ZenBusiness vs LegalZoom 2022: A Head-to-Head Comparison

Do you want to start your Limited Liability Company (LLC) but can’t figure out whether to do it yourself or use an online formation service? Numerous online companies specialize in helping business owners file their paperwork. ZenBusiness and LegalZoom are two of the top companies in the industry, and each has its benefits and disadvantages.

This ZenBusiness vs LegalZoom comparison guide looks at five key factors you should consider when deciding which service is best for your business. Here’s everything you need to know about pricing, features, customer service, and more.

ZenBusiness vs LegalZoom: Quick Background

ZenBusiness was founded in 2015 in Glendale California to simplify the process of starting, running, and growing a business.

Since its formation, ZenBusiness has helped over 200k new entrepreneurs form their businesses. They’ve also made it easy for businesses to scale by providing continuous guidance, support, and service even post formation.

LegalZoom, on the other hand, has been in operation for way longer. It was founded in 2001 as a tech company offering legal services.

Now, they offer a wide range of services, including easy business formation. They’ve since helped over 2 million entrepreneurs start their businesses.

ZenBusiness vs. LegalZoom: Major Highlights

The comparison between the two businesses is broad but a few distinct features stand out for each. Here’s a quick look.

ZenBusiness

Their competitive pricing plans stand out. If you’re looking for an affordable option, they have more convenient packages. Their customer support is also excellent as evidenced by their numerous positive customer reviews. These are the main features that set ZenBusiness apart from LegalZoom.

LegalZoom

LegalZoom is a more established business compared to ZenBusiness,  and thus offers more stability and has a wider customer base. So, if you consider this before making a business formation application, it would be your best choice. They also have a 60-day money-back guarantee and offer a larger variety of legal services on an ongoing basis, so you can have access to an attorney consistently.

ZenBusiness and LegalZoom Features

Both ZenBusiness and LegalZoom offer business formation services along with other related services. Here’s a quick head-to-head comparison view of what these companies provide.

Formation Services

Both companies offer a business formation service for LLCs, Corporations and Sole Proprietorships. With LegalZoom, you can form all the above services plus non-profit organizations.

LegalZoom has helped over 10,000 non-profit businesses get started and has a 4.3-star rating for the same.

Formation Services
Website Set-up

Website Set-up

ZenBusiness provides a website set-up service for new businesses. Therefore, if your new business needs an online presence, ZenBusiness will help you secure a business domain name and business address. This feature is available in their Premium package but can be added to any other package at an added fee.

Start your website with Zen Business

Name Checking Services

Both companies offer name-checking services during formation to make sure your business name is available. They run a check through your county’s database and if the name is available, they alert you to find an alternative one.

Name Checking Services
Access to Legal Documents

Access to Legal Documents

Besides offering business formation services, ZenBusiness offers legal document templates too. Such documents include Operating Agreements that businesses may need to start their LLCs.

Business Guides

After formation, LegalZoom also provides you with guides who help you understand your business’s operations moving forward.

ZenBusiness also provides extensive guides for new entrepreneurs on how they can run their businesses. They also provide tools for business best practices, as well as marketing guides for growth.

Business Guides
Registered Agent

Registered Agent

Since every business needs to have a Registered Agent, both companies make this easier for you. They provide this service by acting as your Registered Agent.

However, with ZenBusiness, the price is more affordable compared to LegalZoom. ZenBusiness offers their service for an extra $199 while LegalZoom offers the same for $249.

Bank Account Opening

ZenBusiness offers you banking forms to complete to open an account for your business. They provide banking resolution templates that make it easy to authorize a bank account opening.

With LegalZoom, you’ll also get a financial authorization letter, which indicates which LLC member is allowed to open a bank account for the business.

Bank Account Opening
Customer Support

Customer Support

LegalZoom offers customer support to clients every weekday from 5.00 am to 7.00 pm and on weekends from 7.00 am to 4.00 pm Pacific Time.

They have a chat feature that you can use to reach their customer support desk as well. They also provide submission forms for queries on their website which you can use to reach their team. For this, you’ll receive a response by email as soon as possible.

ZenBusiness, on the other hand, has an effective chat feature where sales representatives offer quicker responses. They also respond to your emails within one business day. As for their availability on the phone, you can reach their customer service or sales team from 8.00 am to 8.00 pm on weekdays and 10.00 am to 7.00 pm on the weekends.

Employer Identification Number

ZenBusiness offers an EIN application service in both their Pro and Premium packages and charges an extra $70 to add it to their Starter package.

Every business needs an EIN, which is a 9-digit tax ID Number, for their business identification, to hire employees, and for bank account openings.

With LegalZoom, you’ll be charged $79 for the same. The application process is simple and involves completing a quick online questionnaire. The company then sends your details to the IRS, and once approved, they send your final paperwork back.

