LegalZoom is a website offering legal and LLC formation services to individuals and businesses. One of the services they offer is helping to form LLCs. LLCs are a popular business structure because they provide the benefits of both a corporation and a sole proprietorship.
There are many advantages to forming an LLC, but it's essential to understand the costs associated with doing so. This blog post is a short LegalZoom review that will focus on the LegalZoom LLC cost and what you can expect from their service.
What is LegalZoom?
LegalZoom is a website that connects aspiring business owners and businesses with experienced lawyers and consultants. They offer a variety of legal services, including help with LLC formation.
Customers who require assistance with business formation or estate planning use the portal, but it also helps with marriage and divorce, real estate, and intellectual property.
LegalZoom has an A rating from the Better Business Bureau (BBB), and customers have given it a 4.41 out of 5-star rating on the site. Trustpilot has given LegalZoom an "Excellent" rating, with over 1,000 consumers giving it a 4.3 out of 5-star rating.
LegalZoom LLC Pricing & Packages
Like most other LLC formation services, the LegalZoom LLC packages provide three tiers of service: Economy, Standard, and Express Gold. Aside from LLC formation services, LegalZoom offers a selection of premium and add-on business and legal services that entrepreneurs may find valuable.
The Economy Package ($79 + State Filing Fee)
The Economy plan is the most popular LegalZoom LLC product. This basic package covers everything you'll need to form and register a limited liability company in your state.
The following is included in this package:
- Checking business name availability
- Filing the documentation (Articles of Organization)
- A guide on how to proceed further
- A review of all the legal documents to check for mistakes (peace of mind review)
- 24/7 customer support
- They will give you a financial account authorization letter (showing who can open a bank account).
This bundle is designed for clients who only require the bare minimum of LLC services, such as business filing. If you are in a hurry to start your business, this bundle may not be for you, as it may take more than 30 days to receive all the paperwork from the state.
The Standard Package ($329 + State Filing Fee)
This plan contains all of the features of LegalZoom Economy plus a corporate kit. The standard package reduces the processing time to 15 business days (rather than 30) and contains a few extras that may be useful.
This package includes:
- Deluxe binder- Organize essential business documents in a customized binder.
- A custom-made seal that gives originality to your business
- Other business owners will receive 20 member certificates with your company's details.
However, we don't believe the additional features are worth the high price difference between Economy ($79) and Standard ($329).
You can create membership certificates for your LLC at home using many templates that are available online.
If you need a business seal or other stationery supplies, various websites provide this service at a lower cost.
The Express Gold Package ($349 + State Filing Fee)
The true benefit of LegalZoom's premium subscription is the rush processing of the orders. LegalZoom Express Gold orders are processed ahead of orders received through the Standard and Economy tiers. Orders for LegalZoom Express Gold usually take 7-10 business days to process.
State and government institutions offer expedited processing for Express Gold plans. Expedited government filing fees aren't included; they are usually $50 to $100 more than ordinary state filing expenses.
To finalize an Express Gold order, expect to pay $400 or more.
No matter which one of the LegalZoom LLC formation packages you choose, you can always add on one or more extra LLC services. These features are:
LLC Operating Agreements for $99
LegalZoom will create an LLC Operating Agreement for you for $99. They ask you a few questions about your company and then generate an Operating Agreement.
If you wish to save $99, you have the option of finding a template online. Remember that what kind of operating agreement you need depends on your business and its functions. Not every template is suitable for every business, so be careful when choosing a template.
LLC Operating Agreement + EIN bundle for $159
This bundle is convenient if you are very busy and don't have time to fill out a template and send an EIN request to the IRS. However, both of these things are easy to get free of charge.
You may complete your LLC Operating Agreement at home by downloading a template.
You can also request a free Employer Identification Number (EIN) from the IRS online.
LLC Operating Agreement + EIN + business licenses bundle for $199
LegalZoom will prepare an LLC Operating Agreement, an EIN for your LLC, and business licenses for $199.
