Are you looking to form a limited liability company, a corporation, or a nonprofit, but you’re stuck trying to settle on the best formation service to use?
Choosing the right service for your business and legal needs can be difficult. That’s why we’ve carefully evaluated over a dozen of the top formation service providers, looking at and comparing metrics across several key categories, such as pricing and turnaround time.
Incfile vs LegalZoom: Verdict
While Incfile came out slightly ahead in this contest, both of these formation services have significant weaknesses – we don’t recommend using either.
Incfile offers a free basic document filing service and has average prices on their higher-service tiers. Unfortunately, the available reviews paint a negative picture of their service, with frequent mentions of delays, poor customer service, and other significant issues. Their performance in our other categories wasn’t terribly impressive either.
LegalZoom’s pricing is the main reason we rank them below Incfile, even despite Incfile’s poor customer satisfaction. LegalZoom charges some of the highest prices among all of the formation services we have reviewed. Even so, they still fail to include essential basic services with their formation packages, pushing the final cost of a basic or full formation up even further.
We focus on Incfile and LegalZoom in this article, but if you would like to get a more complete picture of all the options available to you, be sure to check out our Best LLC Formation Service and Best Incorporation servicearticles.
If you are looking for more general information on the first steps of forming a business, we recommend taking a look at our How to start an LLCarticle.
|Ease of Use||5/5||5/5|
|Help & Support||3/5||5/5|
Read on to find out more about how we arrived at our verdict in this head-to-head match-up.
Incfile vs LegalZoom: Pricing
Picking a good, affordable business formation service can save you a lot on unnecessary costs. Most services offer similar sets of products and services, yet they can sometimes charge wildly different prices. At the same time, their individual pricing structures can make direct comparisons difficult.
We look not only at the raw costs of companies’ services but also at the contents of their formation packages, in order to determine if a service is a good value or not. Unfortunately, some formation providers include products and offers with their formation bundles which are not strictly necessary. Sometimes providers lock essential services behind higher-priced tiers.
That’s why we use two standard categories, shown in the table below, in order to compare services and show how much an LLC formation with all the essential services really costs.
Both Incfile and LegalZoom include registered agent services with their business formation plans, but if you would like to compare some other options, be sure to have a look at our Best Registered Agent services article as well.
Keep in mind that the costs in the table below refer only to the service provider’s fees. You will need to pay any applicable state filing fees too – these usually fall somewhere between $50 and $150.
|Registered Agent (standalone)||$119/yr (first year free)||$299/yr|
We use these standardized terms in order to compare formation packages across services. Here’s how we define each:
Basic Formation: Covers the essentials of business entity creation. Includes – at minimum – filing of Articles of Organization and the drafting of an Operating Agreement for an LLC or corporate bylaws for a corporation.
Registered Agent (standalone): PriceIf you’re only looking for a registered agent service.
Full Formation: Additionally includes – at minimum – a registered agent service, which most owners will find essential. Price includes one year of registered agent service.
Incfile offers three formation packages: a Silver package, which is offered free of charge, a Gold package, priced at $149, and a Platinum package, priced at $299.
The Silver package is probably the most competitive (and popular) out of the three. With it, you can have your formation paperwork filed by Incfile at no cost – you only have to pay the state fees. A business name search is also included.
Unfortunately, this package doesn’t include an Operating Agreement – a document, which we consider to be essential, that bolsters an LLC’s liability protections. The Silver package does include a free registered agent service, however, you should keep in mind that this service is only free during the first year. After that, you will need to pay $119 per year or appoint a different registered agent.
The Incfile Gold package is the next step up. Priced at $149, this package adds a number of services in addition to the basic document filing. It includes an Operating Agreement and Banking Resolution for your LLC. Incfile will also file for an employer identification number (or EIN – used for tax purposes by the IRS) for your company. The Gold package also includes a tool that creates reminders for your company’s annual report obligations.
Some of the contents of the Gold package, such as a business tax consultation and the creation of a business bank account, are partner offers. Usually, we prefer to see everything done in-house, if possible.
