You have a lot to consider when you start a business, including the business name, branding, and marketing strategy. However, you can't forget about the legal side of things, which can be a jargon-filled minefield. This is why there are various business formation services out there, each promising to simplify the process for you. Today, Direct Incorporation and IncFile will be examined so you can see which is best for you.
Direct Incorporation vs. IncFile: The Verdict
Both Direct Incorporation and IncFile can help you file the documents you need to start a business. Each has extensive online resources, good reputations, and a commitment to serving their customers well. IncFile is cheaper. However, Direct Incorporations fees are more transparent with easily defined service packages, contrary to IncFile's varying prices by state and service. IncFile cannot help you form a partnership. Direct incorporation also allows for sole-proprietorship - ideal for lone entrepreneurs.
Services Offered & Pricing
Choose IncFile if:
- You're looking to save money.
- You want to set up a corporation, LLC, or sole proprietorship.
Choose Direct Incorporation If:
- You want to set up a partnership.
- You want more transparent pricing.
- You want more additional services and don't mind spending a little more.
IncFile Packages & Pricing
IncFile provides many services to help new and existing businesses. While they can help with business formation, they can also help you manage the legal side of your company after. The exact price will depend on the service you need and where your business is. Some states charge more to file for an LLC, while others charge more for a C-Corp or S-Corp. Other services, such as accounting, will vary based on your needs. If you want to know the cost, consider all of these things and contact IncFile directly. Here are some of the services they offer and the pricing that you can find on the website.
Business Formation - price varies
If you need to form an LLC or corporation, the cost will vary between states. The cheapest state to form an LLC in is Kentucky, at $40. Massachusetts is the most expensive, with $520 as the cost.
To form a C-Corp or S-Corp, the cheapest states (Arkansas, Hawaii, Iowa) charge $50. The cost is the same in most states, though Rhode Island and West Virginia charge more for an S-Corp. The most expensive state for both structures is Nevada, where it costs $725.
Forming a nonprofit can cost as little as $8 in Kentucky or $237 in Alabama. No matter which structure you choose, IncFile charges $0 to $299 more, depending on the services you need.
Accounting - price varies
You can also use IncFile to obtain an employer identification number (EIN), which costs $70. The company also offers accounting services, including:
- Consultation call
- Quarterly bookkeeping
- Mobile account access
- Tax return preparation
IncFile doesn't list prices on their website, but you can schedule a free consultation call. Then, you can see if your business will benefit from IncFile accounting services.
Compliance - price varies
Each year, you need to file a report with the Secretary of State to show your company's activities. If you don't want to have to file the report, you can have IncFile do it. They'll help make sure your report is accurate and that you can submit it on time.
IncFile can also help you get a Certificate of Good Standing from the Secretary of State. The certificate can show that you're following the laws when running your business. Both the certificate and the annual report are free.
If your business needs licenses, IncFile can help you obtain what you need. You can purchase a business license research package for $99. And if you need a trademark, IncFile can help you get one for $199 plus the cost of the federal filing fee.
Registered Agent Service - price varies
If you want help with your legal documents, you should hire a Registered Agent. Fortunately, IncFile offers the services to all new businesses as well as on its own.
When you file for an LLC or corporation, you can get the first year of a Registered Agent for free. After that, the service costs $119 per year. IncFile will also help you change your Registered Agent if you had one before.
Direct Incorporation Packages & Pricing
There are five packages 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
- 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)
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
It's more important than ever that customers can access their documents online, during and after the formation process. Both IncFile and Direct Incorporation offer similar services; however, there are fundamental differences too.
- Both sites rate well for ease of use, being simple to navigate.
- You can access a lot of your business information via the customized dashboard.
- IncFile leans more towards finance management.
- Direct Incorporations website is smoother and offers more upfront information.
- Direct Incorporations website is safer and protected against malware as Authorize.net protects them.
- Both service providers promise accuracy so that your documents are processed the first time correctly around, avoiding delayed turnaround times.
- Both can expedite your process for a fee.
- Both can submit your documents for you within one business day.
- Direct incorporation provides real-time updates as your information is processed.
Compliance & Track Record
Direct incorporation has a better track record, with the IncFile accreditation being removed by the better business bureau due to unresolved customer complaints.
- Several years in business.
- Overall positive reviews.
- Direct incorporation retains its BBB rating; IncFile does not.
Both offer decent customer support with very few complaints online; IncFile does have more complaints, though with quite a few reporting issues such as missing documents, delayed communications, and other areas of concern.
- Several years in business.
- Overall good ratings.
- Both have a well-rated phoneline with a good support team.
- IncFile has a live chat option.
Let's take a look at which incorporation service is best for the different types of startups.
As LLC formation services go, Direct Incorporation is among the best, having already set up thousands of LLCs for others. The LLC is a famous structure, especially for small businesses requiring a simple tax-efficient business entity.
Direct incorporation has a brilliant reputation in this regard, with many business owners trusting them to start a limited liability company.
Customer reviews reveal that one of the primary services that Direct Incorporation is best known for is corporation formation packages. Though they're a little on the expensive side, they're certainly worth it with a trusted reputation and a wealth of experience.
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.
Since IncFile doesn't support partnerships, Direct Incorporation had to win this round. But that doesn't mean that Direct Incorporation doesn't offer stellar service in this regard - they do!
To start a nonprofit, you first have to file articles of incorporation with your state. Then, you can apply for tax-exempt status with the IRS. You can choose to be a public charity, a social advocacy organization, a foundation, or a professional organization. It can be challenging to convince the IRS to grant your nonprofit a 501(c)(3) status; however, there are many pros to this, such as grant writing. Both Direct Incorporation and IncFile offer great service packages for nonprofits. With IncFile, you have to contend with their poorer reputation, and Direct Incorporation is costly, which is usually a negative for Nonprofits.
The Last Word
Direct incorporation is the winner in customer service, legal advice, and extras, though IncFile also offers interesting extras (like a full year of free registered agent service). Direct incorporation has much more transparent fees, a more secure website, and a better reputation than IncFile, though IncFile could be considered more cost-effective.