Is Legalzoom worth it to start your LLC?
Starting your own business can be confusing and the legal aspects can have significant implications on your business. Many fledgling businesses have to make the choice of going with a small business attorney and doing things yourself. Early stage businesses are often short on capital and time. So the question emerges “How do I protect my company, optimize my tax liability and not break the bank. Wikipedia defines Legalzoom as:
“LegalZoom.com, Inc. is an American online legal technology company that helps its customers create legal documents without necessarily having to hire a lawyer. Available documents include wills and living trusts, business formation documents, copyright registrations, and trademark applications. The company also offers attorney referrals and registered agent services. Cited as a disruption to traditional consumer legal services,the company asserts that this disruption benefits people who otherwise could not hire a lawyer by expanding their access to legal services.”source: wikipedia
So what do they offer? Legalzoom’s LLC offering provides the following services according to their website for all price levels.:
Comprehensive name search and business entity filing
Legalzoom searches the state directory to confirm that your business name is available, completes your LLC paperwork, and submits it with your state.
Peace of Mind Review
Legalzoom dots the i’s and crosses the t’s before your paperwork is filed to ensure consistency and completeness.
Complete digital LLC welcome packet
Legalzoom includes your California articles of organization, a financial account authorization letter specifying who can open your business bank account, and a step-by-step checklist for after your LLC is formed.
Legalzoom tracks your order progress in your account.
7 days a week, lifetime customer support
Legalzoom allows you to get help when you need it with agents who can answer questions about the business formation process.
Entrepreneurs’ business newsletter
Legalzoom sends you helpful tips and info from their newsletter.
There are a number of “premium” options available ranging from faster service and products to help entrepreneurs.
So is it worth it? Turns out that for most entrepreneurs, it can be. Simple businesses that are straightforward can benefit from a start with Legalzoom. Businesses evolve over time and corporate strategy, tax strategy and legal protection evolve as well. What Legalzoom can do is make sure an entrepreneur doesn’t make predictable mistakes of consequence before they have a chance to evolve as entrepreneurs. Businesses succeed because the people running them get better each day. As businesses succeed, they may outgrow the original business model and require different corporate structures like moving from an LLC to an S-Corp or a C-Corp. Legalzoom can help many entrepreneurs take the first steps to something bigger.
Who shouldn’t use Legalzoom? Businesses that are complicated (from a tax perspective) and/or have industry specific regulations are not great candidates for a service like Legazoom. Why? These “edge” cases require special consultation on things like compliance, tax treatment and legal liability. It is highly recommended that corporate entity structure, accounting and operations are guided by a comprehensive and “custom fit” entity formation which can only be provided by specific professionals working in unison.
Written by Tom Galido
Tom Galido is a cofounder of Upright Data. His goal is to make sure that our customers are armed with the best insights to get the most out of their shopping experience. Tom holds a BA from Loyola Marymount University and an MBA from Georgetown’s McDonough School of Business. In his free time he is a science fiction / fantasy author.