The Incfile Platinum package is the most expensive, being priced at $299. It includes all of the services from the previous packages. In addition, Incfile will provide you with a set of business contract templates, expedited filing of your application, and a domain name (URL) registration and business email address for your company.
LegalZoom also offers its services in three packages. The most affordable option is the Economy package, priced at $79 for LLC formations and $149 for incorporations. They also offer a Standard package, priced at $329, and an Express Gold package, priced at $349.
LegalZoom’s Economy package is its most basic package. It provides a bare-bones business entity formation and includes only a business name search and the preparation and filing of your Articles of Organization with your state’s Secretary of State office.
LegalZoom also advertises that they will review your documents for errors or omissions and that they will provide lifetime customer service – but these are things we would expect as givens from any reputable service.
There are two surprising omissions with all of LegalZoom’s formation packages, given their high costs. None of them contain an Operating Agreement (if you are forming an LLC) or Corporate Bylaws (if you are forming a corporation). With LegalZoom, you have to pay an additional $99 for the drafting of either document.
These packages also do not contain a registered agent service. Having a registered agent is required by law for all business entities, and many other providers will include at least a year of their registered agent service for free with formation bundles.
With LegalZoom, you will have to pay $299 per year for this service – that’s double or even triple what most competitors charge.
The LegalZoom Standard package includes relatively few additions. Its main feature is its faster filing time of 15 business days, as opposed to 30 business days with the Economy package. Other than that, it includes a few physical items, like a corporate binder and seal and membership certificates. None of these items are essential or legally required.
The Express Gold package is LegalZoom’s most expensive offering and costs $349. It is mainly targeted at entrepreneurs who need to form a business as quickly as possible. This package reduces LegalZoom’s estimated turnaround time down to 10 business days, and also includes express shipping for your final formation documents.
Pricing winner: Incfile
Incfile is the obvious choice when it comes to affordability. With a service fee of $0, Incfile offers an unbeatable price if you’re just looking for a bare-bones document filing service. But even Incfile’s more expensive packages are still significantly less costly than LegalZoom’s alternatives, all while offering very similar services.
LegalZoom, on the other hand, demands some of the highest prices in the industry, especially when factoring in the need to pay high additional fees for basics such as a registered agent service or an Operating Agreement.
Incfile vs LegalZoom: Turnaround Time
While most services claim that they offer fast LLC formations or incorporations, the reality is that some services are significantly slower than others. The difference between services that are quick and those that aren’t can amount to several weeks, so it is important to consider turnaround time before making your final choice.
We determine the winner of this category by looking at turnaround time estimates published by the services, as well as specific commitments made by a company (e.g. a guarantee that all orders are processed within one day, or a guarantee that all orders are handled without artificial delays).
We also look at how flexible services are when it comes to expediting orders with the state (some states allow you to pay an extra fee to speed up your processing time).
Finally, we take into consideration the experiences of past customers to see if they match up with what was promised.
|Paid internal rush option||No||Yes|
|Overall turnaround time||Average||Slow|
Incfile advertises a standard turnaround time of three weeks for the majority of states, though that time can extend to as long as six weeks in some cases. For those who can’t wait that long, Incfile also offers expedited filing, which brings turnaround times down to between one and five days in most states.
Expedited filing is included for free with Incfile’s most expensive package, but can also be added as an add-on if you opt into one of the lower two packages. The cost of expedited service varies between states but is generally between $50 and $150.
You can find a breakdown of expected turnaround times on Incfile’s turnaround time page. We liked that Incfile makes an explicit commitment to file all orders as fast as possible. According to their blog, Incfile “strives to ensure that every order received is prepared within one business day.”
The amount of time it takes to form your LLC with LegalZoom depends on which package you select. The Economy package ($79) advertises a turnaround time of 30 business days, the Standard package ($329) offers a 15 business day turnaround time, and the Express Gold package ($349) promises the fastest service at 10 business days.
Unlike Incfile, LegalZoom does not treat all orders equally. Instead, more expensive packages are internally prioritized at the expense of those who picked the more affordable packages. We believe that formation services should attempt to process and file all orders as quickly as possible.