Employer Identification Number
Worry-Free Compliance Service

Worry-Free Compliance Service

This is an extra service ZenBusiness provides to their customers at $199 per year. Here, they notify you of important compliance events and monitor your status with your state.

States have filing deadlines for annual reports and failure to meet these deadlines can put you in bad standing with the state.

But with the Worry-Free Compliance service, you’ll be able to keep track of your compliance requirements with ease. You’ll also get support in case you miss any deadline and have to regain your good standing.

You’ll be able to easily amend details of your business such as business and owner name. Worry-Free Compliance service allows two amendments per year as long as you cover the state fees.

With these, you can have peace of mind knowing you don’t have to keep track of documents or miss any deadlines.

Legal Advice

LegalZoom offers additional legal advice at a fee to help you with the legal requirements of starting a business. They have available attorneys you can regularly consult at $259 for six months or $469 for 12 months. With this, you get your legal documents reviewed by lawyers and you can consult them for unlimited half-hour consultations.

This makes it suitable for people who need more legal services beyond business formation. ZenBusiness does not have this feature.

Legal Advice

ZenBusiness vs LegalZoom Comparison Guide

Pricing

Pricing

The plans provided by ZenBusiness start at $49 plus your state’s filing fees. Not only is this price lower than many other formation services, but it also comes with many free features, including accounting services, affordable registered agent services, and a customized operating agreement.

The $149 package is also a good value and has additional features for those who want a more tailored experience. This package includes compliance monitoring, a federal tax ID number, a banking resolution template, and an annual report service.

LegalZoom is one of the most used services in the business and has served millions of customers. LegalZoom is so popular because of several factors, including its large advertising budget and one-stop-shop status.

However, LegalZoom is more expensive than some of its competitors. Its cheapest package is $79 plus your state’s filing fees.

Also, it does not offer free registered agent services with any packages. Customers must pay a sizable fee to take advantage of this bonus.

Start your formation with Zen Business

Based on prices alone, ZenBusiness is the best choice. It offers a cheaper starting package and more free features than LegalZoom. ZenBusiness charges $99 for a year of registered agent service while LegalZoom charges upward of $300 for the same.

File with LegalZoom

Company Experience

Founded in 2015, ZenBusiness is one of the newest LLC formation services. However, it has established an impressive customer base in a few years and does not show any signs of slowing down.

ZenBusiness has served thousands of customers and receives mostly positive feedback, as shown in its many 4- and 5-star reviews online. For instance, they have a 4.7-star rating out of over 10,000 reviews on Trustpilot.

While ZenBusiness does not have the decades-long experience of other companies, it has established a positive track record in the industry.

LegalZoom is one of the most recognizable internet companies. Formed in 2001, it has helped millions of customers file business formation documents.

LegalZoom has served more customers than many other companies combined. However, it does not have as many positive customer reviews as ZenBusiness.

Its overall reviews on Trustpilot, for instance, are slightly lower and fewer in number than ZenBusiness. Despite having been in the market longer, it has a 4.5-star rating from over 1,600 reviews.

While LegalZoom certainly has some satisfied customers, reviews are more of a mixed bag.

LegalZoom is the clear choice if you are looking for a company with industry experience. However, ZenBusiness has more satisfied customers and has established a solid reputation within a few years.

Company Experience
Customer Service

Customer Service

ZenBusiness offers customer service through various modalities, including phone, chat, and email. Most of its agents are helpful and friendly, with minimal wait times.

ZenBusiness is also one of the few companies that offer chat customer support, which benefits many customers who have a question but cannot place a phone call.

LegalZoom also provides live customer support via phone, chat, and email. LegalZoom has a more extensive customer base than ZenBusiness, and this difference is apparent in the long response times.

Its email support is notorious for taking days to resolve questions, with some customers waiting up to a week before getting a reply.

Once they do hear back, people find that most answers are general and do not address specifics. However, LegalZoom’s phone support is much better. The response times are short, and most agents are helpful and friendly.

While you will likely receive a quicker response from ZenBusiness during business hours, LegalZoom agents are available for more hours. LegalZoom is likely the best option if you often wait until the weekend or evening to call customer support.

Get Started with LegalZoom

Convenience

The ZenBusiness website is simple, and you can fill out the order form quickly. You first need to select the package you’d like to purchase and provide some basic information on your LLC.

ZenBusiness attempts to upsell you during the registration process, which can be distracting, making the order process a bit more cumbersome.

LegalZoom’s registration process is different from most other LLC formation companies. You start by entering your personal information instead of selecting a package. You add basic information about your company and the LLC’s owners.

LegalZoom then guides you through several upsell attempts — some exceeding $1,000 — before it allows you to select your package. These upsells make the registration process long and difficult to navigate.

Despite both companies having upsells to deal with during registration, ZenBusiness has a more simple, straightforward process.

Getting started with LegalZoom is complex and often results in customers adding hundreds of dollars of unnecessary products to their bills. Dismissing most of LegalZoom’s upsells is important if you decide to use its service.

