Both Incfile & LegalZoom are known as business formation services. This means they assist in the formation of a distinct legal entity – a business, in other words. Both of these enterprises assist with this key feature.
LegalZoom, however, goes a step further in the sense that it allows a wider range of legal functions – from wills to trademark registration. Incfile, on the other hand, allows for the preparation and submission of tax forms, and even goes as far as to provide a 30-minute tax consultation. But it is LegalZoom that is the more in-depth legal service.
Below, I’ll outline the two enterprises side by side for comparison, with a focus on business formation. I like both of these providers for different reasons. The main thing to keep in mind is to know what you are looking for. This makes it easier to select platforms that do what you need, in the time you need it, at the price that you expect.
Table of Contents
Incfile vs LegalZoom: At a Glance
|Price For Business Formation|
|Speed Of Business Formation|
|Range of Services|
Incfile & LegalZoom: Head-to-Head
So, what are the primary differences between Incfile & LegalZoom? They have already been touched upon above. Incfile is solely a business formation company. It helps you to form a company quickly and easily. It also helps you to stay in compliance with the submissions of certain tax and legal documents. With Incfile, you also get a free 30-minute tax consultation.
Aside from the free 30-minute tax consultation, LegalZoom provides the same features in terms of company formation. However, it also provides a plethora of associated legal services including custom legal forms, trademark registration, intellectual property, and access to attorneys. It is close to a full legal service. This can save you a lot of money as you don’t have to pay for an in-house legal team. You can avail of all of the legal features and only have to pay for specialized, specific legal services when you need them.
The best summary of the differences is that LegalZoom is an online legal service. Incfile is a business formation service. They serve 2 different purposes but overlap in terms of business formation.
Incfile offers all the core features for business formation. This would include the formation itself, as well as annual compliance. It does this quickly and at a great rate in comparison to LegalZoom. There are 3 tiers and Incfile allows 12 months for a free registered agent. The registered agent is necessary for new companies, being a legal requirement. You can form for LLCs, S-Corporations, C-Corporations, and NonProfits. Before you form your business, it’s best to learn the difference between all the various legal entity types.
LegalZoom offers a much more diverse range of legal services in comparison to Incfile. It allows users access to a network of attorneys. This access is not included in the basic cost, however. Other functions include the ability to create over 100 custom legal documents and trademark registration, including operating agreements and the drafting of wills. You have to pay extra for the registered agent with LegalZoom, from the first year onwards.
|Custom Legal Forms||✗||✓|
|Network Of Attorneys||✗||✓|
|Free Tax Consultation||✓||✗|
|Web Hosting & Domain Name||✗||✗|
When it comes to pricing, Incfile is simply far cheaper in comparison to LegalZoom. It offers a free registered agent for the first year. This typically costs around $120. Compliance alerts are free. A 30-minute tax advisory service is also free. It costs $0 to file with Incfile, aside from the state filing fees, which can vary greatly state by state. Incfile is an affordable way to start a new business, such as an LLC or Corporation.
The cost of company formation with LegalZoom starts at $80, excluding the state filing fee. It costs $320 a year for annual compliance alerts. And the registered agent costs $159 per year. Already, you are paying more than $500 to simply start and maintain a company as compared to Incfile. This is a significant financial expense. However, you are really paying this extra initial expense to avail of all the other legal services, particularly the ability to create legal forms for as low as $8 per month. After all, when the business is formed, it is done and dusted. It could work out more cheaply over the long term, depending on your legal needs.
Incfile Basic Plan
LegalZoom Basic Plan
|Order Processing Time||Next Business Day||30 Days|
|Registered Agent||Free For One Year, Then $119 Per Year||$159 Extra Per Year|
|Operating Agreement||$40||$99 Extra|
|EIN Registration||$70 Extra||$60 Extra, Must Be Bundled With Operating Agreement For A Total Of $159|
|Annual Compliance||Free Lifetime Company Alerts||One Month Free. $320/Year After|
|Advisory Services||Tax: Free 30-minute Consultation||No|
|Web Domain & Hosting||No||No|
The speed of formation for Incfile is much swifter than LegalZoom. Incfile boasts a one-day order processing time, in comparison to 30 days from LegalZoom! This is critical to those who are looking to form their company quickly. No matter which tier you purchase, Incfile processes all business formation filings by the next business day – exactly what new business owners are looking for.
