LegalZoom vs GovDocFiling Compared

Establishing any business entity in the US can be a daunting task. There is a lot of paperwork to be filed and information to be provided to achieve compliance. The situation doesn’t get better if you have no one to help you navigate through the process. You may require the help of an attorney, but that calls for you to dig deeper into your pockets. 

To bridge that gap, many companies have come up to help you with your business formation. These companies work as online incorporating companies. That means you don’t have to visit them to have your company created physically. Unfortunately, some are not worth the salt in regards to how they provide their LLC services. As such, new business owners need to research to find the best.

Among the leading LLC formation companies are LegalNature, Inc Authority, Corpnet, IncFile, MyCorporation, and Swyft Filings. It’s imperative to highlight that they may help you establish your business entity in any of the 50 states. Some of these LLC service providers also provide legal services and hence any legal issue is sorted. Thus, if your business needs legal advice, you can get assistance from LegalNature, LegalZoom, and Swyft Filings.

However, depending on your business needs, there are variations in these LLC formation service providers’ services and products. Some are good when you’re starting up your business, and some for already established companies that require an experienced provider. 

In this LegalZoom vs. GovDocFiling review, we will compare the two firms in terms of the services they offer and the pricing of their formation packages.

Although entrepreneurship is a path with so many opportunities, a new business owner needs to decide on the best business entity to undertake. That means that they must see the value in the end. Below are some of the business entities you can consider.

Related: LegalZoom Review | GovDocFiling Review

Sole Proprietorship

In this kind of business entity, you own a business individually without being incorporated in any of the states. Due to its simplicity, its formation process is simple and hence attractive to many entrepreneurs. You have the option of having employees or work on your own.

The only disadvantage with a sole proprietorship is that you bear the burden of debts and other liabilities as an individual. In case the business assets don’t meet all the obligations, then personal assets can be sold to clear the debts.

Limited Liability Companies(LLCs)

Starting an LLC with GovDocFiling.

 

 

LLCs are popular in the US. Unlike in sole proprietorships, LLCs enjoy the benefits of incorporation, such as privacy and liability protection. In case of any legal challenges, then personal assets cannot be seized to pay company debts. 

Corporations 

A corporation is a business entity formed by individuals, stockholders, or shareholders to make profits. Corporations can own property, sue or be sued, enter into contracts and pay federal and state taxes.

There are three types of corporations:

  • C Corporation
  • S Corporation
  • Non-Profit Corporation 

Partnership

When thinking of coming up with a business, there are no limitations on the type of entity you want. A partnership is good as a business entity because you get diversified ideas for running the business, and raising the starting capital is easy.

Pass-through entity mode of payment of taxes in partnership ensures that you pay taxes as per the shares you own. Additionally, you get other benefits such as division of labor. 

The fact that there are many business entities to go for doesn’t mean they are all suitable for you. Before deciding on the entity to settle for, here is what you should know:

  • The type of business you choose dictates how the Internal Revenue Service will tax you
  • The type of business entity will dictate legal proceedings in case of a lawsuit.
  • The business entity dictates the type of bank account that you can open and operate.
  • Some entities may need additional tax forms, while some require none.

Services Offered by GovDocFiling

Choosing your business entity with GovDocFiling

Payroll Services

As a beginner, coming up with a payroll program may be a daunting task. As an LLC formation service GovDocFiling helps you with payroll services as you hire new staff and manage the existing ones.

Legal Services

For your business to operate smoothly, it must adhere to some state regulations. Law on its side may be complicated, especially if you are new in the industry. In this case, GovDocFiling offers legal services that may relate to your business.

GovDocFiling has partnered with Rocket Lawyer to ensure that all the legal help you need is available. They will help you draft legal documents and provide you with legal advice accordingly. It’s also important to mention that Rocket Lawyer is also an LLC formation company on its own, and you can consider them.

However, note that they don’t replace your lawyer. In the long run, you will need a law firm to deal with physically for any legal help. 

