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LegalZoom Review

LegalZoom believes in a world where every business has access to a trusted attorney and one where you can find a reliable partner to help you start and run your LLC. This highly reputable company has nearly two decades of experience. During that time, LegalZoom helped establish more than two million businesses.

But is reputation enough to justify the relatively high cost of the service? To help you decide, check out all the pros and cons in our detailed LegalZoom LLC review.

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Editorial Rating

Strengths

  • Good reputation
  • Beginner-friendly interface
  • Unlimited legal consultations
  • Total compliance feature
  • Manual double-check
  • Lifetime customer support
  • Money-back guarantee

Weaknesses

  • Expensive
  • Slow processing time with basic plans

Breakdown

PRICE STARTS AT

$79 + state fees

PROCESSING TIME

30 business days (Economy plan)

REGISTERED AGENT

$249/year

OPERATING AGREEMENT

Yes

EIN REGISTRATION

Depends on the package

ANNUAL COMPLIANCE

10 free + $280/year

ADVISORY SERVICE

Unlimited legal and accounting consultations

WEB DOMAIN & HOSTING

No

LegalZoom Overview

Launched in 1999, LegalZoom is one of the oldest and most reliable online LLC formation companies. This is an important bit of information because if you plan to hire someone to handle all the complicated legal requirements related to starting and running a business, you need to make sure the company has the right amount of experience and a stellar reputation.

The most notable downsides that we came across in our LegalZoom incorporation review relate to the application process and the cost of the service. The process is quite slow both on the site and when it comes to the actual filing. Avoiding additional expenses is challenging, and it takes 30 business days for your application to be processed with the cheapest plan.

So does the slow and steady approach work in today’s fast-paced world? Not really.

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Available Plans

The company offers three main service packages starting with Economy and followed by the Standard package and Express Gold. But the company’s web design makes it difficult to gain direct access to the LegalZoom LLC pricing page. You either have to Google the price or endure the needlessly complicated startup wizard.

These sorts of inconveniences are not something you’d expect from the best LLC formation company.

LegalZoom Economy LLC Package

Economy is the cheapest LLC registration package and costs $79 +the state filing fees. The plan guarantees a processing time of 30 business days, which is a lot when compared to industry standards. The package is likely designed to give you a taste of the service before trying to upsell you. Let’s review LegalZoom features within this plan:

  • Name check and business filing: The company checks if the name you chose is available in your state and files all the necessary documents. This is the core function of every LLC filing service. Given the company’s great reputation, you can rest assured that you’re getting a high-end service.
  • Articles of organization: This is an essential document for business incorporation that has to be filed properly. The format can differ from one state to another, so it’s good to contract a company that’s familiar with all the options.
  • Peace of Mind review: In order to ensure accuracy, the LegalZoom document review is done manually for every client. It’s the final step that involves double-checking the files before they’re sent off to the state. LegalZoom dubbed the process Peace of Mind, but this particular feature is often blamed for the slow processing time.
  • Financial account authorization letter: You will need this letter to set up your bank account. It’s an essential document and rightfully part of the company’s basic service.
  • Next Steps guide: The entire service is beginner-friendly, so it’s only logical that customers are provided with an easy-to-use guide for setting up a business. But LegalZoom.com reviews rarely mention this feature, which suggests that it isn’t very popular.
  • Lifetime customer support: Commendably, the company offers lifelong support to all its customers, regardless of the package you choose. LegalZoom customer service agents will be there to assist you during the filing process and when you get your business up and running.

Standard LLC Package

LegalZoom makes quite a price leap with its next package. The so-called Standard option costs $329 + state filing fees. But aside from the shorter processing time, which amounts to 15 business days with the Standard package, the additional features don’t really justify the price hike. In any case, the processing time is still less than impressive when compared to other companies that are cheaper than LegalZoom.

