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We compare the business formation services of LegalZoom and ZenBusiness. This comparison examines the pros and cons of these two leading LLC formation services.
Creating a Limited Liability Company (LLC) offers tax advantages for many small business owners. Whether you plan to keep your business small or grow it to be as large as possible, it all starts when you fill out the paperwork to create an LLC for your business formation.
However, the paperwork alone can be complex with certain requirements that may not be fully understood or appreciated. Plus, each state has its own set of requirements which may not be obvious to those setting up a business or LLC. For many, the biggest hurdle is either making mistakes or not filling out the forms correctly which leads to delays and additional costs.
The advent of the internet and the digitalization of legal documents has led to a revolution in terms of information sharing. What once required a visit to the courthouse is now readily available at the touch of a computer or mobile device.
This is where online legal companies such as LegalZoom and ZenBusiness come in to help. While both companies offer considerable advantages, there are certain differences that you need to know to make the best-informed decision. Comparing their services before choosing the right company will help you get started the right way.
One of the first online legal technology companies, LegalZoom was formed in 2001. The company became quite well-known thanks to its extensive advertising campaign that featured famed attorney Robert Shapiro.
They started by providing many of the basic legal forms used by individuals and businesses. That includes wills, living trusts, copyright registration, trademark applications, and business formation. It is the business formation services that the company has focused on thanks to the interest in creating small and large businesses along with corporations. This also includes Limited Liability Companies.
Over the years, LegalZoom has expanded its services that are non-business formation related. However, they do retain a considerable focus on individuals who want to create their own companies. This is particularly true for those who want to create LLCs as part of their business formation efforts.
The company started as a small business designed to help entrepreneurs make their dreams come true when creating their companies. The goal was to make business formation faster and simpler across all 50 states. As a result, ZenBusiness became a public benefit corporation which helps keep their overhead low so they can charge less for their services.
When the company was pitched to Ross Buhrdorf, he coordinated with the founding members to focus their services on business formation. Not only in getting started but in supporting businesses with an expert team along with improving technology. The result has been a shaping of services into packages not unlike LegalZoom at least in terms of content.
There are certain similarities and differences between LegalZoom and ZenBusiness. Understand them will help you make the best-informed decision.
LLC Creation Services Comparison
As you might expect, there are several similarities between what LegalZoom and ZenBusiness offer in terms of business formation services and beyond. This is because the demands of business formation services fall along the same lines, so there is some crossover in terms of types of services for both companies.
- Fast Execution of Services
- Customer Support
- Additional Services
- Clear Package Pricing
- Knowledge & Experience
It is true that both LegalZoom and ZenBusiness will work quickly to help set up your business. This means that depending on the package you choose they will register your business within a matter of weeks or even days. This will depend in large part on how fast the state you live in moves to complete the registration process, but both companies are similar when it comes to their speed.
In addition, the customer service offered by both businesses is similar in setup. You have a range of choices in how to contact either LegalZoom or ZenBusiness. However, there is a significant difference in terms of how effective each company is when it comes to their customer service which is explained in greater detail below.
Another area of similarity is the additional services that each company provides. This ranges from annual report services to providing a registered agent. A registered agent is a legal representative that receives official documents from a government or private source. You are required to have a registered agent, although in most states you can act like one if you desire. The advantage of having a registered agent is that either LegalZoom or ZenBusiness will always be available to ensure that they are received.
There are no hidden fees or surprise charges with either service. You will know in advance what is required for payment for all the services that are being provided. This means that you can choose the one that best suits your budget in terms of the services that are needed.
Finally, one of the most important areas that both companies excel is in providing information, tips, and insight into the running of your business. This means that you can find basic information on the legalities of running your business on both sites. While ZenBusiness has not been around as long, they have plenty of experience which they can provide an easy to understand language.
Although the similarities are many, there are certain differences which separate the companies. For those who are looking to choose between the two, understanding the differences is important.
Comparing The Differences
The most obvious difference is that LegalZoom is one of the most established online legal services in the world. Founded in 2001, the company is easily the best-known and continues to be highly recognized thanks to its widespread advertising campaign.
ZenBusiness was only formed in 2015, which means that in many ways they are the new kid on the block. But all things considered, being a young company does have its advantages.
Overall Services: If LegalZoom has a definite advantage over ZenBusiness, it is that they offer services beyond company formation. This means that if you need legal services that extend beyond the creation of your business or LLC, then you’ll want to check out LegalZoom. However, ZenBusiness is not that far behind and perfect for business formation.
Who Has Better Registered Agent Services LegalZoom or ZenBusiness?
The registered agent services of LegalZoom are at least $100 higher per year compared to ZenBusiness. LegalZoom charges $299 per year while after the first year, ZenBusiness charges only $119.
The difference is actually greater since ZenBusiness does not charge for its first year of registered agent services.
Who has Better Prices, LegalZoom or ZenBusiness?
While comparing LegalZoom and ZenBusiness, one of the most notable differences is the price between identical services from both businesses. While you should always choose the company that offers the right services at the best price, the difference in price between both companies is quite noticeable.
LegalZoom is one of the more expensive online companies that specialize in business formation services. They charge $99 for their basic package which does not include state fees.
ZenBusiness charges just $49 plus state fees for their business formation services. And this includes the first year of being a registered agent on your behalf. When you throw in the customizable operating agreement that is the same for all their packages, this is a far lower price to pay compared to LegalZoom.
Who Has Better User Reviews, LegalZoom or ZenBusiness?
Another area where ZenBusiness has excelled in the service provided to its customers. While LegalZoom has generally received average to poor reviews from many customers mostly due to not addressing customer questions, being difficult to contact after a sale is made, and the vagueness of some of their procedures, ZenBusiness enjoys a solid reputation thanks to the many positive customer reviews it has received.
This means that ZenBusiness has proven to be more responsive, quicker in addressing questions and inquiries and providing services that are easier to understand and complete.
In the end, both LegalZoom and ZenBusiness offer exceptional advantages in helping you fill out and file the proper paperwork to create an LLC. However, for most people, ZenBusiness will be the choice thanks to the benefits they offer for business formation. There are good reasons why ZenBusiness stands out compared to LegalZoom.
While one of the most important factors in choosing ZenBusiness is the pricing of their packages, it is complemented by how the services are shaped to help business owners grow their companies. This means that in terms of pricing, support, and services, ZenBusiness offers what you need. While LegalZoom does offer an arguably larger range of services, that fall outside creating a business.
ZenBusiness, however, has a strong support team that helps business owners every step of the way. The reputation they have earned for exceptional customer service is second to none. That is another reason why more people are choosing ZenBusiness for their business formation and support needs.
For those who are creating an LLC or engaging in business formation services, ZenBusiness offers more directed services for less money. In addition, they offer the type of services that can be customized to your needs. This makes them a better choice overall compared to LegalZoom, which is why they are one of the more popular online companies specializing in business formation services.