Overview

For most people, the reason for using LegalZoom is to save the time and expense of using an attorney to form their LLC.

The main points to consider are:

  1. Is LegalZoom a reliable option for form my LLC?
  2. Is LegalZoom easy to use?

The short answer is yes. Unless your business has unusually complicated legal requirements, LegalZoom can reliably setup your LLC for a small fraction of the cost of hiring a attorney.

How does LegalZoom compare to other LLC formation services?

Compared to other online filing services, LegalZoom provides a very full featured service, but it is not the most affordable option. Incfile, for instance, provides a cheaper service that is just as reliable. Of course, the cheapest way to set up your LLC is to file it yourself using our free guide.

LegalZoom Advantages

  • Established, trusted brand
  • Smooth and relatively pain-free order process
  • Access to a wide range of products and services to help owners and managers navigate the legal challenges of starting and maintaining a business.
  • Ability to form an professional LLC (PLLC)
  • Cheaper than hiring a law firm to form your LLC

LegalZoom Disadvantages

  • Above average prices relative to comparable online filing services
  • Slow turn-around time with low-cost package
  • Quality of customer support is inconsistent
  • Certain pricing and billing practices are not customer friendly. Easy to accidentally sign up for expensive subscription services that auto-renew.

Form LLC With LegalZoom ($149 + State Fees)

Detailed Review

Customer Value

Similar to most other LLC formation services, LegalZoom offers multiple tiers of service: Economy, Standard and Express Gold. In addition to forming your LLC, LegalZoom offers a broad range of premium and add-on services that business owners may find helpful.

Overall, LegalZoom is one of the more expensive online business formation services. For our own LLC, we ordered the Economy package as we feel it represents the best value out of the three offered service levels.

LegalZoom Package Chart

LegalZoom Economy

LegalZoom’s lowest price LLC formation package starts at $149 and includes the following services and features:

Name Availability Check

When forming an LLC, you cannot use a name that is already in use by another business in your state. LegalZoom confirms availability of your preferred LLC name. If your name is not available, a LegalZoom specialist will contact you by phone or email to request an alternate name.

Filing of LLC State Documents

LegalZoom files the articles of organization with the appropriate state agency in order to legally form your LLC.

Personalized Operating Agreement

In most states, LLCs are required to have an operating agreement. This document sets out the ownership and operating procedures of your LLC. LegalZoom uses the information you provide them about your business during the ordering process to generate a boilerplate operating agreement that is filled in with your company’s name, address and member information.

Note: We provide a free sample operating agreement.

Financial Authorization Letter

LegalZoom will ship you a boilerplate document authorizing you or another member of your LLC to establish and manage a bank account and lines of credit. LegalZoom will ship you a paper copy of your financial authorization personalized with your company’s information.

LegalZoom does not expedite economy orders. LegalZoom advertises, but does not guarantee, that orders placed at this tier will be completed and ready to ship within 30 business days. In some states, such as California, economy orders may take longer than 30 business days to process due to secretary of state processing delays.

The economy package does not include the cost of shipping or government filing fees. State filing fees typically range between $50 and $250. Cost for shipping is priced as follows:

  • $9.95 for standard shipping
  • $14.95 for 2 business day shipping
  • $21.95 for next business day shipping

Economy customers typically pay around $250 total to complete a LegalZoom Economy purchase.

Is LegalZoom Economy a good value?

LegalZoom Economy represents the best value of all three Legalzoom pricing tiers.

While some of LegalZoom's competitors offer lower priced LLC formation packages, they typically charge between $40 and $99 extra for an operating agreement. This makes LegalZoom Economy a great value for those who need help creating an operating agreement.

If you do not need an operating agreement, a great lower cost alternative to LegalZoom Economy is Incfile's Silver plan.

LegalZoom Standard

LegalZoom’s mid tier package starts at $289 - $140 more than the Economy Package.

In addition to all services and features that come with Economy package, the LegalZoom Standard Package includes a corporate kit. The corporate kit consists of the following:

  • A personalized binder for organizing important company documents
  • A company seal that can be used to give your LLC’s agreements and documents a more official appearance
  • 20 member certificates personalized with your company’s information that can be distributed to the owners of your new company.

None of the items included in the corporate kit are needed to form or operate an LLC. However, new business owners may appreciate the official look and feel of the kit. If you decide to purchase LegalZoom Economy, the corporate kit can also be purchased separately through LegalZoom’s affiliate, ACS Corporate Supplies, for $70.