Bookkeeping

Record keeping is pivotal in all businesses. However, it demands a lot of authenticity and time for it to be correct. Some records are essential, especially when it comes to taxation. 

GovDocFiling will ensure that all your records are in safe custody.

Financing

As a company, you may need to implement some ideas, yet you may lack enough finances. GovDocFiling may help you implement your vision by offering financial support in the form of loans.

Doing Business As(DBA)

In the process of growing and expanding your business, you may need to operate another entity without using your legal name. In this case, you need to file for a DBA that offers anonymity and privacy. 

Creating a DBA with GovDocFiling.

GovDocFiling will help you file for DBA increasing your chances of growing.

Importance of Having a DBA

The need to file for a DBA may differ from one business to another. However, it has advantages. Here are some of them.

  • Increased Credibility

While establishing some business entities, such as partnerships, the law requires you to operate using your real names. Though it may be okay for some professions, it’s hard to develop credibility in some occupations. In this case, a DBA may come in handy.

  • Opening of Accounts (Financial)

For some financial institutions, it’s pretty hard to open some accounts as an individual or informal business entity. The only way to make sure that you qualify to open these accounts is by applying for a DBA.

  • Eases the Branding Process

In marketing, you must know your target audience. If your business intends to market two unrelated products, it would be wise to apply for a DBA to ensure that you satisfy both market shares. 

  • Working with Popular Organizations

A business is not a one-person affair, and at one point or the other, you may need to work with other organizations. Some of the more prominent organizations prefer to work with formal companies. The only way to make sure that you are formal is to ensure that you have a DBA.

  • Name Availability

Business names are pivotal. They play a massive role in the competition. As a way of keeping healthy competition, you need to come up with a strategic name. However, you can’t operate a business with the same name as your competitor. 

To avoid collision of names, you may apply for a DBA.

  • Designing Your Website

In the era we are in, websites are crucial to any serious business. They are used for marketing purposes hence increasing sales. GovDocFiling is an expert when it comes to designing a perfect website for your firm. Additionally, they help you market your products.

Services Offered By LegalZoom

  • Business formation and paperwork
  • Registered agent services
  • Drafting of legal forms and legal advice
  • Registration of trademarks
  • Copyright application
  • Patent application
How LegalZoom does it.

Comparisons

Pricing

Price is an important factor when it comes to the comparison of products. One of the significant differences between the two LLC formation companies is their packages. The formation packages are arranged depending on the business needs and probably the business owners’ financial well-being. With GovDocFiling, the prices of their services and products are dependent on the type of business entity. 

While for some this may be good, to some, it may be a disadvantage. In the beginning, you may not have access to capital; in this case, you can go for the cheapest business formation package with LegalZoom. However, GovDocFiling has only one package when it comes to each business entity.

LegalZoom has three business formation packages. The economy package costs $79 plus the state filing fees to get your business started.

LegalZoom Packages.

As a new business owner, I would go for LegalZoom since they are cheap compared to GovDocFiling. For example, establishing a limited liability company with LegalZoom will cost you $79 plus the state filing fees. However, setting up the same entity with GovDocFiling will cost you $345 without the state filing fees.

Note that the state fee is different in all the states.

Although the economy package is good on LegalZoom, it’s good to note that it doesn’t cover some services. For instance, you will not get the official seal and members certificate if you use the economy plan.

Additionally, if you need your order to be filed immediately with the state’s secretary, you need to be either on the standard or express gold packages. In this regard, your order may take around seven to ten days. Unfortunately, if you opt for an economy package, you may need to wait longer than that.

Name Availability Check with LegalZoom.

On the other hand, filing with GovDocFiling will take one to two weeks. 

GovDocFiling Pricing

As highlighted earlier, GovDocFiling depends on the business entity you are in. If you are aspiring to start an LLC, corporation, or Personal Service Corporation, you will need a $345 state filing fee excluded. On average, your order will take around one to two weeks to be processed.

