Business owners increasingly look to incorporation services to handle the formation process's hassle. If you're forming a company but feel lost in a sea of paperwork and legislation, an online filing company is ideal for you. This way, you have peace of mind and assurance that everything is done correctly before starting a business.
Direct Incorporation and Legal Zoom are two big industry names with many similarities but key differences. Let's take a look to see which is best for you.
Direct Incorporation vs. Legal Zoom: The Verdict
These service providers have a lot of similarities and overlaps. For example, both are better business bureau accredited. They can help you set up essentially any business entity. If you're looking for a more affordable package, Legal Zoom is great for you.
However, the Direct Incorporations Executive Club is a big selling point, especially for small businesses that wouldn't otherwise have access to personal advice from accountants and lawyers. All of your business needs are catered for by both.
While legal services aren't directly offered by legal zoom, you can avoid or delay hiring a law firm for quite some time by relying on the knowledge offered by this attorney-run business.
Choose Legal Zoom If:
- You want a more experienced service provider.
- You want easy access to legal advice.
- You want additional services (for a fee), such as operating agreement preparation.
Choose Direct Incorporation If:
- You want better-rated customer support.
- You want faster turnaround times.
Services Offered & Pricing
Key Similarities
- They cater to a similar price point.
Key Differences
- Direct Incorporation offers better, expedited turnarounds.
- Legal Zoom offers additional services on an A la carte basis.
LegalZoom Packages & Pricing
Economy Package - $79
The Economy package costs $79. You get state business registration at this level, but the filing fees are extra. You will also receive guides to assist you with your document reviewing and guide you throughout the steps to take, along with a personal assessment of your documentation.
You have access to create your Articles of Organization and a financial account authorization letter, which will provide permission from the business to a person to open bank accounts for the company. Finally, you receive access to customer support.
Standard Package - $329
The Standard Package costs $329. You get everything from the Economy package, along with an organizer embossed with your company name, company membership certificates with your company seal for ownership recording, and VIP processing.
Express Gold Package - $349
The Express Gold package is $349. At this level, you receive everything from the other two packages and rush processing with the state and express shipping.
The advanced processing options with the Standard and Express Gold packages mean it takes less time to process any filings you make with the state.
In addition, the express shipping from the Express Gold package enables you to get anything you order from LegalZoom through the mail in less time. These shipping options can be critical and mean the difference between getting what you need in time to open your business doors, so it is well worth considering when choosing a package.
Direct Incorporation Packages & Pricing
Five packages are available, including Standard, Premier, Elite, Venture, and Venture Plus. The Standard Package starts at $147.00. Expect higher-priced packages to have more features and branding services such as web design and trademark protections, among other selling points. Yet, all five of these packages include the following:
- Live client support
- Business name availability search
- Online document storage
- Registered agent service (6 months are free)
- Articles of Incorporation or organization
- S-Corp election prep for S-Corps
- EIN obtainment (employer identification number)
Broken down per Package, the services included for each are listed below, and all prices do not include state fees.
Standard Package - $147
- Name availability
- Online storage
- Six-month free registered agent service
- Preparation and filing of articles of incorporation or organization
- Domain name securing
- S-Corp tax designation
- Client Resource Center
- Three weeks Executive Club trial
Premier Package - $297
- Everything from the Standard Package
- Operating agreement
- Corporate suite CD
- LLC kit and seal
Elite Package - $429
- Everything from both the Standard and Premier package
- Website builder tool
- DIY website builder software
- One year domain name registration
- Three months of free website hosting
- Five free email accounts
- Stock logo
Venture Package - $873
- Everything from the Standard, Premier, and Elite packages
- Web design service (they will build the website for you instead of providing the DIY website builder software)
- Custom logo design
- One year Executive Club subscription
- One year website hosting
Venture Plus Package - $1,495
- Everything from the Standard, Premier, Elite, and Venture packages
- Second trademark or copyright
- Subsidiary entity filing or DBA name
- U.S. business address
- Organizational meeting live support
- Annual meeting live support
Document Management & Online Experience
Key Similarities
- Easy to use online document management system.
Key Differences
- Legal Zoom upsells products, which can be irritating and make the site harder to navigate.
- Direct Incorporation is registered with Authorize.net, which provides additional verification and security for your peace of mind.
Both Legal Zoom and Direct Incorporation allow you to manage your documents online, and both are relatively easy to navigate; however, when considering ease of use, Legal Zoom's site is a little more arduous to navigate, with extra steps and attempts to upsell plaguing the site.
Processing Time
Key Similarities
- Expedited processing times for a fee.
Key Differences
- Direct Incorporation is typically faster (though exact times vary depending on your state).
- Legal Zoom has received complaints about taking longer than the specified processing time.
Direct Incorporation's exact processing time varies by state but is still usually faster than Legal Zoom's processing time, which can take up to 30 business days. Higher-priced packages are typically quicker, and Direct Incorporation also allows you to expedite the process for an additional fee.
Compliance & Track Record
Key Similarities
- BBB accreditation.
- Both companies have a decent track record for compliance.
Key Differences
- Direct Incorporation has better customer reviews online.
In 2010, they were ranked 209 on Inc 5000 Business Service category as one of America's fastest-growing companies.
Direct Incorporation has an A-plus rating from the Better Business Bureau and has been accredited since 2005. Also, they score a four out of five in their 42 Facebook reviews. Legal Zoom is also BBB accredited.
LegalZoom has a decent track record for compliance. It creates legal documents that work for the intended purposes. Legal compliance with various states is a top priority to ensure that you get the documents you need and that the state will accept.
Customer Service
Key Similarities
- They cater to similar business hours.
- Knowledgeable, helpful customer support teams.
Key Differences
- Legal Zooms pricing is shrouded in mystery, and this harms the customer support experience.
- Direct Incorporation allows you to contact individual employees, directly saving you time and effort.
Both service providers have dedicated, knowledgeable teams that will help with all of your inquiries. Overall both are great, and they're accredited with the BBB, so you can be assured that you'll be well looked after if you purchase a business formation package with either. With that said, Direct Incorporation allows you to contact individual employees who will prevent you from being left on hold or passed around from person to person.
Structure Breakdown
Now let's look at each business structure and see which professional service is ideal for you.
Though both are top contenders for the best LLC services, Direct Incorporation wins in this category.
If you want to be an individual owner of your company, Direct Incorporation can offer you any one of their leveled packages. You will get the best of a C-Corporation and an S-Corporation by choosing the LLC option. An LLC is like a cross between a partnership (proprietorship) and a corporation. Typically, this is a popular choice over a partnership because of the tax benefits and limited liability.
Starting a corporation is one of the more complex options; in this category, the more comprehensive and transparent packages offered by Direct Incorporation make a big difference.
Choosing this option for your business will allow for easier sell or transfer of stock. To do so, one must be incorporated. Also, depending upon classification, you will be taxed accordingly. Direct Incorporation can help with an S-Corp election form.
Legal Zoom's add ons - in addition to their basic packages - are very useful here.
A partnership involves two or more people running a business together. You should always have a formal partnership agreement in place, which LegalZoom can help with. They can also help you file your taxes and other annual reports.
Either would be a great choice to assist you during the formation process if you want to start a non-profit.
A non-profit organization focuses on helping others and not turning a profit. It requires certain tax filings to secure the non-profit benefits of not paying taxes.
The Last Word
If you're considering using business formation services to start your new business, either will make a stellar choice. Direct Incorporation is ideal for those in the market for LLC formation services. However, Legal Zoom is perfect for entrepreneurs wanting a partnership.
Filed under: Head-to-Head