You can create your own free LLC Operating Agreement. You can also apply for a free EIN. LegalZoom contracts with a third-party firm to determine whether your company requires a license to operate. Then they provide a report that tells you what applications (if any) you need to file, but they don't assist you in completing them or cover any filing fees.
Registered Agent Services $299 per year
LegalZoom will be your LLC Registered Agent for $299 per year.
LegalZoom's registered agent services are available early in the registration process. LegalZoom charges $299 annually, whereas many LLC formation businesses offer this free of charge for the first year.
Annual Report for $55 annually
LegalZoom will file your LLC Annual Report for $55 plus state filing fees per year. Annual Reports are typically delivered to you by the state. They are simple to complete — you have to verify your LLC's details (company address and registered agent information), pay the charge, and you're done. So this is another charge that you can avoid.
Compliance Calendar $69 per year
LegalZoom sets up a Compliance Calendar for your LLC for $69 per year.
According to LegalZoom, their calendar contains information and deadlines for your business. However, LLCs don't have many deadlines to adhere to. The LLC Annual Report and your federal, state, and local taxes are the sole deadlines for an LLC. It's silly to pay $69 for a calendar that keeps track of only three or four dates.
Minutes Manager $99 per year
LegalZoom's Minutes Manager product, which includes templates and processes for holding business meetings, costs $99 per year.
Corporate management involves formal meetings. However, because LLCs are not corporations, the law does not require you to keep minutes of meetings. An LLC's meetings, such as a group video chat or an email chain, can be fundamental and informal. Meeting minutes aren't required to be kept in any particular format. You should document all changes in control or structure, and if you are thorough, you can accomplish it in a simple document.
LegalZoom's library of legal forms is one of the most popular additional services they provide. LegalZoom will ask you questions to auto-complete the form once you've selected a document.
Then you can pay for a single document (typically $59) or a monthly subscription that allows you to generate and download several papers as needed. LegalZoom does not sell blank forms or templates. You fill out the questionnaire, pay the costs, and they create a document with all of your information already filled in.
The files are always in PDF format; they do not offer an editable format. You will have to fill out the questionnaire and pay the fee again if you require the document later with changed information.
LegalZoom Lifetime Customer Support
LegalZoom's LLC registration packages include lifetime customer support service available seven days a week via online chat or phone.
The LegalZoom representatives we spoke with online and over the phone, on the other hand, had to ask for information about our company before they could answer our inquiries. And they were more concerned with getting us to fill out the LLC creation questionnaire (and persuading us to buy a product) than answering our questions.
LegalZoom Pros & Cons
During the extensive research on LegalZoom, we found many advantages and disadvantages of Using LegalZoom to Form an LLC. So let's go through LegalZoom's advantages and disadvantages and why they matter to entrepreneurs and small business owners.
- LegalZoom is an established brand that has helped over one million customers with LLC formation
- They are not a law firm, but they offer many legal services and products that assist business owners, and managers navigate the legal concerns and challenges of starting and running a company.
- They can help you form a professional LLC
- If you are not satisfied with the service, there is a 100% money-back guarantee
- They have excellent customer support
- LegalZoom LLC costs more than other business creation options (beginning at $79 + state fees), and they don't offer free plans.
- The services of a registered agent are not free (unlike many other providers), and other useful features are also pricey.
- Pricing plans can get a bit confusing, and they are not communicated clearly at the beginning.
- You get unlimited 30-minute calls with a lawyer only for new legal issues. If you need more legal help, you will be charged extra.
- They will charge you for things you can usually get for free, like the EIN, or pay a lot less if you decide to do it yourself.
Despite its 19 years of experience, LegalZoom has a mixed reputation. However, nearly two million business clients have put their faith in them to get the job done so far. They also have an A+ rating from the Better Business Bureau and a 3.92/5 customer rating.
Aside from their A+ rating, the BBB has received 287 complaints against them. Several complaints claim that LegalZoom charged consumers for services they didn't know about and had trouble canceling them.
Other customers have complained about hidden costs and memberships they didn't sign up for. Before submitting your payment information, always read the fine print and be sure you understand what you agree to.
