When starting a new business, one of the most important decisions you will make is how to legally structure your company. There are a variety of business entity types to choose from, including limited liability companies (LLCs), corporations, and partnerships.
Once you have decided on a business entity, the next step is to file the necessary paperwork with your state government. However, this process can be confusing and time-consuming. That's where business formation services like IncFile and LegalZoom come in. In this article, we will compare and contrast these two companies to help you make an informed decision about which one to use.
Similarities between IncFile and LegalZoom
Before we dive into the differences between IncFile and LegalZoom, let's first discuss their similarities. Both companies offer a variety of business entity types, including LLCs, corporations, and partnerships. They also offer a range of formation packages at different price points, depending on your needs. Additionally, both companies provide several additional services such as registered agent services, business licenses and permits, and federal tax ID numbers (EINs).
When it comes to processing time for formation, both companies have a relatively quick turnaround. IncFile offers a same-day processing option for LLC formation, while LegalZoom's processing time can take a few days longer but is still relatively quick. Both companies also provide customer support and resources to help you navigate the process of starting your business.
Comparison of IncFile vs LegalZoom
State Filing Fees
One of the main differences between IncFile and LegalZoom is the state filing fees they charge for business formation. State filing fees are the fees charged by your state government to process your business formation paperwork. While both companies charge a fee for their services, LegalZoom's state filing fees tend to be higher than IncFile's.
Annual Report and Other Compliance Requirements
In addition to state filing fees, you will also be responsible for annual reporting and other compliance requirements for your business. Both IncFile and LegalZoom offer services to help you with these requirements, but the specifics can vary. For example, IncFile offers a free compliance tool to help you track your compliance requirements, while LegalZoom charges an additional fee for this service.
Operating Agreement and Other Legal Documents
An operating agreement is a legal document that outlines the ownership and management structure of your LLC. While an operating agreement is not required by law, it is highly recommended to have one to protect your business and personal assets. Both IncFile and LegalZoom offer operating agreement templates as part of their formation packages. However, LegalZoom charges an additional fee for the customization of the template, while IncFile does not.
Turnaround Times for Processing
While both companies offer relatively quick processing times for business formation, there are some differences in the specifics. IncFile offers a same-day processing option for LLC formation, while LegalZoom's processing time can take a few days longer. However, LegalZoom does offer a rush processing option for an additional fee.
Year of Registered Agent Included
A registered agent is a person or company designated to receive legal documents and other important mail on behalf of your business. Both IncFile and LegalZoom offer registered agent services as part of their formation packages. However, IncFile includes a full year of registered agent service with their formation packages, while LegalZoom charges an additional fee for this service.
Customer Service and Support
Both IncFile and LegalZoom offer customer support and resources to help you navigate the process of starting your business. However, there are some differences in the level of support provided. IncFile offers phone and email support, as well as a client dashboard where you can track your order status and access important documents. LegalZoom offers phone, email, and live chat support, as well as a customer support center with articles and guides to help you with the process.
Starting Your Business with IncFile or LegalZoom
Now that we have compared and contrasted IncFile and LegalZoom, let's discuss how to start your LLC with these companies. The process is relatively straightforward and can be completed online in just a few steps.
1. Choose the right company for your needs. Consider the factors discussed earlier, such as state filing fees, annual reporting and compliance requirements, and customer support.
2. Select your business entity type and formation package. IncFile and LegalZoom offer a range of formation packages at different price points depending on your needs. Make sure to choose the package that best suits your business.
3. Fill out the necessary paperwork. Once you have chosen your package, you will need to fill out the necessary paperwork with your state government. Both IncFile and LegalZoom will handle this for you, but you may need to provide some information about your business.
4. Wait for processing. Once you have submitted your paperwork, you will need to wait for it to be processed. Both IncFile and LegalZoom offer relatively quick processing times, but the specifics can vary.
5. Receive your formation documents. Once your paperwork has been processed, you will receive your formation documents. These will include your articles of organization, operating agreement, and other important legal documents.
6. Complete any additional steps. Depending on your business, you may need to complete additional steps such as obtaining a business license or tax ID number. Both IncFile and LegalZoom offer additional services to help you with these requirements.
Customer Reviews and Experiences
Finally, let's take a look at what customers are saying about IncFile and LegalZoom. Both companies have a mix of positive and negative reviews, so it's important to read a variety of opinions before making a decision.
IncFile has a 4.8-star rating on Trustpilot, with customers praising their quick and efficient service, affordable pricing, and helpful customer support. Some negative reviews mention issues with the website or billing, but these are relatively rare.
LegalZoom has a 3.9-star rating on Trustpilot, with customers praising their professionalism and ease of use, but also mentioning issues with billing and customer service. Some customers have also mentioned that LegalZoom's prices can be higher than competitors like IncFile.
When it comes to starting your business, choosing the right business formation service can make a big difference. While both IncFile and LegalZoom offer a range of services and support to help you with the process, there are some differences to consider. By comparing and contrasting the two companies based on factors like state filing fees, compliance requirements, processing times, and customer support, you can make an informed decision about which one to use.
Regardless of which company you choose, starting your LLC with a business formation service can save you time and hassle, allowing you to focus on building and growing your business.