whether you’d rather work with a company that has lots of experience or the company that other customers like more.
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 Incfile 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 cancelling 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.
If you decide to cancel your services from Incfile, you’ll need to do so quickly; Incfile only offers refunds if you cancel before they transfer payment to the state. So basically, if Incfile has already processed your order, then you can’t get your money back. Your refund will be your full purchase price, minus a $30 cancellation fee.
Assistance with ongoing compliance
Starting your 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.
No matter what package you purchase with Incfile, you receive automatic notifications for important due dates for your business. That said, you do need to keep your email address up-to-date so you’ll receive those notifications.
So, which LLC creation service do we recommend?
Both Incfile and LegalZoom are well-established companies that can be a big help in getting your business up and running. However, Incfile is probably the better option for most of our readers.
In our opinion, LegalZoom just doesn’t measure up to Incfile. And that’s okay; Incfile is one of the top services in the industry. They offer good value, excellent customer service, and good assistance with your business after your purchase. We’d recommend them to all of our readers.