When it comes to choosing from all the online LLC formation and incorporation services available, you need to cut through the clutter. You want to know that you’re getting the best deal and that it will be done right. Personally, I always file with IncFile*. My second choice would be ZenBusiness. In my opinion, you don’t need to waste your time looking into any other companies. But, for the sake of comparison, I will include LegalZoom and BizFilings in my top 4, because they are reputable and have been popular choices for many businesses. Let’s take a look at why IncFile stands out among the 4 best LLC and incorporation services of 2020.
Why Should You Use IncFile?
I have filed over a dozen businesses with IncFile*, and the process has been smooth, the fees transparent, and customer service is (pretty) reliable. The most convincing reason to use IncFile over any other incorporation services is their price. For their most basic package, the service is FREE (plus the cost of the state fee). ZenBusiness, on the other hand, charges $49 per year for the most basic package, and the other services charge even more.
NOTE: To be fair, there are some features that the other companies include in their basic packages that IncFile does not, but I’ll explain how this factors in and why IncFile still comes out on top.
IncFile also includes a FREE registered agent for one year. After that they charge $119 per year, but it’s well worth the fee. ZenBusiness, my #2 reco, has the same deal.
Why Do You Need a Registered Agent?
It’s illegal NOT to have a registered agent. Yes, you CAN serve as your own registered agent, but it’s really not worth the hassle. Please don’t bother. This is a service well worth paying for, as it will take a lot of anxiety off your plate to have someone do this for you.
The first requirement of a registered agent it that they must have a physical location and be in the same state where the business was formed. Furthermore, if a legal entity operates in multiple states, it must appoint a registered agent with an address in each state to maintain compliance.
Another requirement of a registered agent is that the agent must be available during all normal business hours to receive Secretary of State or other official government office mail and legal notices.
When you hire a registered agent from one of these online incorporation services, the agent fulfill all these requirements and will also upload all your important documents to your online account for you to easily view. Nice!
What is a State Fee?
This is the fee charged by each state to file your LLC or articles of incorporation. Each state fee is different, and they charge different fees based on whether you are filing an LLC, S-Corp or C-Corp. California, for instance, is currently charging $75 for an LLC, while New York charges $205. What’s up with that, NY?
What are the Cost Comparisons Between the 4 Incorporation Services?
Each company offers different packages that are basic, mid level, and pro. When I file with IncFile, I always choose the “Silver” package. This is their most basic and it is free. It does not include an Employer Identification Number (EIN), though, which you must have for the purposes of opening a bank account and filing your taxes. You can add on the EIN to the Silver package for $70, OR you can do what I do. Go to the IRS website and register your own EIN for FREE! ZenBusiness also lets you add on the EIN for $70.
NOTE: When you choose the “Silver” package with IncFile, you will most likely need to add-on a purchase of the Operating Agreement (or Corporate Bylaws for an S-Corp) for $40. With ZenBusiness, the Operating Agreement is included, so you are really only saving $9 by going with IncFile over ZenBusiness. LegalZoom and BizFilings include the Operating Agreement as well, but charge a lot more for their basic package.
I actually prefer to be able to add-on the Operating Agreement when I need it, because sometimes I don’t want it. In those cases, I have my attorney draw up the operating agreements because I want a more customized version.
Now, on to the comparisons!
Cost Comparison of the Basic (Starter) Level Incorporation Services Packages:
IncFile: $0 (Operating Agreement not included. $40 to purchase)
ZenBusiness: $49 (Operating Agreement included)
LegalZoom: $79 (Operating Agreement included)
BizFilings: $99 (Operating Agreement included)
WINNER: IncFile! Even if you purchase that operating agreement for $40, you still save $9 over ZenBusiness.
What are the Registered Agent Fees for Each Company?
IncFile: FREE for the first year, then $119 per year after that
ZenBusiness: FREE for the first year, then $119 per year after that
LegalZoom: $299 per year
BizFilings: FREE for the first 6 months, then $164 per year after that
WINNER: Tie between IncFile and ZenBusiness
What are the Better Business Bureau Ratings & Reviews for Each Company?