LegalZoom doesn’t provide a breakdown of turnaround times by state. Instead, they advertise the same speeds regardless of where you are forming.
Turnaround time winner: Incfile
Neither Incfile nor LegalZoom are among the fastest service providers we have reviewed. Nevertheless, Incfile’s turnaround times are a bit faster than LegalZooms’. Incfile also offers more flexibility to customers by allowing them to expedite less expensive orders as an add-on.
We also liked that Incfile commits to treating all orders the same and attempts to file them within one business day, whereas LegalZoom prioritizes more expensive orders over less expensive ones.
Incfile vs LegalZoom: Customer Satisfaction
We include customer satisfaction as a key component of our final score. Customer feedback provides us with a better understanding of how business formation services perform under real-world conditions.
To measure how customers feel about a given service, we look at independent customer reviews. These reviews can give us insight into how a service’s claims translate into reality.
We look at a number of factors, such as the average rating of a service, the total number of reviews left by customers, notable changes over time, and any relevant, stand-out mentions that come up repeatedly.
One thing to note is that, unlike Incfile, LegalZoom does not specialize exclusively in LLC formations, and, as such, some of their reviews are for services other than LLC formations or incorporations.
|Stand-out mentions||“Unreliable customer service”“Filing errors”||“Very knowledgeable” “Made things easy”“Filing delays”|
Incfile’s performance in this category is less than stellar. Their average rating on Trustpilot is 2.7 out of 5 with more than 100 individual reviews. This average rating is significantly lower than most of their competitors. A full 46% of customers rated the service with one star.
Customers mentioned a variety of severe quality issues, including Incfile’s unreliable customer service, long and unexplained delays with filings, or charges for services that customers claim they did not order. Some reviewers mention that they had to hire attorneys in order to fix filing mistakes.
Despite receiving a large number of negative reviews, Incfile’s representatives did not reply to any of the complaints or offer solutions.
LegalZoom performs significantly better than Incfile with customers. They have a rating of 4.1 out of 5 on Trustpilot, with more than 700 individual reviews. They also have an average rating of 4.1 out of 5 with the Better Business Bureau, where they have been rated by more than 2,000 customers.
The majority of reviewers report that their expectations were met and that they were satisfied with how easy LegalZoom made the entire formation process. Many customers also praised the professionalism and helpfulness of LegalZoom’s customer service.
It is worth noting that even though most of the customers were satisfied with LegalZoom’s service, there were also some who didn’t share this sentiment. 27% of customers gave the service a one-star rating, with many complaining about delayed filings or longer-than-expected wait times.
Customer satisfaction winner: LegalZoom
LegalZoom is the clear winner of this category. While LegalZoom’s track record with customers isn’t without blemish, they still perform much better than Incfile, with numerous reviews praising the simplicity of the service.
Incfile, on the other hand, has amassed far too many negative reviews. Many previous customers explicitly warn entrepreneurs against using the service.
Incfile vs LegalZoom: Ease of Use
One of the main reasons why entrepreneurs use business formation services is to avoid the hassle of preparing legal paperwork and the possibility of making a filing mistake. And, online formation services (usually) don’t charge the hefty fees that law firms do to perform the same service.
Another good reason to use an online formation service is that you can form your LLC online in just a few minutes.
We like to see formation services provide simple and easy-to-use websites and do everything in their power to ensure a smooth customer experience.
When reviewing ease of use, we look at both the formation ordering process itself as well as the quality of the supplemental information that the service provides.
Services should clearly and honestly describe the contents of their services, provide accurate and visible pricing information on their website, and ensure that their terms and conditions are easy to understand.
|Clarity of instructions and prices||Great||Great|
Incfile is a specialized business formation service, and their website caters exclusively to those looking to start their own business. Their learning center provides a variety of resources aimed at entrepreneurs, including downloadable PDF business guides, industry-specific articles, and more general information about forming a business in the US.
Their website also includes some helpful tools, such as a sales tax calculator and a calendar of deadlines for annual reports.