LegalZoom offers a 30-day guarantee on company formation. It typically delivers on company formation between 3 – 4 weeks. However, this is not exactly the most rapid form of delivery, all things considered. There are many online legal services that can form your company within a week, at a fraction of the cost. Legal Zoom is just incredibly slow when it comes to business formation. They make you pay extra for faster filing. Their regular processing time is 20 to 35 business days. Even the most expensive LegalZoom plan with expedited filing takes seven to 10 business days of processing time.
Incfile has good customer reviews, though they are recently sloping a little negative. The company has an A+ rating on the Better Business Bureau and nearly a top customer rating on the same platform. Many clients have found the business formation and compliance processes were clear and easy to understand. The transparent pricing model is also very appealing. A few customers complained that the company didn’t communicate well and didn’t provide services by the stated deadline. The entire user experience is easy and streamlined, with a transparent pricing mechanism.
LegalZoom gets mixed customer reviews, and a lot of this may have to do with the pricing mechanism. It seems to be designed to drain money from people in any way possible. LegalZoom has an A+ rating on Better Business Bureau but actually has a poorer rating from customers on the main site. The main complaint was that LegalZoom charged user accounts for services they didn’t receive or else charged the wrong amount. They also tend to charge users without their authorization. The platform itself is quite easy to use and streamlined. The user experience issues that arise are mainly technical.
Customer service is an area where neither Incfile nor LegalZoom tends to excel. With Incfile, it’s pretty much an answering machine that puts you on hold. The thing with Incfile is that either your company will be perfectly formed by the next day at a low price, or you will have an absolute nightmare with an unresolved issue due to pretty much non-existent customer service. Even on review sites like TrustPilot, there is no team responding to complaints right now. There is no weekend phone support with Incfile. They rely on the process running smoothly and have almost no resolution procedures in place.
LegalZoom fares better in terms of customer service. LegalZoom has an FAQ page on their website, and you can also email them with questions, similar to Incfile. Phone support is available Monday to Friday 5 AM to 7 PM and Saturday 7 AM to 4 PM Pacific Time. I called up both Incfile and LegalZoom, and have to say I was far more impressed with LegalZoom. I got talking to a representative with LegalZoom within 10 minutes. I hung up on Incfile after 40 minutes on hold.
When to Choose IncFile?
Incfile excels when it comes to business formation. If you are looking to form a company by tomorrow without fees (aside from state filing fees), then Incfile is perfect. Low-cost, no-nonsense business formation is exactly what most new business owners are looking for. And a free registered agent for the first year means that you are pretty much saving yourself $120.
You could always start off with Incfile for easy business formation and then transfer over to LegalZoom for its legal capabilities. This is one way of going about things if you want to get set up fast and affordably but may later require more extensive legal services. Really, there is no good reason for the sloppiness of LegalZoom when it comes to the speed of their business formation services. The premium service they offer costs a lot more and still allows only a 10 day formation time, which is too slow.
Incfile allows rapid and affordable business formation for LLCs, C-Corporations, S-Corporations, and non-profits. If you want to get started quickly without hassle, use Incfile.
When to Choose LegalZoom?
LegalZoom is for business owners who have a real need for legal services, particularly custom legal form creation and trademark protection. Certain business models will frequently deal with legal forms and LegalZoom offers this service for $7.95 a month, along with all of its other services. In other words, nobody really uses LegalZoom for its business formation services, as they are way too expensive. And one thing I dislike about LegalZoom is that way it is geared for profit for simple services, with fees that are needless and don’t make much sense.
You would only choose LegalZoom when you want an all-in-one online legal service for a variety of purposes. LegalZoom provides this and you can have easy access to a lawyer when you need one. So if you require legal help on an ongoing basis for multiple tasks, then it is best to bite the bullet in terms of getting started financially and opt for LegalZoom.
LegalZoom can also help you to file a DBA and to convert your existing business to an LLC. They offer a Business Advisory Plan subscription service to get assistance from a network of attorneys. Despite the added costs for business formation, LegalZoom is a service that can help you to cut down on legal expenses so that you ultimately save money. There are resources on this platform for all aspects of successfully running a business, at least from a legal perspective. Incfile does not do this – it is purely a business formation and compliance platform.
Incfile and LegalZoom are both established and well-respected enterprises. But they serve different purposes. Incfile clearly excels when it comes to business formation. It is fast and affordable. LegalZoom is poor at business formation. It is expensive and slow. Then again, LegalZoom is an online legal services company, while Incfile is merely a business formation platform. They serve different purposes, depending on what you are looking for.
The bottom line is that if you are looking for online legal services, choose LegalZoom. If you are looking for business formation, choose Incfile. If you are looking for both, you can form with Incfile and migrate to LegalZoom, or you can simply pay extra and form your business with LegalZoom.