  • Founder’s Kit: This is a fancy name for what is essentially a collection of physical files delivered in an elegant binder. You get various certificates, foundation documents, deluxe organizer, and an embosser stamp with your company name on it. While it’s a nice package, it might not be worth the additional $250.
  • Business Newsletter: The second feature comes in the form of a business newsletter subscription. The newsletter is tailored to beginners, and you get useful tips on how to manage your LLC.
  • VIP processing: The greatest asset in this package is the faster processing time. LegalZoom will review your application in 15 business days. But this doesn’t include the filing process and approval times at the state level.

LegalZoom Express Gold Package

This is the fastest option for filing your documents. It costs $349 + state filing fees, and you can get everything done within 10 business days. Signing up for this package puts you at the front of the queue at LegalZoom and speeds up the LLC formation process with the state. Of course, approval times vary depending on the state you are in.

But numerous LegalZoom reviews online complain about the list of features that are on offer with the company’s most expensive plan. Aside from expedited filing time, Express Gold unlocks some undefined company discounts, and ensures express shipping of your physical files.

What you’re actually paying for with all of these packages is time. If you want things done quickly with support from a reputable filing company, LegalZoom delivers.

Customer Service

Although the company offers lifelong customer support, a number of LegalZoom reviews on the web accuse support agents of being impatient and even rude.

While this may be true, it should be noted that customer support doesn’t always reflect the company culture and the general approach to dealing with clients. The company’s representatives on the LegalZoom BBB profile are more than happy to respond to user complaints and address any shortcomings.

Ease of Use

The application process is suitable for first-time users while being frustratingly flawed at the same time. On the one hand, the startup wizard guides you through all of the features in great detail, and you can always learn more about each segment by scrolling down or clicking on relevant options. Our LegalZoom LLC review gives the company top marks in this category.

But the company aggressively promotes its add-ons throughout the entire process. You might end up with a costly subscription even before you reach the main packages. Because of the overwhelming amount of information, the on-site application is quite slow and laborious.

Here are all the steps you need to go through to reach the checkout:

  1. Name your company: LegalZoom checks whether your name is available as a part of its basic service.
  2. Choose a state: This is a standard second step to determine state filing fees. You are reminded that most users select their home state to avoid additional fees.
  3. Provide email and phone number (optional): LegalZoom reviews the LLC name you chose in your state and claims it if you decide to provide your contact information.
  4. Answer questions: LegalZoom lobs a series of questions at you about the company’s launch date, your field, and experience.
  5. Go through add-ons: You are presented with an overwhelming amount of services and packages that are mainly subscription-based.
  6. Choose LLC package: At this point, you would have already chosen most of the packages and services.So you’re basically just selecting the processing speed.
  7. Bank of America offer: With one step away from checkout, the Bank of America offers you a bonus for setting up an account there.
  8. Checkout: You receive a receipt where you can see exactly how much each item costs.

As numerous LegalZoom reviews confirm, this is a lengthy and often confusing process that should be a lot more optimized. If you create an account, you can save your progress at any time or choose the ScreenShare option to allow LegalZoom customer service to guide you through the entire application process.

Incorporation (Turnaround) Time

Processing times depend on the package you choose:

  • The Economy package offers a processing time of 30 business days with no special treatment.
  • The Standard package speeds things up and the process takes 15 business days.
  • The Gold Express option prioritizes your LLC LegalZoom review, and your application is processed in seven to ten business days. Signing up for Gold Express will also speed things up at the state level.

Extra Services and Features

LegalZoom’s interface is undoubtedly beginner-friendly with a detailed explanation about each section on the site. But it also serves as a vehicle for upselling. Before you even get a chance to sign up for one of the main packages, you are bombarded with additional features that aren’t exactly cheap. Below is a list of those add-ons:

Registered Agent Services

Most formation companies also offer to act as a registered agent simply because you are legally required to have one. For a price of $249/year, you can rely on the LegalZoom registered agent to review all of the official files sent to your company’s address. The agent will identify, scan, and catalogue your documents, send you alerts if you receive anything from the court, and get rid of your junk mail.

