Do you need to incorporate a business but you can’t figure out which incorporation service has your best interests in mind? ZenBusiness and LegalZoom are two of the top companies online and they each have their own pros and cons when compared to each other.
This comparison guide takes a look at the five key factors you need to consider when deciding which service is the better fit for your business. Let’s find out whether LegalZoom or ZenBusiness is the right choice to form your company.
Comparison Based on 5 Key Factors
When we reviewed each of these service providers, we performed a stress test on each, which was based on the following five crucial factors:
- Compared pricing and features to determine the overall value of each service.
- Researched their track record based on how many companies they’ve formed, as well as how long they’ve been in business.
- Assessed the quality of customer service based on reviews, and on our own personal experiences.
- Walked through the ordering process to determine each service’s ease of use.
- Reviewed the turnaround times for incorporating.
That said, as you’ll see in our ZenBusiness vs LegalZoom comparison of these five key factors, ZenBusiness wins out as the better incorporation service. They are $110 more affordable, have better features and excellent customer reviews online.
Overall Pricing and Value
ZenBusiness: Their best attribute in this area is the fact that they’re the only service provider we know of that has a $39 incorporation package. Not only is this the lowest price we’re aware of for nationwide incorporation service, but it includes registered agent service, a CPA assessment, and corporate bylaws. Their $149 package is also intriguing, because it adds several valuable features: annual report service, compliance monitoring, federal tax ID number (EIN), and a banking resolution.
LegalZoom: LegalZoom is incredibly popular, as they have a customer volume in the millions, and they also have tremendous brand power due to their sizable advertising budget. However, that doesn’t necessarily mean that they provide a more valuable service than their competitors. Their cheapest incorporation package has a $149 price point, and it includes no noteworthy advanced features. They also don’t include registered agent in any of their packages, and they charge a variable fee of $159-299 per year to add it on.
Winner = ZenBusiness
ZenBusiness has a much stronger value-per-dollar ratio than LegalZoom does. They offer a $39 incorporation package, which is a tremendous value compared to LegalZoom’s $149 base-rate price point. Plus, registered agent through ZenBusiness at $119/year is much cheaper than LegalZoom’s $159-299 annual fee.
Company Track Record & Experience
ZenBusiness: They’ve only been open since 2015, but they’ve served thousands of customers already and are showing no signs of slowing down. They receive spectacular feedback from their clients as well, as their hundreds of reviews are almost all positive.
LegalZoom: LegalZoom has been around since 1999. With 3.6 million customers served (about half of which are business clients), they handle a higher volume of customers than just about any competitor. However, their customer reviews are not a strength, as they have a relatively equal amount of one-star and five-star reviews available online.
It’s a tie!
These companies each have a distinct advantage over the other in this category. LegalZoom has an incredible experience track record that ZenBusiness can’t compare to, but ZenBusiness receives excellent customer reviews, while LegalZoom gets more of a mixed bag. Overall, we’ll call this category a draw, although we would understand if you prefer one or the other based on how much you value experience vs. customer reviews.
Customer Service Comparison
ZenBusiness: You can access the ZenBusiness customer service department by phone, email, or through the chat application on their website. In our experience using these three options, we’ve always found that their reps are helpful and friendly, and we never have to wait very long to get a response from them. Their hours run from 9am to 7pm ET, Monday through Friday.
LegalZoom: LegalZoom provides support via email or phone, and we’ve used both of these options several times. Their email support can have some very long response times, as we’ve waited about a week to get a reply before, and their responses are typically just form emails that don’t address any specifics. Their phone support is a different story though, as their representatives go into detail when responding to our questions, and they’re always easy to get ahold of. LegalZoom’s extended support hours are great too, as they’re available from 8am to 10pm ET on weekdays, and 10am to 7pm ET on Saturdays.
It’s a tie!
In general, we prefer ZenBusiness’ support because they have much shorter wait times for responses via email/chat than LegalZoom does. However, LegalZoom has an advantage for availability hours, so we’ll call this category a tie.
Ease of Use
ZenBusiness: You can fill out their order form quite quickly, and their instructions are simple and straightforward. The only things you need to do to get the ball rolling with ZenBusiness are select the package you’d like to purchase, and provide them with some basic information about yourself and your company. We will note though that they have a few upsells and third-party offers spread throughout the order form that can be a bit distracting.
LegalZoom: LegalZoom structures their ordering process differently than most competitors. Instead of starting by selecting your package and then building your order from there, LegalZoom has you start by entering your personal information. After that, they lead you through a series of expensive upsells (exceeding $1,000), before finally letting you select your formation package. It’s a convoluted process that can sometimes result in higher-than-expected total costs.
