Direct Incorporation vs LegalZoom

Quick Summary

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. They both have their own advantages as well.

First off, LegalZoom has more experience than basically any other company offering LLC service, as they’ve served more than 2 million business customers. Furthermore, their $0 baseline price point for LLC formation service is considerably lower than Direct Incorporation’s $174 price tag. However, Direct Incorporation offers some advanced features in its premium packages that you won’t find with LegalZoom.

If you would like some more information before making your choice, read on to discover all the details of these two respected service providers, or check out our list of the top LegalZoom LLC alternatives.

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) Efficiency: Are you in a hurry to get your LLC formed? That’s no problem for Direct Incorporation and LegalZoom, as they both have ways to speed up your formation. There’s an extra cost associated with expediting your order, of course, but it can be worth it if you’re short on time.

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

Pricing

LegalZoom: Their price point for entry-level LLC formation service is $0 ― and those rates do not include state fees. They also don’t include registered agent service with any of their formation packages, and it costs $249-299 per year to add it to your order.

Direct Incorporation: With Direct Incorporation, formation service is available starting at $174 (plus state fee). While this is not the most inviting price tag in the world, they do include an EIN and six months of registered agent service with this package, so it’s a decent value. Their upper-tier formation packages include some intriguing features, and not many of their competitors offer them. So, if you’re interested in things like trademark protection, full-service comprehensive web design, custom logos, and more, you might want to give Direct Incorporation a long look.

Experience

LegalZoom: LegalZoom is one of the industry giants, with more than 2 million business clients, and they’ve been providing online business services since 2001.

Direct Incorporation: Direct Incorporation opened in 2003, and as a mid-sized company, they’ve served more than 80,000 customers since then.

Customer Support

LegalZoom: With LegalZoom, you can access their customer support team via phone or email. We have quite a bit of experience with both of these options, and we prefer their phone support. When we contact them by phone, we’ve received high-quality support from friendly representatives, but their email support has lengthy response times, and they usually just send a form response that doesn’t actually address our concerns. Their extended availability hours are a welcome feature ― you can contact them from 8 am to 10 pm ET on weekdays, and they’re even available on Saturdays from 10 am to 7 pm ET.

Direct Incorporation: They’re one of the few companies in this industry that lists the direct extensions of every employee on their website, so you can always access the person who is best suited to answer your questions. You can also call their general support line or send them an email. Their support team is always responsive in our experience, and they seem to know their stuff as well. You can reach them from 9 am until 6 pm ET on weekdays.

Turnaround Times

LegalZoom: While nearly all of their competitors have turnaround times based on how quickly each individual state can process formations, LegalZoom instead structures their formation speeds on which package you buy from them. With their most expensive package, they can form your business entity in about 7-10 business days, but their most affordable formation plan takes 30 business days, which comes out to around six weeks.

Direct Incorporation: Direct Incorporation has a page on its website that lists its estimated turnaround time for each state, including both standard processing speeds and expedited orders. They also pledge to prepare most formation documents and file them with the state within one business day of you placing your initial order.

Customer Reviews

LegalZoom: LegalZoom has a large volume of customer feedback, as you might expect, considering the fact that they’re a major operation. We found 6,000+ reviews for LegalZoom, and while they do have some negative reviews mixed in, a majority of this feedback is positive. Plenty of their customers are quite satisfied with the efficiency and effectiveness of their services.

Direct Incorporation: Direct Incorporation only has 30 reviews available online, split roughly equally between positive and negative feedback. Overall, it seems like some of their customers are quite pleased with their solid customer support, as well as their efficiency.

Ease of Use

LegalZoom: Their ordering process is quite unusual and actually feels like it operates backward. Whereas most competitors have you start by selecting your formation package, and then fill in your personal info and choose add-on features, LegalZoom starts by collecting your information and then has you select your additional services before you ever even look at their packages. How do you know what to add on when you don’t yet know what you’re adding onto? This is a confusing way to structure things, and it can also lead to some sticker shock when you get to the end of their order form and see how expensive it will be.

Direct Incorporation: Their entire order form takes less than 15 minutes to complete, and it’s a straightforward process that never gets confusing or misleading. They also recently redesigned their package select screen to make it more user-friendly, which we appreciate. Finally, Direct Incorporation has some helpful FAQ sections that can help you decide which package to purchase.

Additional Services

With either LegalZoom or Direct Incorporation, you’ll have access to a wide variety of additional services to help you start, maintain, and grow your new LLC. They offer many of the same services as well, including registered agent service, annual reports, doing business as (DBA) names, foreign qualification, amendments, dissolutions, attorney consultations, and more.

However, there are also some services that you can only purchase from one or the other. For instance, only Direct Incorporation offers logo design and web design features, while only LegalZoom offers personal services like last will and testament, living trusts, and divorce papers.

Which Is the Best LLC Company for You?

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:

While Direct Incorporation’s prices are higher than LegalZoom’s, they include more features, and they also offer more advanced branding services. If these items appeal to you, 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, their baseline price point for LLC formation is considerably lower than Direct Incorporation’s, so if you’re looking to save money, LegalZoom is a good choice as well.

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