Note that the subscription doesn’t start until your documents are submitted. Also, the aforementioned price is only for the first year, while renewal costs vary.

Essential Documents

The essential documents are categorized into three different packages:

  • Operating agreement ($99): This is fundamental paperwork that defines various aspects of your LLC, especially when it comes to co-owners. When you add this amount to the overall LegalZoom cost to set up an LLC, it’s not a bad deal. A lawyer might charge you at least three times this amount to draft up the agreement, and the price might go even higher for multiple members. In any case, this is obligatory with every package at the company.
  • Operating agreement + EIN ($159): EIN refers to the Employer Identification Number, which is assigned to your LLC by the IRS. You can apply for this number at any time, and it won’t cost you a penny. You’re simply paying LegalZoom to submit the application in your name.
  • Operating agreement + EIN + Licenses ($199): The third package comes from the company’s partnership with Business Licenses. We can’t really recommend this package in our LegalZoom review because it’s unclear exactly what you’re getting for your money. While your business may require some special local or state licenses, it seems wasteful to pay for a service you might not end up needing.

LegalZoom Smart Employer

With the Smart Employer subscription you get legal and tax services as well as a library of useful document templates. The service is free for the first 10 days, after which it costs $39.99/month. It’s important to note that this doesn’t mean you’ll be getting your own lawyer at a low price.

The company uses clunky phrasing to explain that you get “unlimited 30-minute consultations” with independent attorneys. According to online LegalZoom reviews for LLC, this translates into a 30-minute session anytime you hire a new employee or have a specific legal issue to deal with.

The library of templates is quite useful, especially since it can be personalized for your company. It saves you money in the long run because you won’t have to visit a lawyer every single time you need something like an employment agreement.

LegalZoom Compliance Package

Compliance is one of the most important elements in our LegalZoom LLC review. This service ensures that your company never misses a filing requirement or deadline. You are basically putting the company on autopilot for $280/year. You can test out the service during a 10-day free trial period, but since this is a long-term commitment, that short period of time might not be especially useful.

The company covers all fines and penalties for any late compliance, and there are no LegalZoom complaints online suggesting that they’ve ever reneged on those promises.

Bank of America Bonus

Bank of America often makes deals with business formation services, offering special deals to entrepreneurs. At LegalZoom, you can get a $450 bonus for performing various account activities. While this may seem like a great opportunity to pay off some of the company’s additional features, don’t start celebrating just yet. Like with any other bonus, there are requirements you need to meet.

Following the LegalZoom DBA review, the bank will offer you $100 when you open an account at one of their branches and deposit at least $1,000. You can get an additional $50 if you pay at least two bills using the Bill Pay service. Finally, to get the remaining $300, you have to use the bank’s credit card and spend at least $3,000 within 90 days of opening a card account.

The Bottom Line

LegalZoom goes out of its way to accommodate beginners. If you’re new to all this, you’ll enjoy the abundance of information during the application process as well as the ScreenShare option that makes everything seem like a guided tour.

However, almost every review of LegalZoom on the web laments the slow application process, unhelpful customer service agents, and the high cost of the service. Whether the company’s many years of experience manage to drown out some of these flaws depends on your personal needs.

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Editorial Rating

LegalZoom Q&A

Is LegalZoom a legit company?

LegalZoom currently holds an A+ score at Better Business Bureau and a 4.5/5 at TrustPilot based on nearly 500 reviews. The company has been in business for nearly two decades, so it’s fair to say that it’s a fully legitimate operation.

Is LegalZoom good for LLC?

LegalZoom is a reliable company with many years of experience. However, as you can see from our LegalZoom LLC review, there are a number of obvious downsides including fairly high rates when compared to the competition.

How much does LegalZoom charge for an LLC?

The most affordable LLC package costs $79 + state filing fees with a processing time of 30 business days. The Standard package costs $329 and completes the process in 15 business days timeframe, while Express Gold delivers in under 10 days for $349.