In the era we are in, registration of any business entity in the US shouldn’t be a headache to any business owner. Understanding the process involved in handling the paperwork is all you need. There are many business formation service providers all over to help you with your business registration.
The online incorporation service providers have made the process of business registration easy and straightforward. Some of the giants that are setting the pace in the LLC service industry include ZenBusiness, GovDocFiling, IncFile, LegalZoom, MyCorporation and CorpNet.
As an entrepreneur it is good to note that all these LLC formation service providers handle your process differently. Thus, you need to understand how they offer their services. However, a detailed research on all of them may consume much of your valued time that would have been used in dealing with the pressing needs of the business.
Each LLC formation company has different products and services that are priced differently. The paramount thing to do is understand what your business needs and then you choose which service provider to assist you.
In this ZenBusiness vs. GovDocFiling review, we are going to examine the services offered by both and a comparison in pricing and ease of use. At the end of this review, you should be in a position to decide whether to use ZenBusiness or GovDocFiling.
Types of Business Entities
There are various business entities that you can choose to establish. Some of them need a lot of capital, while some are cheap and easy to start. Here are some of them.
- Limited liability Company LLC
- Sole proprietorship
- Personal Service Corporation
- Church organization
While there are many entities that these LLC formation companies can help you establish, the decision on which type you want is yours. But, is there any entity better than the other? Here is what you need to know before choosing any entity
As a business, you must pay tax to the federal government. However, companies are taxed differently. For instance, as a corporation, your revenue is subject to taxation as well as the income that you earn from the corporation. On the contrary, as an S-Corporation or limited liability company, it’s only the income you get that is prone to taxation.
For S-Corporations and LLCs, pass-through taxation mode applies, while for corporations, double taxation mode applies. However, it’s imperative to note that owners of LLCs, partnerships, and S-Corporations are subject to self-employment taxes.
Raising capital may be possible in a partnership as compared to sole proprietorship or LLC. In case the starting capital is small, a partnership may be ideal for you than an LLC.
Management and Ownership
Separating ownership and management is only possible for a limited partnership, limited liability companies, and corporations. In case your business suffers from poor decisions resulting in liability, the company is held liable.
On the contrary, in sole proprietorship and general partnerships type of entities, you will be liable for any liability or debts incurred due to poor management decisions.
A sole proprietorship doesn’t offer protection of assets. The same case applies to general partnerships. Therefore, if personal assets safety matters to you, you need to incorporate your business as a corporation, S-Corporation, or limited liability company.
As ownership in C-Corporation an S-Corporation is purely based on shares, transferring from one person to another is relatively easy. In this case, one only needs to sell their shares to the new member.
On the contrary, you must terminate partnerships for the transfer to take place. The same case applies to sole proprietorship, which you must entirely sell before the transfer of ownership.
Formation of sole proprietorship and general partnership is relatively easy as compared to other business entities. However, before deciding on them, make sure that you are ready to handle the hardships that come with them, as we have seen.
ZenBusiness offers its services in the form of business formation packages. Each LLC formation package has a different price while at the same time comes with different products and services. Here are some of their offers.
This package is the lowest they offer and at the same time is the cheapest. The starter package will cost $49 annually, state fees excluded. However, the services and products you get in this package are limited.
As a company, you will enjoy the standard filing service and the services of a registered agent. Also, you will get an operating agreement template.
As a company, you need to consider this package if the starter package services aren’t sufficient. However, beware that you will dig deeper into your pockets. With $199 annually, you are good to go. You will need to cater for state filing fees separately.
As opposed to the starter package, the filing service in this package is quicker. In addition to all the starter pack services, you will get an Employer Identification Number (EIN), a banking resolution template, and a worry-free warranty.
As the name suggests, this is their premium package and the highest. As much as it may be expensive, it offers a wider range of products and services than all the other packages. It costs $299 annually and state filing fee is not included. The reason is because different states charge a different state fee.
In this package, you will get all the services included in the pro package. Additionally, your business will get a domain name, business website, and an email address. It’s imperative to highlight that this package’s filing service is quicker than in all the other offers.
This LLC formation service provider is different from other companies. GovDocfiling pricing depends on the business entity you want to form. In this case, you may have to reconsider your business entity if you can’t afford their prices for your choice of business entity.
For nonprofits, estate, and trusts, you need $195 to see your dreams come true. You will get a tax ID filing /EIN on top of expedited filing speed with the state in return. Additionally, you will benefit from customer support via phone, email, and chat.
For sole proprietorship and partnership, you will also need $195 for a start. However, you will enjoy a wide range of products and services. In addition to filing and getting an EIN, you will get lawyer-drafted legal document templates.
Some of the legal document templates include agreements, employee, mutual non-disclosure, independent non-contractor, and unilateral non-disclosure agreements. For partnerships, you will get a partnership agreement and a start-up business guide for all entities.
GovDocFiling has a different package for LLCs, corporations, s-corporation, and personal service corporations. Unlike in other entities, the starter package in these entities doesn’t include state administrative fees.
With $345, your dream of establishing an LLC or corporation is valid with GovDoc Filing. You will get a tax filing ID/EIN and all the legal documents templates like in other entities. For LLC, you will get a single and multi-member agreement. Also, for corporations, you will get Corporate Bylaws.