Upselling is one of the most common complaints about businesses like LegalZoom. Many LegalZoom reviews mention how many upsells there are and how expensive the products and services are.
LegalZoom allows users to sign up for extra services in addition to those included in the Economy, Standard, or Express Gold packages. You'd spend roughly $1,500 if you signed up for every upsell product LegalZoom offers.
Several other business formation services may better suit your needs if you're not set on using LegalZoom for your LLC formation. Here are some popular alternatives to LegalZoom:
- Incfile: One of the most popular LLC formation services, IncFile offers a $0 base price. Incfile's plans include a full year of free registered agent service. Then it's $119 per year, which is still on the low end of registered agent costs. If you require assistance with license and permit research, IncFile offers it for only $99.
- ZenBusiness: They are an LLC formation service with a very straightforward payment plan. If you opt for the basic package, you will get Business Filing Service, Registered Agent Service, and Operating Agreement for only $39 plus state filing fees. The other two plans cost $149 and $249 and offer faster processing and some extra useful features not included in the basic plan.
- NorthWest: NorthWest will assist you in LLC formation for $39 plus state filing fees. When starting a company with them, you will get registered agent services for the first year, after which it will cost $125. They are also the only company that offers address privacy.
- IncAuthority: You can create an LLC for free if you choose IncAuthority. They don't charge you anything but have to upsell you to make money. They have an arrangement with the Bank of America, making opening a business bank account straightforward.
- Rocket Lawyer: One of the most well-known online legal services companies. Rocket Lawyer offers an LLC formation service for $100 + state fees and legal documents creation. The annual fee for a registered agent is $150.
We recommend Rocket Lawyer if you're a business owner searching for more extensive, high-quality legal services beyond company creation.
Take your time to compare each company's features and pricing to find the best fit for your business. And remember, you can always form an LLC for free if you're willing to do the legwork.
Is LegalZoom a Good Service for Small Businesses?
LegalZoom's primary benefit is its brand recognition. They've made a name for themselves in business formation services. There are, however, a plethora of other more cost-effective and high-quality alternatives.
How Much Does LegalZoom Cost?
The cost of forming an LLC with LegalZoom starts at $79 plus state costs. Depending on your chosen LLC bundle, you could spend up to $400 or more.
When Is the Best Time to Contact LegalZoom Customer Support?
Representatives from LegalZoom are available 12-14 hours a day, seven days a week.
What Is the Total Compliance Package?
Total Compliance is a package that includes three LegalZoom services. You get the Annual Report, Minutes Manager, and Compliance Calendar services from LegalZoom.
What are the Legal Protect Plan and the Business Advisory Plan?
LegalZoom's Legal Protect Plan offers 30-minute consultations with an attorney and legal documents from LegalZoom's library, including HR policies and legal forms. However, according to the Legal Protect Plan contract, you aren't allowed to discuss taxes or your business operations during your calls with an attorney.
Tax advice, attorney assistance, and access to legal paperwork are all included in the Business Advisory Plan.
Is it Easy to Cancel LegalZoom?
If you want to deactivate your LegalZoom account, email [email protected] Keep track of any confirmations you receive regarding your cancellation as a member.
Can I Edit My LegalZoom Document?
It's important to note that you can't update a LegalZoom document by editing the original. Updating your document by striking out clauses or writing changes is unacceptable. You must create and pay for a completely new document.
Can I Form an LLC by Myself?
Many, if not all, of the steps required to form an LLC can be completed on your own. On the other hand, some people choose to hire an attorney or accountant with experience setting up businesses.
LegalZoom for an LLC Costs & Fees: A Final Word
LegalZoom is a company that has been in the business of helping people become entrepreneurs for many years. They have three packages to choose from, depending on what you need. LegalZoom LLC packages are Economy, Standard, and Gold Express.
You can get help to determine which package is best for you, and they will guide you through becoming an LLC. LegalZoom is an established company with a lot of experience and knowledge in LLC formation, so you can be sure that you're getting good advice.