Convenience
Document Turnaround Times

Document Turnaround Times

Receiving your finalized LLC documents can take a few days to a few weeks — it all depends on how long it takes your state to approve applications. ZenBusiness’s document turnaround times correspond with your state’s processing speeds.

You can find a list of average wait lengths per package on the ZenBusiness website. The Starter package takes four weeks, the Pro package takes two weeks and the Premium package takes an average of five days.

LegalZoom processes business formation documents in the same way as ZenBusiness. Processing times depend on your state and not the level of package you choose. However, it seems that the cheaper packages do have longer turnaround times.

For example, its most affordable package processes documents in 30 days, while its most expensive package processes in an average of seven days.

Either service is a solid choice when comparing ZenBusiness vs LegalZoom. Your document turnaround times correspond with your state’s requirements, not the money you spend.

File now with Zen Business

Customer Reviews

Both ZenBusiness and LegalZoom have both positive and negative reviews. Here are some of the items customers like or dislike about each of these businesses.

ZenBusiness: Positive Reviews

  • “I used ZenBusiness to set up an LLC and it was a great experience! The process was well explained and worked great. Even got it all set up quicker than I expected. I was very pleased with the customer service!”
  • “Did what they said they would in a much shorter time than was estimated. Thank you!”


ZenBusiness: Negative Reviews

  • “I canceled my subscription with ZenBusiness prior to auto renewal for the year, and was still charged for the fee. I was told that it would be taken care of, and still got charged. I disputed it with my bank, and was refunded for the charge. One month later, I was charged again for the same amount even though I no longer have an account with them. I am still trying to fix this issue with Zenbusiness and my bank.”

LegalZoom: Positive Reviews

  • “The agent was polite and helped me with all my questions. She was friendly and kind. When struggling through a legal problem it is nice to have someone here to speak to.”
  • “I’ve gone through the incorporating process in the past without LegalZoom and it was cumbersome at best. Wanting to try an easier route I went with LegalZoom and so far found their product much easier which allows me to be more productive with issues I’m familiar with.”


LegalZoom: Negative Reviews

  • “Very sneaky about their pricing. Will not charge all the fees at checkout but will write in small letters at the button that they will charge you later. Not a company I would trust to work with.”

LegalZoom vs ZenBusiness
Frequently Asked Questions

If you are comparing ZenBusiness and LegalZoom, you likely want to know more about the best packages and refund policies. Here are some answers to the most frequently asked questions.

The biggest advantage of using ZenBusiness is its pricing. It offers a basic LLC formation process for $39 plus your state’s filing fees. On the other hand, LegalZoom requires users to pay at least $79 for the same services.

However, there are many advantages of choosing LegalZoom if you are willing to pay a higher price. LegalZoom is the most popular LLC formation business in the industry and has served far more customers than ZenBusiness.

While the best package depends on your budget, choosing the basic plan is a good start. ZenBusiness’s most affordable offering at $49 comes with a year of free registered agent service and other helpful features you need to succeed in your first year of business. After the first 12 months, the most basic plan renews for $119 annually, which is a great deal for ongoing business compliance.

Owners concerned about finances should also choose LegalZoom’s most affordable package. At $79, it is adequate for most new LLCs. However, owners wanting a more personalized experience should select one of the more Premium packages.

Either service is a solid choice when comparing ZenBusiness vs LegalZoom’s available packages. While LegalZoom is more expensive, it still offers excellent features.

One of the major advantages of choosing LegalZoom is its generous refund policy. If you are not happy with the service, it will refund your money within 60 days of your initial purchase. There are no questions asked, and your refund comes promptly.

ZenBusiness’ refund policy is more complex. You can get a refund if your paperwork has not yet been delivered to your state for processing. However, there is a $50 cancellation fee even if you are within the refund window. Thus, you will end up losing money if you choose the starter package. You cannot get a refund if ZenBusiness has already submitted your documents for processing.

Most people form their LLC in the state where their business is located. You can also register your LLC with multiple states if you have numerous locations. However, some people choose to form their LLCs in another state — like Delaware or Nevada — because of tax laws. In this case, you must qualify your business in your home state first to conduct business legally.

Most people choose to form LLCs for pass-through taxation reasons. LLC owners can report company profits and taxes on their individual tax returns instead of filing a business tax return. The United States government does not tax your LLC separately, and business owners are not personally responsible for company debts. A tax lawyer or accountant can provide more information.

You are not required to use an LLC formation service to file your documents. You can file the documents yourself or hire a lawyer to file them on your behalf. However, lawyers often charge a lot more than formation services. An online service can streamline the process and ensure you fill out the documentation appropriately. You should consider using professional assistance if you are unfamiliar with the LLC formation process.

When choosing ZenBusiness vs LegalZoom, consider features including price, customer service and industry experience. Check your state’s filing requirements to learn more about forming an LLC. Hiring a formation service is a great way to make sure your company complies with the law.