Direct Incorporation vs LegalZoom (Who’s Perfect For You?)
Are you forming a new LLC, but you don’t know where to turn for assistance?
In this Direct Incorporation vs LegalZoom comparison, you’ll find detailed info on their common characteristics, as well as what sets them apart. By the time you’re done, you’ll have a better picture of which one you should use.
* Note: If you would like to compare the top LLC services, we reviewed and ranked the best based on overall value-price-reliability. See Comparison.
With Direct Incorporation and LegalZoom, we’re talking about two of the most popular options in the entire LLC formation industry, and they’re both easy to recommend. However, LegalZoom has a few minor advantages that tip the scales in their direction.
First off, LegalZoom has more experience than basically any other company offering LLC service, as they’ve served over 2 million customers. Furthermore, their extended customer support hours can come in really handy.
If you would like some more information before making your choice, read on to discover all the details of these two respected service providers.
6 Things They Have In Common
1) Affordable: Direct Incorporation and LegalZoom can both save you hundreds of dollars over hiring a traditional law firm. Seeing as many LLCs are relatively simple business structures, you may not even need the expertise of an attorney to draft and file your formation documents.
2) Customer Support: Even though it’s much less expensive than a lawyer, a service like Direct Incorporation or LegalZoom can still make your life quite a bit easier than the DIY route. Their customer support reps can help with any questions you might have, saving you countless hours trying to find your own answers.
3) Experience: If experience is a priority for you, both of these companies have plenty of it. LegalZoom and Direct Incorporation have each handled thousands of LLC formations, and they have the expertise necessary to do the job right.
4) Additional Services: If you need other business services, including anything from foreign qualifications to federal tax ID (EIN) obtainment and more, they can help. Both of these companies offer many other business solutions making them one-stop shops for your company.
5) Security: Your online security is important to these companies. LegalZoom uses Norton Web Security which protects from malware, while also encrypting all data transfers. Direct Incorporation uses Authorize.net to verify their merchant identity and prevent fraudulent transactions.
6) Educational: LegalZoom and Direct Incorporation have extensive learning centers on their websites. Even if you don’t end up purchasing services from them, you can find lots of information on everything from formations to ongoing compliance issues.
Side by Side Comparisons
Direct Incorporation’s base rate of $147 is nearly identical to LegalZoom’s $149 price point.
With Direct Incorporation, you’ll receive a federal tax ID number (EIN) which allows you to file business taxes, hire employees, etc. While LegalZoom doesn’t include an EIN in their LLC formation packages, they do provide a banking resolution to help you open a business bank account.
The two companies have some significant differences in the higher-priced packages. Direct Incorporation’s top-tier package focuses on things like web design and trademark protections, whereas LegalZoom’s top package is centered around expedited processing.
LegalZoom is one of the industry giants, with over 2 million business clients, and they’ve been around since 1999. Direct Incorporation opened in 2003, and as a mid-sized company they’ve served over 60,000 customers since then.
Direct Incorporation has a strong service team, with knowledgeable professionals answering the phone and providing ongoing support. Also, many customers mention in their reviews (which we’ll get to in a moment) that they appreciate the quality support they receive. Direct Incorporation reps are available from 9am to 6pm ET Monday through Friday.
With LegalZoom, their support isn’t quite as consistent, likely because they’re such a huge operation. The more reps you need answering your phones, the less likely it is that every one of those support agents will be top-notch. One thing that we do consistently enjoy about their support is the extended hours. Their service reps are available from 8am to 10pm ET Monday through Friday, and 10am to 7pm ET on weekends.
Direct Incorporation’s turnarounds are based on your state of formation, and you can view a list of estimates for every state on their website. LegalZoom does things a bit differently, as they base their estimates on what level of LLC service you purchase. Their top-tier Express Gold package is the fastest (7-10 business days), followed by Standard (15 days), and Economy (30 days).
Registered Agent Service
LegalZoom provides registered agent for $159 per year. Unfortunately, Direct Incorporation does not offer registered agent service. (What is a Registered Agent?)
Direct Incorporation only has a few dozen reviews available online, but their feedback is mostly positive. There are a few people that mention problems in their reviews, but it seems like the majority of their customers are quite pleased. LegalZoom’s feedback is a bit more mixed, as their 1,500+ reviews seem split roughly equally between positive and critical feedback.
Ease of Use
We give a slight advantage in this area to LegalZoom, as their website is a bit more modern and streamlined than Direct Incorporation’s site. Other than that, both of these providers offer convenient services that are effective and efficient.
Best Service for LLC Formation?
Direct Incorporation and LegalZoom are among the top LLC formation services online, and they’re both wholly capable of helping you form your LLC. Still, some of you likely remain undecided, so to help you choose we’ll close by reviewing some situations where you may prefer one over the other.
Choose Direct Incorporation if You Are:
In some states, their service is quicker than LegalZoom’s, so if that’s the case in your state of formation, Direct Incorporation can be a good fit. Also, if you need the advanced features in their top-tier packages like trademark protections and web design, give them a look.
Choose LegalZoom if You Are:
If you appreciate their brand power and large volume of customers, LegalZoom should satisfy your needs. Also, they offer registered agent service which Direct Incorporation lacks.