LegalZoom prioritizes Standard order processing ahead of Economy orders and advertises, but does not guarantee, that standard orders will be completed and ready to ship within 15 business days. Similar to Economy orders, in some cases your order may take longer than 15 business days due to secretary of state processing delays. Under this plan, you will be charged separately for government filing and shipping fees.

Standard Customers typically pay around $350 to complete a LegalZoom Standard purchase.

Is LegalZoom Standard a good value?

For most individuals, LegalZoom Standard will not be a cost effective option. If you’re interested in the corporate kit and don’t need to expedite your order, you can save $70 by choosing the Economy package and purchasing a kit separately. If you are considering upgrading to LegalZoom Standard to speed up your order, note that other service providers, including Incfile, offer fast order processing without charging a premium.

LegalZoom Express Gold

LegalZoom’s premium option, Express Gold, starts at $359 - $70 more than the Standard package and $210 more than the Economy package.

Express Gold includes all the services and features offered as part of the Economy and Standard packages. In addition, Express Gold customers are able to have LegalZoom obtain an EIN for their LLC for a discounted price of $49. For Standard and Economy customers, this add-on service costs $79.

LegalZoom prioritizes Express Gold orders ahead of Standard and Economy, resulting in a faster delivery time. LegalZoom advertises, but does not guarantee, that Express Gold orders will be completed and ready to ship within 7-10 business days.

Free 2 day shipping is included in the Express Gold package. Next business day shipping can be be purchased at a discounted rate of $7.

Express Gold does not include the cost government filing fees. Since legalzoom files Express Gold orders with state and government agencies on an expedited basis, filing fees are typically between $50 to $100 higher for Express Gold orders than for Standard or Economy orders.

Express Gold customers typically pay a total $450 or more to complete their purchase.

Is LegalZoom Express Gold a good value?

For most individuals, LegalZoom Express Gold will not be a cost effective option. You can achieve comparable order processing speed and save over $200 by ordering a basic service package from an alternative service providers, such incfile, and upgrading to expedited state processing. Free 2 day shipping and $30 off EIN filing don’t provide enough value to justify the high price tag for this service tier.

Additional Services & Features

In addition to the services and features included in LegalZoom's package options, customers can purchase additional premium services and features during LegalZoom's check-out process.

Registered Agent Service

For $149 per year, you can have LegalZoom act as your registered agent.

Note: To learn more about the role of a registered agent and why you may want to hire a professional service, check out our article: what is a registered agent?

EIN Procurement

For $79, LegalZoom will obtain an employer identification number (EIN) for your business. An EIN is needed to open an bank account and file taxes if your LLC has employees. LegalZoom’s EIN procurement service is priced competitively.

Compliance Package

LegalZoom offers its compliance package to help new businesses stay compliant with state and federal requirements. Services included in this package vary from state to state, but typically includes preparation and filing of your LLC’s annual report (if applicable in your state of registration), notifications of upcoming filing deadlines and a tool to manage your company minutes. The cost to purchase this package is typically around $250.

If you are considering purchasing LegalZoom’s compliance package, consider as follows:

  • You will can also be notified of upcoming filing deadlines by purchasing LegalZoom’s Compliance Calendar for $69, or by subscribing to LegalZoom’s registered agent service, which comes bundled with the Compliance Calendar.
  • You can pay LegalZoom to file annual report on behalf of your LLC for just $33 if you do not purchase the compliance package.

Although the LegalZoom’s Compliance Package comes with a high price tag, you live in a state such as Alabama or New York with complex or unusual LLC maintenance requirements, selecting this option could end up saving cost and headache down the road. Due to LegalZoom provides a wider range of state-specific filing requirements to keep you compliant than alternative business filing services.

Business License Research

For $79, LegalZoom’s partner will provide you with a list of federal, state and local permits that may be needed to run your business. LegalZoom offers this service for about $20 less than any other service provider we reviewed. This service only includes researching applicable licenses and permits and does not include filing of permit applications.

Business Advantage

Standard: For $7.99 per month, you can get access to LegalZoom’s library of legal forms, including contractor agreements, NDAs and much more.

**Note: We offer a limited number of free business legal forms as well. Register or sign in to our Business Center to access them.

Pro: For $31.25 per month, you additionally gain access to an unlimited number of 30 minute consults with lawyers in LegalZoom’s network.

