Are you ready to form a company, but don’t want to put up the cash for a business attorney? Don’t have the time for all the paperwork?
Sounds like working with an online filing company might be a good move, if you want to ensure that everything is done correctly. You get more peace of mind and save a ton of money/time.
In this Direct Incorporation vs LegalZoom comparison, we’ll look at two of the big names in the industry and dive into their similarities, differences, pricing options, popular features and more. By the end, we’re confident that you’ll know which service (if either) is the best fit for you and your business goals. Enjoy!
We also highly recommend checking out our Top 7 LLC Filing and Incorporation Services guide to see who we think is #1 for starting your business.
Recommended Step Before Using LegalZoom or Direct Incorporation
It’s important to name your LLC before going through the business formation process with a professional service. TRUiC’s Free LLC Name Generator will help you to do the following:
- Find the perfect name for your new LLC.
- Conduct a name search to make sure your desired LLC name is available.
- Help secure a domain name for your company.
Because of the nature of the business, namely filing legal paperwork with state/government agencies, there’s always overlap between two providers.
1) LegalZoom and Direct Incorporation have similar pricing structures, with each of their comparable packages having roughly the same cost. Your wallet won’t be a deciding factor between these two!
2) Both companies are Better Business Bureau Accredited Businesses, with flawless A+ ratings.
3) Direct Incorporation and LegalZoom both protect their websites using Norton Web Security. In other words, your private data remains private.
4) Either way, you’ll save lots of money over hiring a lawyer. Some estimates say you can save over $600.
5) Whether you’re looking to form a sole proprietorship, or incorporating a business with 30 employees, both Direct Incorporation and LegalZoom are perfectly capable of handling your incorporation. No business too big or small!
6) Both LegalZoom and Direct Incorporation offer many services beyond simple document preparation. Think of them as one-stop shopping sites for all your incorporation/compliance needs!
What Sets Them Apart
Just like there’s bound to be some common ground between Direct Incorporation and LegalZoom, there’s also plenty of differentiation in the way these two companies approach their customers. Let’s look at the most important ways they differ:
- Direct Incorporation’s Executive Club adds a ton of value for just $13.99 per month. Subscribers get personal advice from accountants and lawyers, discounts on filing services, a fully featured compliance tool and more.
- LegalZoom includes custom operating agreements in their base package, while Direct Incorporation doesn’t. However, Direct Incorporation includes an Employer Identification Number (EIN) with all levels of service, but LegalZoom only packages an EIN with their top-tier Express Gold service.
- LegalZoom has consistent turnaround times by package: 7-10 days for Express Gold, up to about a month for Economy. Direct Incorporation varies by state, with times ranging from 3-25 days.
- If you’re looking for more than just document filing services, Direct Incorporation’s Venture package could be of interest to you. It’s expensive, but it bundles trademark protection and web design — among other features — in with your incorporation. LegalZoom doesn’t offer that.
- Direct Incorporation has served over 60,000 clients since they formed in 2003. That’s a lot of customers, but not as many as LegalZoom’s incredible claim of nearly 4 million! No one in the document filing industry can keep up with LegalZoom’s volume of customers.
We mentioned previously that both LegalZoom and Direct Incorporation are certified as A+ businesses by the Better Business Bureau.
When you get to the customer review level, LegalZoom is a bit of a mixed bag. On SiteJabber, LegalZoom maintains a 3.1 average — of a possible five stars — out of 563 reviews. The majority of LegalZoom’s reviews take a positive tone, like this one:
“Excellent customer service and so reassuring! Speaking to the sales specialist at LegalZoom was something I had dreaded, but she was great at putting me at ease and answered all my questions. I truly felt she was looking out for my best interest and not trying to sell me things I would not need. If I have additional questions, the bundle I purchased includes legal consultations and I am definitely taking advantage of that. Highly recommend!” - Kia A.
On the other side of the coin, LegalZoom has a noteworthy amount of critical reviews, like this one:
“Everything takes at least three times as long as they tell you. Plus they never follow up, and you never talk to an actual lawyer, but they’ll take your money in a heartbeat and leave you hanging.” - Jim H.
From what we can tell, LegalZoom’s negative reviews mostly boil down to people who misunderstood the services they were purchasing. This is the type of review that unfortunately comes along with being a company of LegalZoom’s size.
With their broad reach, they’re unavoidably going to pick up some customers who can’t be pleased. We’re really not concerned with LegalZoom’s reputation on the whole.
When it comes to Direct Incorporation, it’s hard to find much of anything about them — positive or negative. It’s good that they lack critical reviews — it’s pretty difficult to run a business these days without angering someone.
Still, it would be nice if there was a bank of positive reviews to point to. As is, there are at least some testimonials on the Direct Incorporation website:
"You have been so amazingly helpful! I can't tell you how nice it is to feel like you actually have someone on your side in this wacky business world!" - Jessica from St. Helena, CA
Honestly, neither Direct Incorporation nor LegalZoom rises or falls much in our estimation based on customer reviews. Perhaps you have a personal preference that slanted things one way or the other for you in this section, but overall we don’t see a big difference in the testimonial department.
Direct Incorporation Starts at $139
Direct Incorporation has three incorporation packages: Standard, Premier and Elite. They also have a fully-featured business assistance program called Venture:
Direct Incorporation has a complete state-by-state list on their website of estimated turnaround times. In some states, like Alaska and Colorado, processing can take as little as three days. While in others, like Illinois and North Carolina, you’ll need to wait 20 to 25 days — unless you pay for expedited processing.
Direct Incorporation functions a bit differently than typical document filing services. While they do have the three tiers of standard service, their Venture package is unique to Direct Incorporation.
This elite-tier option includes a full year of Direct Incorporation’s Executive Club — with benefits ranging from advice from accountants and lawyers, to discounts on filing services — along with professional web and logo design, and even comprehensive trademark protection.
LegalZoom Starts at $79
LegalZoom has three tiers of incorporation services: Economy, Standard and Express Gold.
Note: LegalZoom’s turnaround times don’t vary by state. Instead, they’re based on which incorporation package you choose.
As we discussed earlier, LegalZoom is the biggest company in the incorporation industry, with nearly four million customers in 18 years. No competitor can hold a candle to that level of experience, and it might be LegalZoom’s biggest selling point.
Keep in mind the difference in features between LegalZoom and Direct Incorporation. Neither is a clear-cut better value than the other, but LegalZoom includes custom operating agreements in even their base package, while Direct Incorporation includes an Employer Identification Number with all levels of service.
Which Should You Choose?
LegalZoom includes custom operating agreements in all packages, Direct Incorporation doesn’t. Direct Incorporation bundles an EIN with all levels of service, LegalZoom doesn’t.
The other major difference is Direct Incorporation’s Venture package, which includes pretty much everything you’ll need to get your business off the ground. From incorporation documents, to trademarks, graphics and web design, the Venture package really has it all.
Of course, not everyone needs it all! In the end, we feel that either Direct Incorporation or LegalZoom has what it takes to fulfill the needs of your developing business. Whichever you choose, we wish you a prosperous year ahead!
Recommended: Read our review of the Best LLC services.