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 Northwest and Direct Incorporation.
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” 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 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.
Northwest vs. Direct Incorporation: What’s the difference?
On the surface, Northwest and Direct Incorporation seem to accomplish the same purpose: helping you form your LLC. And while that’s true, the difference between them goes deeper than that. We’ll give you our full analysis in just a moment, but here are a few key differences:
- Northwest has the best pricing in the entire industry. You won’t find better price points anywhere else.
- Direct Incorporation takes a unique approach to business formations: on top of filing your formation documents, they can also help you set up a website, design a logo, and more.
Both Northwest and Direct Incorporation can help you create an LLC. We honestly like both, but each company serves two different kinds of entrepreneurs. Which one is right for you depends on your budget and your needs. So, 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 Northwest and Direct Incorporation. Northwest offers valuable packages that truly give you more for your money. Meanwhile, the packages from Direct Incorporation are pricier but jam-packed with unique features. Let’s take a look at those packages:
- Basic: Northwest’s entry-level package rings in at a very competitive $49. For that price, 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 $50 gets you expedited processing.
- Standard: Direct Incorporation starts out its offerings at a price point of $147. It’s definitely pricey compared to Northwest’s opening package, but it does include some interesting options. For this price, you’ll get a business name check, filing for your formation documents, and an EIN. They also throw in a three-week trial to their Executive Club and six months of registered agent service.
- Premier: The next package jumps to $297. You’ll get everything in the standard package, plus a corporate kit for your business. That gives you an embossed binder and a custom seal. You’ll also get sample documents like membership certificates and an operating agreement.
- Elite: Elite makes a $32 price jump for a total cost of $329. But that extra $32 gets you a lot: access to their website builder, five free business email accounts, and a stock logo for your business (which you can use under the terms of a shared license).
- Venture: Venture brings a pretty hefty price tag—$873—but it’s jam-packed with features. Instead of a website builder and stock logo, you get a professionally designed website and logo (plus exclusive rights to those graphics). You also get 12 months of their Executive Club and trademark protection service. If you want to establish a powerful brand image from the get-go, then Venture may be the package for you.
- Venture Plus: There is one last package offering of Venture Plus, but it’s probably well beyond what most people need. It includes everything above and adds a subsidiary entity filing, a DBA, and a second trademark or copyright filing.
As you can see, Direct Incorporation offers a wide variety of packages. And those packages come with fairly big price tags. But aside from their entry-level package, we think those prices are fair. You get a lot of unique features that no other services offer. If you need those features and your budget allows, Direct Incorporation might be the perfect choice.
That said, we prefer Northwest for the majority of our readers. The dollar-to-feature ratio you’ll get with every single one of their packages is unbeatable. If your budget is tight—and what entrepreneur’s budget isn’t?—then Northwest is the better choice for you.
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 they’re both relatively straightforward. Here’s the run-down of the two:
- 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.
- Choosing a package: Direct Incorporation directs you to choose a package after entering some information about yourself and the type of business you wish to form. If you’re not sure which package you want, you can hit their “Compare Packages” link to learn how their offerings stack up.
- Up-sells: With Direct Incorporation, there aren’t really any up-sells or third-party offers to navigate through. What comes in your package is what you get.
- Order time: There are really only four steps to complete in your Direct Incorporation order. Most customers spend about ten minutes ordering their package, but if you have a bigger package, the process may take a bit longer.
Both Northwest and Direct Incorporation are easy to use. Another big plus is that both services avoid third-party offers or up-sells. To be honest, it’s impossible to declare a winner. This category is 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 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.
In our opinion, both Direct Incorporation and Northwest have good customer support teams, but we do have a strong preference. Here’s a summary of our thoughts on the customer service of both services:
- 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’ll be your contact whenever you have questions, so you’ll get advice from someone who understands your business situation, not a phone grunt.
- Types of support: Direct Incorporation also offers support via phone and email.
- Availability: Direct Incorporation’s hours for customer support are pretty wide: 9 a.m. to 6 p.m. ET.
- Quality of support: Direct Incorporation has a general support line through both phone and email, and they provide quick, helpful service. But here’s what we like best: they list contact information for each member of their team on their website. So if you need specialized assistance, you can get in touch with the best support staff easily.
We like the customer support models for both Direct Incorporation and Northwest. Direct Incorporation makes it easy to contact a specific representative, and Northwest gives you a personal representative. That makes this category a pretty close call.
But at the end of the day, we like Northwest’s personalized approach better. In an industry that’s all online, a personal touch is a breath of fresh air. That’s why Northwest edges out Direct Incorporation for another 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. You can trust a company that has already served thousands of happy customers.
MyCorporation and Northwest both have excellent track records, but each service shows that track record in slightly different ways. Here’s how the two stack up:
- 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. They are mostly positive, though.
- Years in business: Direct Incorporation first opened its doors in 2003, so they’re a fair bit younger than Northwest.
- Businesses formed: Direct Incorporation has helped create more than 80,000 businesses. They’ve also hosted more than 5,000 websites.
- Customer reviews: There aren’t many online reviews for Direct Incorporation. There are more positive reviews than negative ones, though.
This category is another close call: both companies are well-established. And neither have a lot of reviews online. So we needed a tie-breaker: years in business. So Northwest takes another win.
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 Direct Incorporation and Northwest are no exception. We’ll summarize those policies here.
We’ll let Northwest speak for themselves here: “We will not take your money twice, and if we screw something up, we will give your money back.” Much like they have excellent customer support, Northwest makes it their priority to serve their customers, not get money from you. So if you’re ever disappointed with their service, you can get a refund (minus any non-refundable state fees). You do have to request it within 60 days, however; there’s a $25 fee.
You can request a refund from Direct Incorporation at any time, so they’re a bit more flexible than Northwest. However, the drawback is their $40 convenience fee; it accompanies any refund request you make.
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.
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.
Every package offered by Direct Incorporation also has six months of free registered agent service. You can contact them for a quote of how much this service will cost when the trial expires. They also offer annual report services for $75.
So, which service do we recommend?
At the end of the day, both services are great options…for different people. Direct Incorporation is best for entrepreneurs who want it all: a website, a logo, and more.
But budget is a big component of any start-up; that’s why Northwest is our first recommendation for most of our readers.