Starting a business can be a complex process, which is why thousands of business owners turn to business formation package providers. In doing so, you can avoid the piles of paperwork and seemingly endless bureaucracy and enjoy peace of mind.
Harbor Compliance and LegalZoom are two popular options that will be compared side by side, so you can decide which is best for your business.
Harbor Compliance Vs. LegalZoom: The Verdict
If you want access to legal advice alongside your LLC formation services, LegalZoom is ideal for you. However, Harbor Compliance is hard to beat if you wish for a comprehensive 1-1 service (including extras like a free registered agent service). LegalZoom is more affordable; however, Harbor Compliance offers a premium service. Their LLC formation packages are particularly ideal for small business owners.
Choose Harbor Compliance If:
- You want premium, personalized customer service
- You want your own 1-1 expert on hand for all your needs
- You want access to secure, advanced software
- You want a free registered agent service (for the first year)
Choose LegalZoom if:
- Affordability is key for you
- You want legal advice without needing to hire an attorney separately
Services Offered & Pricing
Key Similarities
- Access to exceptional customer support teams
- Access to professional guidance and knowledge
- Both can offer you fast, mistake-free filing
Key Differences
- Enhanced 1-1 customer support from Harbor Compliance
- LegalZoom offers expedited filing - for a fee
- Harbor Compliance offers a registered agent service
- LegalZoom is less expensive
LegalZoom Packages & Pricing
Economy Package - $79
The Economy package costs $79. You get state business registration at this level, but the filing fees are not included in the package price. You also get guides to assist you with document reviews and knowing what steps to take, along with a personal assessment of your documents.
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. 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.
Other Services - A La Carte Pricing
LegalZoom provides other services at extra costs, such as operating agreement preparation for $99. Some services are free for a trial period only, and then you will pay a recurring fee.
You will sign up with LegalZoom under a package and access the additional services and options. It would be best if you took time after signup to assess the other options carefully. It is easy to end up with a bill totaling over $1,000 once you start adding services.
Harbor Compliance Packages & Pricing
Formation Package - $399 + state fees
The Formation package is limited to entity formation requirements. This Package includes:
- Filing Articles of Organization - Draft and file forms submitted to the state to create a business entity officially
- Name Availability Search - Ensure your name is available by searching your state database
- Registered Agent Service - Free year of mail forwarding via a registered agent who receives important deliveries from the government for you and sends your way
- Federal Tax ID Number - Set up what's similar to a SS number for your business, used to file taxes, open bank accounts, and hire employees
- Sample Operating Agreement - Template to outline ownership structure and operation guidelines that you can fill in on your own
The Formation package costs $399 plus your state fee.
Compliance Package - $799 + state fees
The Compliance Package provides the full suite of Harbor Compliance services. This Package includes everything from the Formation Package in addition to:
- Managed Annual Report Service - Manage due dates and file annual reports to the state on your behalf
- Initial Report - Some states require an initial report after filing – Harbor Compliance can determine if it's necessary and handle it for you
- Publishing - Some states have a publishing requirement of public proof of their business formation in a local newspaper, which Harbor Compliance can handle if required
- LLC Kit - Custom company binder with your brand name embossed along with a symbolic seal white-labeled with your company name, state, and date of creation
- S-Corp and C-Corp Tax Election - Prepare and file necessary IRS forms for tax election if you choose to be taxed as a corporation
- Ongoing Support - Ongoing access to Harbor Compliance's customer support even after entity formation
The Compliance Package costs $799 plus your state fee.
Document Management & Online Experience
Both LegalZoom and Harbor Compliance offer an online management experience that allows you to track and manage your documents. Harbor Compliance offers additional security via authorize.net and additional premium software such as a Tax Manager, license manager, and entity manager.
LegalZoom has a basic but easy-to-navigate interface; however, it can be irritating to use due to consistent upselling attempts. It's very easy to sign up for something that accidentally costs extra, which isn't clear throughout. Customer reviews also report that they can be challenging to undo/cancel.
Key Similarities
- Both rate well for ease of use overall
- Fully online document management
Key Differences
- Harbor Compliance offers more security
- LegalZoom's constant upselling
Processing Time
Harbour Compliance does what it can to speed up this process - all customers see a start-up specialist within one day, which will expedite the process overall. With that said, you cannot pay extra for expedited filing like you can with LegalZoom. Processing time varies by state. However, it can take 10-30 days with both.
Key Similarities
- Overall similar processing times
Key Differences
- Harbour Compliance offers a start-up specialist to all customers
- LegalZoom allows you to pay extra for expedited filing
Compliance & Track Record
LegalZoom, being attorney-run, has a decent track record for compliance. As for Harbor Compliance, it's almost impossible to find any negative feedback online. Overall, both offer excellent compliance during the formation process.
Key Similarities
- Both are well established
- Excellent compliance
Key Differences
- Harbor Compliance has better online reviews
Customer Service
LegalZoom and Harbor Compliance are both well-rated online and hold accreditation with the better business bureau. Both companies are responsive during standard business hours. Harbor Compliance offers a 1-1 service, making it easy to ask questions or get help. However, LegalZoom's sales team is easiest to get hold of, showing that they value new sales over existing customers.
Key Similarities
- Both hold BBB accreditation
Key Differences
- Harbor Compliance's customer service is bespoke and has better customer feedback
- LegalZoom puts more effort into attracting new customers than looking after existing customers
Structure Breakdown
Since they both cater to the same business types, let's analyze each structure individually and see which is best for your business.
Harbor already has the reputation of offering some of the best LLC services.
Harbor Compliance can help new LLCs get started by managing the following documents:
- Articles of organization
- EIN
- Operating agreement
- State and local tax IDs
- Local business licenses
In addition to this, Harbor Compliance offers a free registered agent service with all of its business packages.
These companies can help you with two types of corporations, C-Corps and S-Corps. C-Corps are legal entities that remain entirely separate from their shareholders. Shareholders pay taxes on dividends, which creates a double taxation problem.
Setting up either a C-corp or S-corp requires a fair amount of bureaucracy, and legal knowledge will help you navigate it. Harbor Compliance is excellent for this, but they don't have a team of attorneys at their disposal the way LegalZoom does.
Harbor Compliance's bespoke 1-1 service is excellent for this, guiding you through every step of the way. However, LegalZoom also offers useful add-ons and services that streamline this process for you.
Partnerships are a good fit for the services offered by Harbor Compliance and LegalZoom, the legal services provided by LegalZoom, in particular, are a big selling point.
While both LegalZoom and Harbor Compliance can assist you in setting up a non-profit, LegalZoom is substantially more affordable. Starting a non-profit can also be legally complex, so it's best to have legal advice on hand if you deal with this slightly complex business structure.
The Last Word
The incorporation services offered by Harbor Compliance and LegalZoom are popular among entrepreneurs, small businesses, and corporations alike. If you're setting up a new business, professional business formation services can get rid of quite a few headaches. Harbor Compliance specialists offer bespoke 1-1 consultations that will give you dedicated guidance to ensure you get the best out of their services.
LegalZoom is also helpful, and while they don't have the same customer service reputation, their services are at a much lower price point which may offset any concerns you have. Their higher-tier packages also offer customizable and luxury extras, in addition to helpful services. Either way, both service providers can provide you with top-class support in all of your business endeavors.
Filed under: Head-to-Head