GovDocFiling Pricing.

In return, you will get various services and products. You will get a Tax Filing ID or the Employer Identification Number with the IRS. Also, you will get some agreements, including employment agreements and independent contractor agreements.

If your interest is on sole proprietorship or partnership, GovDocFiling offers competitive pricing. With only $195, you are good to go. The exact price applies to the non-profit organization, estates, and trusts. 

Pricing for Non Profit Organizations, Trusts and Estates.

The only difference between the two is the services offered. The former has more services included at the same price than the latter.

Comparing these two companies in terms of price, LegalZoom would be the best pick. They are not only cheap but also offer flexible plans you can consider. However, their prices are not the lowest in the market. For instance, Swyft Filings offers LLC service with their starter pack starting at $49.

The only setback with Swyft Filings is that their pack doesn’t offer much more services than helping you establish your business entity. Also, their registered agent services are charged separately at $149 per year. This fee is way too much expensive, especially for first-time business owners.

Experience

If the saying experience is the best teacher is anything to go by, it’s paramount to consider how long a firm has been in business. Comparing the two firms based on experience, LegalZoom would score highly. It started way back in March 2001. On the other hand, GovDocFiling first opened doors for customers in the year 2016.

However, in the short span, GovDoc Filing has been in business, they have earned a lot of trust from customers. Their customer reviews are pretty evident that they deliver.

Ratings and Reviews

Due to the increase in the number of online incorporation service providers, it’s essential to do some research to avoid falling prey to inexperienced firms. The surest way is to check the customer reviews. Better Business Bureau (BBB) and TrustPilot are firms that help you review companies.

GovDocFiling Rating on TrustPilot.

In our case, GovDocFiling scored well on TrustPilot since most of the customers on the platform left positive reviews. On the other hand, on BBB, some customers aren’t satisfied with their services hence asking for refunds.

LegalZoom has a rating of 4 out of 5 on Trustpilot. This score is an indicator that the majority of their customers are satisfied. We can conclude that both firms are doing great if the reviews are anything to consider. 

Pros and Cons of Using GovDocFiling

Pros

  • They have an easy and straightforward procedure of application
  • Good ratings and positive customer reviews
  • Available customer support 24/7
  • They take PayPal as a mode of payment which many LLC formations firms don’t consider.

Cons

  • The firm is still new in business hence less experience in the field
  • They don’t offer various registration packages like other firms such as Swyft Filings, LegalZoom, and CorpNet.
  • Application of EIN with them is pretty expensive as compared to others.
  • LLC and C Corporation formation services are expensive as compared to other LLC companies.

Pros and Cons of Using LegalZoom

Pros

  • They have been in business for long hence much experience
  • With different formation packages to choose from, you are at liberty to select what suits your business entity.
  • They have a refund policy. In case you opt-out of their services. They give you two months, and in this period, you are eligible for a refund.
  • Their legal business plan is quite comprehensive as compared to others.

Cons

  • In some instances, reaching their customer service is quite hard
  • They don’t offer one-time legal help
  • Some of their services are more expensive compared to their competitors, such as IncFile.

Bottom Line

The role of this review is to make sure that you have to make the right decisions when it comes to LLC formation firms. As we have seen, LegalZoom offers competitive prices as compared to GovDocFiling. However, their services differ in some ways.

If you need a firm that will help you with paperwork, bookkeeping, financial support through loans, and web design and marketing, GovDocFiling is the right choice. On the other hand, if you need various packages to choose from, LegalZoom may suit you better.

The most crucial bit of the whole process is to understand your needs. This way, you will choose the best business entity as per your potential and requirements. While it may sound good to start a sole proprietorship instead of an LLC, it’s imperative to understand how it may affect you if things go south. 

On the same note, filing for a DBA may be advisable if you have the ambition to work with giant companies and increase your diversification chances. Choose wisely to avoid disappointments.

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