IncFile: A+ / 5 star customer rating
ZenBusiness: A / 4 star review (only 4 customers reviewed them though)
LegalZoom: A+ / 1.5 star customer rating
BizFilings: A+ / 5 star rating (only 1 customer left review)
WINNER: Tie between IncFile and BizFilings, but IncFile has 125 more reviews to rely on.
How Long Will it Take to File with Each Company?
This is a bit trickier to compare, because some filing times are different in each state. So we will compare using California as an example. BizFilings does not take into account each state, and offers times based solely on the packages you purchase (and the more money you spend). Here we’ll compare the slowest and fastest options for each company.
Incorporation Services Filing Speed Comparison for Slowest and Fastest Options (Using California as Example)
Standard Speed ($0 included with Silver package): 30 business days
Expedited Speed ($50 or $299 included with Platinum package): 11 business days
Standard Speed ($49 included with starter package): 3-4 weeks
Expedited Speed ($299 included with Premium package) : 7-9 business days
Standard Speed ($149 included with Standard package): 30 business days
Expedited Speed ($349 included with Express Gold package)): 7-10 business days
Standard Speed ($99 included with Basic package): 4-6 weeks
Expedited Speed ($60 or $434 included with Complete package): 7-10 business days
WINNER: IncFile and ZenBusiness offer the cheapest options for Standard Speed filings, while IncFile offers the cheapest Expedited Speed at just $50.
Which of the Incorporation Services is the Overall Winner?
The winner is IncFile*! Their “Silver” package is arguably one of the best value packages in the industry. They also top almost all of our comparison categories. ZenBusiness is a close second though, and with their inclusion of the Operating Agreement in their basic package, they are nipping at IncFile’s heels!
OVERALL WINNER: IncFile
Is There Any Reason to Choose ZenBusiness over IncFile for their LLC and Incorporation Services?
Yes, if you like what they stand for. ZenBusiness is a Public Benefits Corporation. They have a cool “pay it forward” mission, and they select women-owned and minority-owned businesses in the US to loan money to every year. They also increase the lending amount on a yearly basis! So if you’d like to spend a little more money in order to participate, choose ZenBusiness!
Is There Any Reason to Choose Legal Zoom Over IncFile?
No, not for LLC or incorporation services. LegalZoom has a great track record but the cost outweighs the benefits. BUT, the reason you may want to look into Legal Zoom is if you have additional legal needs related to intellectual property filings (copyright, patent, etc.), custom legal forms, or you want to speak with an actual attorney. IncFile doesn’t offer those services.
As a word of caution, there are quite a few negative customer reviews out there for Legal Zoom regarding people being overcharged. Just be aware and pay attention to billing if you hire them.
Is There Any Reason to Choose BizFilings Over IncFile?
If I Go with the IncFile “Silver” Package, as You Recommend, are there any Add-Ons I Should Purchase?
Yes, buy the Operating Agreement (or Corporate Bylaws for an S-Corp) for $40. (You are still saving $109 by purchasing this add-on with the “Silver” package, instead of buying the “Gold” package which includes the Operating Agreement.) You absolutely need this document and it is required by law. This is probably your most important document for your business, where you lay out the rules and structure which forms the framework for your business.
You might want a lawyer to draw this up for you instead of purchasing online, if you have an attorney at your disposal. But generally speaking, the basic “boilerplate” Operating Agreement that the incorporation services provide will suffice.
TIP: You do NOT need to buy IncFile’s Business Formation Kit for $99. This is a big ol’ dinosaur of a binder with printed minutes, bylaws, and the operating agreement.
If you want to form an S-Corp, you will also have to add-on Preparation and Filing of IRS Form 2553 for $50. This is included in the Gold package, but adding it on with the Silver package still saves you $50.
IncFile vs ZenBusiness vs LegalZoom vs BizFilings: Any Way You Choose, You’ll Get the Job Done!
These 4 companies are all great and popular choices for LLC formation and incorporation services. You really can’t go wrong, and the price differences, especially between IncFile* and ZenBusiness, are relatively minimal.
If you are considering incorporating yourself, and you’re not sure of all the necessary steps, you should take a look at my comprehensive guide to the process: Independent Contractor Taxes & How to Incorporate (To Save Money).