You want to register 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 LLC formation services are LegalZoom and Northwest.
In this guide, we’ll give you a side-by-side comparison of these two options. 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 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. But that said, there are certain qualities that make one formation service better than another. Whenever we review LLC services, here are the 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. Northwest: What’s the difference?
On the surface, LegalZoom and Northwest 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 and Northwest both got started at the turn of the century, and both have helped form over a million businesses. LegalZoom serves both businesses and private legal needs, though.
- Northwest uses an unmatched customer service model and has some of the best prices available online.
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 Northwest. 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, 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: Northwest’s entry-level package is roughly half the price of LegalZoom’s—for just $49, they’ll file your formation documents for you. They also throw in a year of free registered agent service, but theirs costs $125 after the first year.
- Deluxe: The Deluxe package costs $149. For that fee, you’ll get everything in Basic, plus a Federal Tax ID and an operating agreement.
- Premium: This top-tier package from Northwest makes a jump to $199. That extra $60 gets you expedited processing.
This category isn’t even close: Northwest is a much better value. They have one of the best entry-level price points in the industry. It’s hard to beat $49. And to make that price even better, Northwest even includes a free year of registered agent service. LegalZoom’s similar service costs at least $159 extra. Their prices just don’t measure up next to Northwest.
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 Northwest 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: With Northwest, all you have to do to get started is pick between their Basic, Deluxe, and Premium packages.
- Up-sells: With Northwest, there aren’t any upsells! Their order form is as simple as it gets.
- Order time: There are really only three steps to ordering an LLC formation package with Northwest—choose your package, enter your business details, and pay for your order. That’s all there is to it, so it takes very little time.
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.
LegalZoom presents a lot of up-sells and third-party offers. Northwest doesn’t. LegalZoom is much more complicated; they put package selection near the end of their order form. LegalZoom’s pricing is also confusing; you can get a huge tab without much effort. Northwest 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.
Northwest and LegalZoom both have good customer support teams, but we have a strong preference for Northwest. 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: Northwest also offers support via phone and email.
- Availability: Northwest doesn’t post the exact hours for their customer support department on their website. However, when we tested their support, we received an email within 24 hours. We didn’t wait that long for our phone call, though (thankfully).
- Quality of support: Northwest fully delivers on their promise to provide next-level support. They might not respond as quickly as some competitors, but what they lack in speed they make up in quality. We received an extremely in-depth response. The whole experience was personalized to our needs.
LegalZoom’s customer support team gets the job done. Compared to a lot of other services, they might be tied or even come out on top. But next to Northwest, they come up a little short.
That’s simply because Northwest has our favorite customer support model in the entire industry. Nothing quite compares to having a personal representative dedicated to your business. So Northwest takes 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.
Both companies are nearly the same age: Northwest got started in 1998 and LegalZoom began in 2001. And both have an impressive customer volume, too. 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: Northwest is one of the oldest formation services; they joined the market in 1998.
- Businesses formed: Northwest boasts more than 2 million businesses formed.
- Customer reviews: For as well-established as Northwest is, they have very surprisingly few reviews online. That said, those reviews are overwhelmingly positive.
Both LegalZoom and Northwest have impressive records with a client base numbering in the millions. Both services have also been in business for at least twenty years. The two nearly come up tied; their online reviews are the deciding factor.
That’s why Northwest edges out LegalZoom for another win. LegalZoom’s feedback is across the board. But Northwest’s reviews are consistently positive. And that consistency gives us confidence that their track record is just a little bit better.
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 that form an LLC also 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.
Northwest offers two separate services for ongoing compliance assistance. One is their registered agent service, which costs $125 annually after your first year. You can also subscribe to their annual report filing service, which helps you meet all your yearly requirements.
So, which LLC formation website do we recommend?
LegalZoom is one of the biggest companies in the online incorporation industry. They’ve earned that reputation for a reason: they do a good job. company. They’re not perfect (who is?), but Northwest comes close to perfect in our opinion.
If we had to pick between the two, we’d pick Northwest every time.
We love the value of Northwest’s packages, and their customer service is second to none. It’s hard to compete with much lower prices and their no-nonsense business model. In fact, Northwest is at the very top of our list of formation services.