Order Process

We found the process of forming an LLC using LegalZoom to be easy and straightforward.

When you start your order, you will be prompted to approximately 20 questions about your business, including name of the business, type of business, and information about each of the owners. To help you complete the order processing, LegalZoom provides lots of guidance and instruction as you fill in the questionnaire.

Once you have provided details about your business, LegalZoom will present several promotional offers. Reviewing these offers adds about 5 minutes to overall order process.

Note: LegalZoom may automatically opt you into expensive, paid subscription services during this phase of the order process. Be careful to deselect any services you don’t want to avoid unexpected charges.

The entire order process should take no longer than 15-20 minutes. In case you are unable to complete an order in one sitting, LegalZoom emails a link to your saved answers, giving you the option of completing your order at a later time.

Order Assistance

LegalZoom provides a call-in line and live chat option for help and support placing orders. We contacted the order helpline to ask some questions about LegalZoom’s compliance package. A support specialist picked up immediately and was friendly and responsive, but not highly knowledgeable about state specific formation details and LegalZoom product features. It took over 20 minutes and 2 phone transfers to resolve our question.

After you complete your order

Once you complete your order, LegalZoom sends you a digital receipt and order confirmation via email. You will also be prompted to create an online account so that you can conveniently view your order status and an estimated order delivery date from an online dashboard. In addition, if you ordered LegalZoom’s Registered Agent Service, Compliance Package, or Business Advantage Service, you can also access these tools and services via your online dashboard.

LegalZoom Online Dashboard

Once your order is completed, LegalZoom mails you a package including all LLC formation documents, paper copies of your personalized operating agreement, and the personalized corporate kit if you ordered the Standard or Express Gold package.

Our economy kit included the following:

  • Welcome letter with next steps
  • Articles of Organization filing endorsement
  • Personalized operating agreement
  • Financial authorization letter
  • Help Guide
  • 5 member certificates
LegalZoom Economy Order Contents

Service Quality

Overall, we had a positive experience forming an LLC using LegalZoom. Although Economy orders are advertised as taking 30 business days to complete, LegalZoom managed to complete our order in just under two weeks without any errors or issues. On the other hand, we had a below average experience with LegalZoom customer support and are take issue with some of LegalZoom’s billing and pricing practices.

Order Fulfillment

To help ensure a smooth filling process and provide good quality of service, LegalZoom reviews all information you submit to check for common errors and typos (a) before filing and (b) once more before shipping you final paperwork. LegalZoom calls this their “Peace of Mind Review.”

Customer Support

While it’s inevitable that a company processing as many orders as LegalZoom will leave some customers dissatisfied, the quantity of online complaints and negative reviews about LegalZoom’s quality of customer support is concerning. Sites like yelp and Better Business Bureau are filled with negative comments from customers who feel that LegalZoom failed to notify them about a problem, were unwilling to help resolve a problem, or handled them in a rude or unhelpful way.

Our own experience with LegalZoom customer support was underwhelming. In contrast to the immediate response received when contacting LegalZoom’s order specialist team, we had to wait on hold for several minutes to connect with a support representative. We finally connected with a rep who was only marginally helpful and seemed eager to end the call.

Customer Satisfaction Guarantee

LegalZoom provides a customer satisfaction guarantee. If you are not satisfied with LegalZoom’s service, within 60 days of purchase you can request your money back. However, LegalZoom will not refund any refund any money paid to government entities, such as state filing fees.

Cost Transparency & Billing Practices

We have a two major gripes with LegalZoom’s pricing and billing practices.

  • In some states, “state filing fees” appear to be inflated by as much as 25%. Since this is advertised as a pass-through charge, LegalZoom should not be building profit margin into this fee.
  • LegalZoom’s annual subscription services, such as the compliance package and the registered agent service, are set to auto-renew without the customer opting to continue service. We feel this is not a customer friendly practice as some customers may not remember to cancel services they no longer use.

Conclusion

LegalZoom may be a good option if you:

  • Want to work with an established brand to form your LLC
  • Are willing to a pay extra for premium services and features
  • Are not in a rush to form your LLC or are willing to pay a considerable premium to expedite your order
  • Need to form a professional LLC (PLLC)

You should consider an alternative LLC formation service if you:

  • Are willing to a pay extra for premium services and features
  • Are interested in getting the most value for your dollar
  • Need to form your LLC quickly and are not interested in paying a significant premium to expedite your order.

Form LLC With LegalZoom ($149 + State Fees)