Direct Incorporation Vs LegalZoom Comparison Review 2024
Reviewed by Jazmin Castello - MBA
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$$147 + State Fees
($79 + State Fees)
About Direct Incorporation
According to INC Magazine, direct incorporation has been one of the fastest-growing industries since it was founded in 2003. It started as a father-son business with an aim of offering a more economical way for Michiganders to start a business without the hassle of paying a law firm. So, they hired a team of former lawyers and dedicated themselves to processing legal documents.
However, they have now extended their services to offer certain features that their competitors overlook as you will discover in this comparison.
About LegalZoom
LegalZoom is beyond no doubt one of the most popular companies in the business formation industry. The company was founded with an aim of taking legal services online. Two years after its establishment, the company launched ten web products that focused on business incorporation, estate planning, and intellectual property protection.
Later, they took a different approach in providing their services by creating an independent attorney network to help users get personalized legal advice to address their needs.
On our review of direct incorporation vs LegalZoom, our key comparison points focus on:
- Direct LegalZoom vs Direct Incorporation Pros & cons
- LegalZoom vs Direct Incorporation differences
- Best Pricing & Value
- Best Track record & experience
- Good Common features
- Great Customer support
- Best Ease of use
- Best LLC formation service
- Greatst registered agent service
- Best speed of formation
Northwest Registered Agent
Founded in 1998 out of Spokane, Washington, Northwest’s main goal was to make business formation and registered agent services affordable. Since opening their doors, they’ve established a name for themselves as one of the industry’s best. In addition to a registered agent service and company formation, Northwest provides additional benefits to their customers. Our ZenBusiness and Northwest comparison guide has been crafted to help you decide between these two industry giants.
Direct Incorporation vs LegalZoom
| Direct Incorporation | LegalZoom | |
| Pros | Includes 6 months of free registered agent service in all the packages Has to streamline formation process | Has one of the best experiences in the industry Offer an array of additional features |
| Cons | The packages are overpriced Their refund policy isn’t quite appealing | Doesn’t include the register agent service in any of their packages The website is full of upsells. |
| Detail | Read Review | Read Review |
| Link |
Direct Incorporation vs LegalZoom – Brand comparison details
Best Overall Pricing and Value: A tie
Direct Incorporation
Direct Incorporation isn’t budget-friendly and it is one of the most expensive among the industry’s top players. However, the fact that they bundle vital features such as EIN and the registered agent services in all of their packages justifies their pricing.
Besides, Direct Incorporation does offer other lucrative features that some of the top companies ignore. Services like trademark protection, comprehensive web design are not easy to come by in other service providers.
LegalZoom
Legalzoom isn’t a budget-friendly service either. However, their Economy package is relatively cheaper and includes some vital features for business formation. LegalZoom offers an array of features that provide both personal and business services.
Their key advantage over most formation companies is their personal services such as divorce papers, statements, living trust, last will, and more.
Though LegalZoom will offer you an array of features than most of the services in the industry, most of these features have to be purchased separately.
That said, these two services are not impressive when it comes to overall pricing. LegalZoom may have a cheaper lower package but given that you will purchase some vital features like registered agent service as add ons, it ends up being equally expensive.
Best Track Record & Experience: LegalZoom
Direct Incorporation
Direct Incorporation has been in the industry since 2003 and has served more than 80, 000 clients in various ways. They also host several websites and have been one of the fastest-growing companies.
Even though the company doesn’t receive a lot of feedback, the ones we could come across online are mostly positive.
LegalZoom
LegalZoom was established in 1999 and since then, they have served not less than 4 million clients in various ways, including business services.
However, their customer feedback is a mixed bag. You are likely to find as much positive feedback as negative feedback which is understandable for a large company like LegalZoom.
That said, when it comes to tracking records, it is hard to beat Legalzoom due to its vast experience.
Best Common Features: Direct Incorporation
Direct Incorporation
Direct Incorporation includes Federal Tax ID Number (EIN) to help you pay business tax and hire employees as well as the registered agent among other common services in all of their LLC formation packages. That is to say, once you purchase any of their packages, you are set to form an LLC.
LegalZoom
LegalZoom doesn’t include some common features such as registered agent service and EIN in any of their LLC formation packages. Meaning, you will have to purchase these as add ons. Worse still, their charges for these services are high.
Best Customer Support: A tie
Direct Incorporation
Direct Incorporation lists all their points of contact so that you can contact the person best suited to answer your queries. Nevertheless, they also offer a general email and phone contact that you can use if you are not sure who to contact.
The best part, their customer service team tends to be friendly, responsive, and knowledgeable about their services. You can reach out to the customer support team during weekdays from 9 AM to 6 PM ET.
LegalZoom
Just like Direct Incorporation, LegalZoom also offers two methods through which you can contact them – email and phone contact. However, being a larger company, their email contact may delay. If you are in a hurry to get feedback, you better reach out to the customer support team via phone call.
