You want to start a Limited Liability Company. 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 Incorporate.com.
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 an LLC formation service “good”?
Ultimately, the “best LLC formation website” 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 an LLC formation service, 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. Incorporate.com: What’s the difference?
On the surface, LegalZoom and Incorporate.com 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.
- Incorporate.com may not have as many customers as LegalZoom, but they are much older. They’re the oldest company in the industry, actually—their experience dates all the way back to 1899.
Both LegalZoom and Incorporate.com can help you create an LLC online. But to give you a better idea of which is right for you, let’s jump into the specifics.
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 Incorporate.com. 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.
- Starter: The first package from Incorporate.com rings in at $99. Unfortunately, though, that price only gets you the bare minimum: they’ll file your formation documents for you and give you online access to those documents. That’s all.
- The Essentials: Incorporate.com’s next package is a bit confusing. On the surface, it seems to include registered agent service and annual report services for a total price of $249. But that’s actually the base price of the package, not those services. You have to buy those services to truly use the package features, so the real price is $634. That price gets you the following: an EIN, a business kit and seal, access to their compliance dashboard, and annual report service.
- The Works: The top Incorporate.com package is like the Essentials: you have to purchase both extra services to make it worth the trouble. That drives the sticker price up from $349 to $734 in total. For that extra fee, you’ll get a custom operating agreement and a business license research program.
If you’re looking for impressive price points, then you’ve found them…but not in a good way. $734 is certainly an impressive price, but that’s from sticker shock! Both LegalZoom and Incorporate.com fall a bit short in the pricing category.
Their $99 entry packages seem fair, but neither package has enough features to justify that price. Once you get past the entry-level offerings, Incorporate.com’s prices get scary. LegalZoom’s upper packages are hundreds of dollars cheaper, so they beat Incorporate.com in this category.
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 are a bit confusing. 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, Incorporate.com lets you choose between one of their three packages.
- Up-sells: There are seven different up-sells to navigate through with Incorporate.com. It’s easy to wrack up a large tab this way.
- Order time: Since the web design of Incorporate.com is clean, it takes very little time to complete the order. Usually, you can finish the process within ten to fifteen minutes.
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.
With LegalZoom, the process feels backwards. You enter your personal information and select some add-ons, all before you choose a package. Incorporate.com puts the order form back in the correct order, but their pricing is misleading. Whenever you don’t know exactly what you’re spending and why, little red flags should go up in your mind. They certainly do in ours.
Because neither service is straightforward, 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 company 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.
Incorporate.com 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: Incorporate.com offers support via phone, chat, or email.
- Availability: Incorporate.com doesn’t list their exact customer support hours on their website, either. We did find that we got quick responses during daytime hours for phone and chat support. Email usually has a 24-hour turnaround.
- Quality of support: Incorporate.com’s customer support team is prompt and professional. When we tested their customer support experience, we got a knowledgeable answer to our question. They even gave us some additional information, too.
This category is another close call. You get similar quality in their answers, and they’re both pretty accessible. For us, the primary difference between Incorporate.com and LegalZoom is how quickly you get a response. We tested both, and we found that Incorporate.com’s responses were a touch faster than LegalZoom. For us, that’s enough to give them the win.
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.
- 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: Incorporate.com is the only company in the business formation industry that’s been around for more than 100 years; they started out in 1899.
- Businesses formed: Incorporate.com hasn’t formed as many businesses as LegalZoom, with just 750,000 formations to their name.
- Customer reviews: Oddly enough, Incorporate.com doesn’t have many external online reviews. We could only find a couple dozen, and most of those were negative reviews.
We’ll be honest: neither company impresses us in this category. Sure, Incorporate.com has been around for more than a century. And LegalZoom has more clients and more online reviews. But both companies have mixed reviews, so we have to call this category a tie.
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 Incorporate.com 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.
The refund policy at Incorporate.com is incredibly vague. For example, here’s the wording they include on their website: “If you cancel your order before we have submitted it to a federal, state, or local office, Incorporate.com will refund the total amount paid for such order less a service fee. If you cancel your order after we have already submitted it, we will use our discretion to determine what portion, if any, we will refund.” So do they ever give refunds? How large is the service fee? We’re not quite sure.
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.
Like LegalZoom, Incorporate.com provides registered agent services and an annual report service. But there’s a big downside: these services are expensive, and they’re not included in any of their formation packages. Bought separately, the registered agent service and annual report service cost $235 and $150 respectively.
So, which service do we recommend?
Here’s the short story: we don’t really recommend these services to a majority of our readers. They’re both near the bottom of our list of services. We prefer services like ZenBusiness and Incfile, honestly.
Of these two, though, we prefer LegalZoom for LLC formations. They’re a slightly better value, their refund policy is more flexible, and their ongoing business compliance features cost less.
Alternatively, we recommend checking out your other options through our comparison guide of the 3 most affordable and top LLC services.