When you start a new business, it can quickly feel like you're drowning in paperwork and legal documents. That's why many new business owners choose to turn to a formation service instead. You can hand over the hard work to the professionals and relax with peace of mind. Two popular options, LegalZoom and CT, will be compared side by side to help you understand which is best for your business.

LegalZoom vs. CT: The Verdict

LegalZoom is probably the first name that comes to mind when you hear about incorporation services, helped in part by the fact they've served millions of customers and have been part of dozens of extensive advertising campaigns. Despite their big reputation, LegalZoom does fall short in some ways with an unclear pricing model and a lack of registered agent service in their LLC formation packages. LegalZoom makes up for this by being a suitable replacement for an attorney/legal services for small businesses. While LegalZoom isn't a law firm, they can meet some of your legal needs if you don't want to engage the services of an attorney yet.

CT is a sizeable registered agent service company that has been in business since the 19th Century. Though they predominantly deal in registered agent services, they offer other business services and formation assistance. CT capitalizes on this experience by being one of the highest-priced service providers. With this in mind, LegalZoom should be considered for its excellent value, though you should note that LegalZoom charges extra for registered agent services.

Choose LegalZoom if:

  • Affordable pricing is critical for you
  • You want access to top-notch legal advice
  • You don't mind paying extra for a registered agent service (not included as standard)

Choose CT if:

  • You want smoother online document management
  • You don't mind paying a little more for more experience
  • You need compliance/annual reporting reminders
  • You want excellent customer service

Services Offered & Pricing

LegalZoom offers similar services to CT. However, LegalZoom can also act as a replacement for legal services (particularly for small businesses that can't yet afford in-house legal help). They share many of the same capabilities, such as online document management services, and you can access the documents required to set up a business bank account. However, LegalZoom's registered agent service comes at a premium, whereas CT's services are primarily based around this. CT's excellent customer service also cannot be overstated.

Key Similarities

  • Online document management services
  • Affordable pricing
  • Good reputations

Key Differences

  • CT has some of the best customer support in the business
  • LegalZoom can offer some basic legal help

CT Registered Agent Packages & Pricing

CT focuses on registered agent services and can help you with compliance requirements and UCC, DBA certificates, articles of organization, employer identification numbers, and other business formation services. CT can offer you three different packages to choose from. State fees aren't included.

Registered Agent Services - $329/year

This basic package focuses on just the registered agent service, which means CT will handle all of your business mail and keep you ahead of any legal deadlines. You'll have access to all of their usual features, such as a 24/7 online hub and up-to-date info on deadlines and other issues.

Registered Agent & Incorporation Filing - $729/year

This package offers you everything above and a team of experts dedicated to helping you incorporate your business. CT will ensure your business name is free for use and complete all Articles of Incorporation in your chosen state.

Registered Agent & Qualification Filing - $729/year

In addition to the registered agent services, this package assigns you a team of experts to handle qualification filings. This is an alternative to the incorporation filing package listed above.

LegalZoom Packages & Pricing

LegalZoom has three separate packages for you to choose from: a basic package that covers only business registration to a more comprehensive package that offers extras like expedited service.

Economy Package - $79

You'll receive guides to assist you and document reviews, including a personal assessment of your documentation with this package.

You'll be able to create a financial account authorization letter, which lets you open bank accounts for your business.

Standard Package - $329

The standard package gives you everything from the economy package and an organizer, company membership certificates, and VIP processing times.

Express Gold Package - $349

With this package, you'll receive everything from the above two packages and rush processing with the state and express shipping, too. It'll take less time to process anything you file with this package.

Document Management & Online Experience

CT and LegalZoom offer comprehensive online services available 24/7 to help with all of your needs. You can manage and file paperwork, download your documents, and contact a customer service agent to help you. However, LegalZoom's online service is slightly marred by constant upselling attempts, whereas CT truly prioritizes the customer.

Key Similarities

  • You can do everything you need online
  • Interfaces are easy to use

Key Differences

  • LegalZoom's service seems more geared towards making money than customer services
  • While it doesn't make much difference, CT's user interface is a bit more sleek and professional than LegalZoom's

Processing Time

With over 125+ years in the business, CT has its processing time fine-tuned. They'll be sure to alert you in good time to prepare your annual report and give you plenty of time. LegalZoom offers more business formation services, completed within 10-30 days. Expedited filing is possible, but it's costly; you're better off purchasing a higher value package in the first place if the timing is crucial for your business.

Key Similarities

  • You can trust either service to get your documents right in the first instance; both have excellent reputations in this area

Key Differences

  • LegalZoom offers expedited processing
  • CT doesn't offer streamlined formation packages as LegalZoom does

Compliance & Track Record

With over 125 years in the business, very few can match CT's compliance reputation. Their reviews are universally positive; however, it's a bit difficult to find large numbers of reviews online. This company is hugely diligent at keeping you up-to-date on all business and legal requirements, paperwork, and service of process information so that you don't default. LegalZoom's compliance track record is decent, with no significant issues. However, they don't come close to CT's level of experience.

Key Similarities

  • LegalZoom and CT have had no major compliance scandals

Key Differences

  • LegalZoom could be considered a larger company than CT, with almost 4 million customers to date. Their reputation could be seen as more impressive for this reason
  • CT has around a hundred years more in the business than LegalZoom, so their reputation is much more long-standing

Customer Service

LegalZoom's customer support is acceptable, but it's nowhere near CTs. Getting hold of someone from LegalZoom is difficult unless you're trying to contact the sales team, which sends a message that they're more focused on new customers. On the other hand, CT's customer support is excellent with customer service reps that go the extra mile and are contactable via phone, email, and online chat support.

Key Similarities

  • You have a variety of options in terms of contacting customer services

Key Differences

  • CT's customer support goes the extra mile

Structure Breakdown

Now that you can see what each company has to offer let's individually break down each structure further to give you a better view of what they could do for you.

LLCs: Toss Up

When forming an LLC, you'll want to choose a service that can perfectly handle your formation documents. CT has a better reputation, but LegalZoom has helped more entrepreneurs set up their business entities. Starting from just $79 (not including filing fees), it may be tempting to turn to LegalZoom. However, CT is also a solid option for LLC formation services, with excellent, dedicated customer service and great compliance services.

Corporations: Choose CT

LegalZoom could help you set up a corporation. However, CT emphasizes compliance and guarantees excellent attention to detail and professionalism; with corporations representing more complex business structures, you may feel better choosing to use CT.

Partnerships: Toss Up

A DBA partnership is a straightforward legal entity that either LegalZoom or CT could help you with. Their additional services, such as annual report reminders and tax return assistance, could be helpful for your partnership.

Non-Profits: LegalZoom

LegalZoom is the top choice with a particular focus on legal documents and the need to abide by state laws to register a non-profit carefully. Their online legal services make it easier to ensure you're carefully following state guidelines when registering your new Non-profit. Special tax filings are required to secure the non-profit benefits of not paying taxes. LegalZoom can assist you with the required documentation. They charge $99 excluding filing fees for the basic setup of a non-profit.

The Last Word

CT and LegalZoom are both brilliant incorporation services in their own right, but CT has a better reputation and excellent customer service. While this may seem like a no-brainer, LegalZoom has a much more affordable price and has helped more customers in a shorter period. You should carefully weigh up the benefit of a better reputation versus a more affordable price, either way, and you should be able to access great help for your new business entity using either service.

Filed under: Head-to-Head

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