The best part, they extend their availability to the weekend. Meaning, you don’t have to wait till weekdays if you have an agent concerned over the weekend. That said, you can reach out to them any time from 5 AM to 7 PM during the weekday or 7 AM to 4 PM ET on weekends.
Direct Incorporation’s customer support service via email is more impressive than that of LegalZoom. However, we love the LegalZoom extended availability.
Best Ease of Use: Direct Incorporation
Direct Incorporation
The direct Incorporation website is very straightforward. Everything is in the open allowing you to decide more quickly. The interface is also modern and well arranged to make it more user-friendly.
LegalZoom
LegalZoom’s website is modern and well-arranged as well. However, the ordering process isn’t that straightforward. Their website is marred by upsells that may consume your time and make you spend more than you expected.
In terms of ease of use, Direct Incorporation has the upper hand since they have fewer upsells. LegalZoom upsells may end up costing you more than you planned.
Best LLC Formation: Direct Incorporation.
Direct Incorporation
Even though Direct Incorporation LLC’s formation packages are generally overpriced, they include all the features necessary for business formation in their packages. Most of the features necessary for business formation such as operating agreement, registered agent service, and EIN are all included in their packages.
LegalZoom
LegalZoom will also offer you all the features you will require to set up an LLC. However, some of these features have to be purchased separately as add ons.
That said, LegalZoom and Direct Incorporation are not the best in the market when it comes to LLC formation. But comparing the two, Direct Incorporation is a better deal in this sector.
Best Registered Agent Services: Direct Incorporation
Direct Incorporation
Direct Incorporation’s biggest advantage over LegalZoom is its registered agent service. They include the service for 6 months in any of their packages. Meaning, once you purchase any of their packages, you will enjoy the service for 6 months free. Besides, their annual rate after the 6 months elapses is also very reasonable.
LegalZoom
LegalZoom, on the other hand, doesn’t include the registered agent service in any of their packages. You will have to purchase it as an add-on. Even worse, their annual charges for this service are one of the most expensive in the industry. Meaning, it will be expensive for ongoing compliance as well.
Best Speed of Formation: A tie
Direct Incorporation
Direct Incorporation’s turnaround time is based on the state of formation processing speed. However, the company promises that your document will be ready and filed within a business day after ordering.
LegalZoom
LegalZoom, on the other hand, bases its turnaround time on the formation package you choose. The basic plan (the economy package) guarantees 30 business days of processing speed. The middle package will reduce this timeline by half. Top tire offers expedited filing and will only take around 7 to 10 business days to fill your order.
Which Should You Choose?
These two companies are closely matched and you still find it hard to make your pick even after going through our comparison. To make things straight,
Choose Direct Incorporation if:
You want a service with more LLC formation features included in their packages. It can also be a great deal if you want more advanced branding services.
Choose LegalZoom if:
You are looking for a trustworthy business formation service. LegalZoom has served millions of entrepreneurs in various ways and this is enough assurance that they do a great job. Besides, it can also be a great choice for an entrepreneur whose business will handle legal issues along the way.
Final thought
These are two closely matched top services and what you will choose will depend on your business needs. Each one of them has its unique strength and weakness but both of them have what it takes to fulfill the need of your business.
For instance, LegalZoom has a custom operating agreement in all packages, Direct Incorporation doesn’t. Direct Incorporation bundles EIN and registered agent service with all levels of services, LegalZoom doesn’t.
However, generally speaking, LegalZoom and Direct Incorporation are not the best LLC formation service in the market. Feel free to check out our list of the best LLC formation services 2022.
Frequently Asked Questions (FAQs)
I would recommend the economy package. This package includes the necessary features you would require to form an LLC plus.
LegalZoom has basically more upsell than any other service in the industry. The upsell will not only consume your time when picking your orders but you will be shocked with the total amount if you decide to pick some of the upsells. Therefore, Direct Incorporation has fewer upsells.
Direct Incorporation filing speed depends on the processing speed of the state of formation. This will vary from a few days to some weeks. On the other hand, LegalZoom’s processing speed depends on the package you choose. Their basic package may take 30 days while the middle package will reduce it by half. The fastest is the top package that will only take 7-10 business days to process your orders.
LegalZoom doesn’t have any third-party partnership offer at the time of this writing and would always avoid sharing your info at all costs. On the other hand, we noticed Direct Incorporation has a third-party offer which we found in their privacy policy and therefore, are likely to share your info.
LegalZoom has one of the best satisfactory policies in the industry. You can request a refund within 60 days of your subscription and get your money back without questions. On the other hand, Direct Incorporation will only provide less than a $40 processing fee only if you request it immediately before an order is processed.
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- Sarah and Saad, M.F. (2019). Non-competency of registered estate agent / Siti Sarah Rossainul Fahmy and Mohd Farid Saad – UiTM Institutional Repository. Uitm.edu.my. [online] Available at: https://ir.uitm.edu.my/id/eprint/51958/ [Accessed 22 Feb. 2022].