Winner = ZenBusiness
While both of these companies have some upsells, LegalZoom certainly has more of them. It’s also a bit odd how LegalZoom’s ordering process seems to work in reverse, as you pick your add-on features before you even select the package you’re adding them onto. Overall, this category is a solid advantage for ZenBusiness.
Speed of Formation
ZenBusiness: With ZenBusiness, turnaround times are not based on each state’s processing speeds, but rather on which of their packages you select. While they do say that their turnarounds vary a bit by state, in general their Starter package has a 3-4 week turnaround, their Pro package can be completed in 1-2 weeks, and their top-tier Premium plan takes 3-5 days.
LegalZoom: They structure their turnaround times the same way ZenBusiness does, estimating by package instead of by state. With LegalZoom, their most affordable packages have a 30 business day (6 week) turnaround time, while their most expensive package can be completed in 7-10 days.
Winner = ZenBusiness
We strongly prefer when companies base their turnaround times on each state’s specific processing speeds, but these companies both structure turnarounds based on how much money you spend on their platform. That said, ZenBusiness has LegalZoom beat across the board, as their top-tier and lower-tier packages all have faster turnaround times than LegalZoom’s do.
Conclusion – Which is Better?
All told, we think ZenBusiness has a lot more to offer the majority of our readers than LegalZoom does. They’re the winner of this comparison and quite frankly one of the best options available.
While LegalZoom has some advantages of their own ― like their large infrastructure and track record ― their overall value doesn’t hold a candle to ZenBusiness. Plus, ZenBusiness has faster processing times, as well as superior ease of use.
Don’t get us wrong ― LegalZoom is such a popular company for a reason, as they do provide reliable and professional services. It’s just that ZenBusiness is an even better option in several different ways.
What Is the Biggest Advantage of Each Service?
The biggest advantage for ZenBusiness is the fact that they offer a business formation process that costs just $39 (except for your state fee), whereas with LegalZoom you’ll pay at least $149 for incorporation service.
LegalZoom has some advantages of their own though, especially their experience and customer volume, as they’ve been around for much longer and served many more clients than ZenBusiness has.
Which Is the Best Package Available From These Services?
We typically advise that our readers select the most affordable business formation package that includes registered agent service. With that in mind, we prefer the ZenBusiness Starter package for $39, which includes one year of registered agent, along with corporate bylaws, and a free assessment from one of their in-house CPAs.
After your first year, the Starter plan renews for $119 per year, which is still a great price point for ongoing registered agent service. This package truly provides everything you need and nothing you don’t.
Which Company Offers More Help With Ongoing Compliance Requirements?
You can get assistance with ongoing compliance issues from either of these companies, although their prices for providing these services have some differences.
With ZenBusiness, you can obtain registered agent service for $119 per year, and their annual report service costs $75 per year. As for LegalZoom, you can get their registered agent service for a variable annual fee of $159-299, but their annual report service is very competitively priced at $55 per year.
Can I Get a Refund if I Need One?
LegalZoom has a fantastic refund policy. If you decide at any time within 60 days of your purchase that you’re less than satisfied, they will provide a full refund of your service fees. There are no questions asked, and they don’t charge any sort of processing fee.
It’s a different story for ZenBusiness, as their refund policy is complicated. Take a look at it for yourself: “Once ZenBusiness has submitted your business for filing with the State under no circumstances can you charge-back or dispute the fees associated with forming your business. If you contact ZenBusiness before your business has been submitted for filing with the State, ZenBusiness may refund the charge, less a $50 cancellation fee, if certain conditions are met.”
Which Is the Better Option if I Need Publication Service?
In some states, you need to publish your company’s formation in a regional newspaper. For example, Arizona and Nebraska require publication for LLCs and corporations, New York requires it for LLCs only, and Pennsylvania and Georgia have this requirement for corporations only.
While LegalZoom does not handle this step for you and does not offer any sort of assistance, ZenBusiness actually offers to take care of your entire publication requirement on your behalf.
Do Either of These Services Go Overboard With Upsells?
Both of these companies have their fair share of upsells. As you work your way through the ZenBusiness Starter order form, you’ll find around $200 in upsell attempts, as they try to convince you to add on features that are included with their more expensive packages.
With LegalZoom, you’ll encounter many more upsells, as their order form has $1,080 in upsell attempts on it. Obviously, this isn’t a strength for either of these companies, but LegalZoom is certainly much worse in this regard.
Am I Required to Use a Company Formation Service?
You are not legally required to use any sort of professional service to help form your business entity. If you would rather form your own corporation or nonprofit corporation, we have a detailed step-by-step guide that you can reference throughout the process.
However, you should know that the corporation is a complicated business structure in general, and we don’t usually recommend forming your own unless you’re already experienced with the incorporation process.