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 ZenBusiness and LegalZoom.
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 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.
ZenBusiness vs. LegalZoom: What’s the difference?
On the surface, LegalZoom and ZenBusiness 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 been in business for much longer than ZenBusiness, and has formed over 1 million businesses. But during that time, LegalZoom has accrued both good and bad reviews alike.
- As a Public Benefit Corporation, ZenBusiness gives back to support women and minority-owned small businesses with its Pay-It-Forward initiative.
- LegalZoom offers more expensive packages and sends more upsells your way during the order process, so it’s easy to spend more than you intended with them.
- ZenBusiness is far more affordable. You’ll save $40 or more by using their LLC services.
Both ZenBusiness and LegalZoom can help you create an LLC online. But to get a better idea of which is right for you, let’s jump into the specifics. If you’d like to get started or get a closer look at the winner of this comparison, visit ZenBusiness’ website.
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 ZenBusiness and LegalZoom. Each service has their own range of packages and price points; they’re pretty comparable in value. Let’s take a look at them.
- Starter: The next step up with ZenBusiness costs $39. For that price, you get their annual registered agent service and customizable documents, making it an excellent option (most competitors charge $100-$125).
- Pro: The pro package makes a jump to $149. That includes an EIN (important feature), their Worry-Free Guarantee (essentially a compliance assistance program), and a faster processing time.
- Premium: We don’t honestly recommend this package because it throws in a lot of extra offers that you may not need. And with a price of $249, it’s a lot of money for a new business.
- 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 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.
Ultimately, ZenBusiness is far more affordable and has better features. And while we’re not a huge fan of their highest-tier package, they are a much better value than 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 they’re relatively straightforward. ZenBusiness was a touch easier to navigate, though. Here’s the run-down of the two:
- Choosing a package: Just pick the right package for your business to get started.
- Up-sells: ZenBusiness does present a few extra up-sells throughout the process, which can be annoying. Thankfully, they are easy to navigate.
- Order time: When we tested the order process for ZenBusiness, we took just a few minutes to reach the final step.
- 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 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.
In our opinion, ZenBusiness is a bit easier to use simply because there are fewer up-sells to sort through and more straightforward packages.
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, ZenBusiness is a touch better than LegalZoom simply because it’s easier to get a hold of ZenBusiness. Here’s a summary of our thoughts on the customer service of both services:
- Types of support: ZenBusiness uses a web-based chat support for their customer support. You can also contact them via email or phone.
- Availability: ZenBusiness usually gives a prompt response if you contact them during their regular business hours: 10 a.m. to 7 p.m. EST.
- Quality of support: When we tested them, we found the representatives at ZenBusiness to be knowledgeable and prompt.
- Types of support: LegalZoom offers support via phone and email.
- Availability: LegalZoom has 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.
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.
LegalZoom has nearly twenty years’ experience, and during that time, they’ve stacked up a wide variety of good and bad reviews. ZenBusiness hasn’t been in business long, but their reviews are overwhelmingly positive. Here’s how the two stack up:
- Years in business: ZenBusiness was just founded in 2015, so it’s celebrating its fourth anniversary this year.
- Businesses formed: ZenBusiness has created thousands of business in their short time in business.
- Customer reviews: Customers have lots of good things to say about ZenBusiness, with excellent ratings on both Trustpilot and the Better Business Bureau.
- 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 spotty at best; you’ll find a wide variety of one-star and five-star reviews alike.
ZenBusiness has better reviews, but if you want a company with longevity, LegalZoom is a better choice.
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.
If you purchase the Pro package from ZenBusiness, then you are automatically subscribed to their Worry Free Compliance Guarantee. This program allows ZenBusiness to conduct an annual audit of your business to ensure that you meet your annual requirements. You can also purchase the program separately for $110 per year.
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.
So, which LLC service do we recommend?
Both ZenBusiness and LegalZoom are good options to form an LLC online. But as for our favorite, that honor goes to ZenBusiness.
ZenBusiness may be newer, but we love their combination of value and good customer reviews. (LegalZoom is a bit more expensive, and their reviews are mixed). Plus they’re a Public Benefit Corporation, too; we appreciate that they give back to their business community by donating to women- and minority-owned businesses each year.