Registered Agent Service
Among the mandatory requirements for your company in the US is a registered agent service. While the law has allowed your company to act as its registered agent, the advantages of having a third-party registered agent are numerous. Here are some of them.
Less Legal Complications
Quite often, as a company, you may find yourself on the wrong side of the law. The suits may result from failing to adhere to some statutory regulations. Registered agent service providers will receive legal documents on behalf of your company.
Legal documents may range from statutory mails, impending lawsuits, and tax-related letters and notifications. Receiving all these documents and any other documents from various governmental bodies on your behalf may save you time and much-needed effort.
In that case, you will direct all the positive energy towards your company’s growth without worry.
Since you don’t need to receive all legal documents, you can handle all tasks outside the office. Having a registered agent service provider as a third party guarantees you freedom without fear of missing any legal document or notification.
In an office setting, people are working around you. They mean no harm to you, but in some instances, some information may be sensitive if it lands to the wrong person. Therefore, having a registered agent service away from your office is advisable.
Your Company Can Operate in the Various States
The US law requires you to have a registered agent in the state where your business is. This regulation may limit you from establishing various companies in various areas. However, with registered agent service providers like ZenBusiness, you can operate in different physical locations.
It’s imperative to note, in case you have incorporated businesses in various states, you need a registered agent service in each state.
For us to conclude which LLC formation service is the better option, let us do a comparison by considering the pricing, experience, customer service and feedback among other factors.
For many, starting capital is always an issue. All businesses go through hardships in their formational stages. That said, you will opt for an LLC formation service provider that is likely to save you a dime.
ZenBusiness is the ideal choice compared to GovDocFiling. For instance, establishing a limited liability company with ZenBusiness will cost you $ 49. Even though the state fee is not inclusive, you can’t compare it to $ 345 on GovDocFiling.
In addition to their fair pricing, they have three packages for you to consider. In this case, you will opt for the best package depending on your business needs and financial ability. On the contrary, GovDocFiling offers only one fixed package, which you have to endure with regardless of whether you’re stable financially or not.
Comparing these two firms based on how long they have been in business, we would gladly say they tie. ZenBusiness started in the year 2015, while GovDocFiling came into existence in the year 2016. There is a difference of only one year. Though a year may be a short span, we won’t underrate ZenBusiness for the extra year they had in business.
Customer Feedback and Review
The majority of the customers served by these LLC formation service providers were happy. Each one of them enjoys numerous positive reviews from satisfied customers who have received great customer service. However, since it’s impossible to satisfy each need, some customers left negative feedback, which is quite understandable.
On customer feedback, ZenBusiness and GovDocFiling would tie.
Both GovDocFiling and ZenBusiness have an active customer support system. On their websites, they have FAQs that answer the majority of questions that many may have. Additionally, they have emails that you can use to contact their customer support.
Again, on customer support, these two firms tie.
Pros of Using ZenBusiness
- They offer the most competitive prices on LLC formation services. Their starter package costs $39, which is among the lowest in the market.
- They don’t market add-on services on their website during the online incorporation process. Some LLC formation service providers may trick you with these services.
- They have numerous feedbacks which nearly all of them are positive.
- ZenBusiness offers annual report filing as a part of their Worry-Free Guarantee.
- ZenBusiness takes part in corporate social responsibility activities. For instance, their partnership with Kiva.org has seen many needy businesses benefit through loans and grants.
- Even though their services’ overall value is excellent, they face competition from other LLC formation service providers like IncFile.
- Some customers have complained about slow response from their customer support.
Pros of Using GovDocFiling
- GovDocFiling offers extra services on top of incorporation. They include payroll services, marketing, and web design for your company.
- They have included PayPal as part of their payment mode, unlike other firms.
- They have lots of positive reviews from customers.
- They don’t have packages like ZenBusiness.
- The cost of securing an EIN with them is relatively expensive.
- Comparing them with other LLC formation service providers, they are expensive.
In a nutshell, we would give an upper hand to ZenBusiness as the best LLC formation firm than GovDocFiling. Undoubtedly, they offer competitive prices in the market. Their prices don’t only beat GovDocFiling as the only competitor but also other firms like LegalZoom.
Also, having various packages has given them an upper hand. Their starter package is among the cheapest in the market. However, it’s imperative to say that the more you pay for a package, the more you’re likely to enjoy many products and services.
As a foundation is vital while starting your building, the same case is to your business. The type of business entity you choose imposes some permanent implications on your business.
Some of the harsh factors you’re likely to endure for the rest of your companies’ existence include taxation and organizational structure. Also, since the future is unknown, make it easy for you to transfer the business to someone else. Choose wisely!
Jon runs the place around here. He pontificates about launching and growing online publishing businesses, aka blogs that make a few bucks. His pride and joy is the email newsletter he publishes.
Hyperbole? Maybe, but go check it out to see what some readers say.
In all seriousness, Jon is the founder and owner of a digital media company that publishes a variety of web properties visited and beloved by millions of readers monthly. Fatstacks is where he shares a glimpse into his digital publishing business.