The formation process itself is easy and straightforward with Incfile. Incfile’s order tool will guide you step-by-step while you provide them with all the necessary information to form your LLC or corporation. There are some upsells along the way, such as a virtual business address service (priced at $29 per month) or the option to add expedited filing. You will have the option to choose if you would like to use Incfile’s registered agent service or appoint your own.
Non-US citizens should note that it might take longer (three months or more) to obtain an EIN (if they don’t already have a tax number, such as an SSN or ITIN, with the IRS). In that case, Incfile will prepare the necessary form and require your digital signature before proceeding.
LegalZoom’s website is modern and easy to use, although the company doesn’t specialize exclusively in business formations and not all of its content is relevant to entrepreneurs. All of LegalZoom’s services have their own pages and they do a good job of explaining what each service entails and how much it costs.
Forming an LLC or corporation is straightforward and can be done in just a few minutes. As with Incfile, LegalZoom breezily guides entrepreneurs through all the questions they need to answer.
LegalZoom also has a well-developed library of educational articles aimed at entrepreneurs and all those looking to start their own businesses. Their resources amount to several hundred articles and provide both general and state-specific information about the legalities involved with forming and running a business entity. All of their articles are easy to understand, and many are written by legal professionals.
Ease of use winner: Tie
Both Incfile and LegalZoom do a great job of providing their customers with modern and easy-to-use websites. Ordering a formation or incorporation can be done in just a few minutes without needing to talk to anyone.
Both companies also provide ample resources to help educate customers about what it takes to form a business and what key decisions entrepreneurs will have to make at the beginning of their journey.
Incfile vs LegalZoom: Help & Support
Ideally, you should be able to order the formation of an LLC or corporation without ever having to talk to anyone. But, if you have questions that aren’t answered by the resources on a formation company’s websites, or if you experience any unexpected delays or issues after ordering, then having access to a helpful and responsive customer service staff is vital.
That’s why we look at the quality and availability of each competitor’s customer service staff and their support sections. In the best-case scenario, services will have staff available to help seven days a week, with multiple easily accessible contact methods and quick response times. We also look at what prior customers have to say about customer service.
|Live Chat Support||No||No|
|Extended business hours||No||Yes|
|Website help section||Yes||Yes|
Incfile provides only two contact methods on their website – you can either give them a call or leave a message through their website. They don’t appear to offer live chat support, nor do they list a support email address on their website.
They also don’t offer any extended business hours or weekend service for their customer support. You can call them during standard business hours only – between 9 am and 6 pm CST, Monday through Friday.
Incfile’s customer reviews are very negative on the topic of their customer service. Many reviewers mention that Incfile’s support was unhelpful or provided ambiguous or misleading information.
LegalZoom performs well in the help and support category. They are one of the few companies that have customer service available outside normal business hours. Indeed, their staff is available seven days a week and can be contacted between 5 am and 7 pm PT on weekdays, or 7 am and 4 pm PT on weekends.
LegalZoom does not have live chat support. Instead, you can call their sales or support teams, leave them a message through their website, or send them an email at [email protected]. Most customer reviews are positive about LegalZoom’s customer service representatives and the overall helpfulness of their service.
LegalZoom’s dashboard makes it easy to track the progress of your order. They also have a help section with frequently asked questions and answers to common issues.
Help and support winner: LegalZoom
LegalZoom scores much better than Incfile when it comes to their help and support offerings. LegalZoom is one of the few companies with staff available seven days a week, while Incfile offers support during weekdays only. Reviews for LegalZoom’s customer service are far more positive than those Incfile has received.
Do we recommend Incfile or LegalZoom?
No, we do not.
Incfile offers a basic entity formation service at an unbeatable price point of $0. Unfortunately, a very large number of former customers were faced with significant filing issues and delays after using the service. Many recommended against using this service.
LegalZoom scored better with customers, however, we cannot recommend their formation service on account of their very high prices, especially if you also need essential services like an Operating Agreement or a registered agent service. There are other competitors who can match or exceed what LegalZoom offers, while only charging a fraction of the cost.
To find out more about some of the services that we do recommend, check out our Best LLC Services or Best Incorporation Services articles, as well as our individual reviews of some of our top choices, such as our ZenBusiness review.