LegalZoom vs ZenBusiness

Features, pricing, and contract terms compared

Patrick Ward Patrick Ward Follow Published: Sep 27, 2022

LegalZoom and ZenBusiness both target the SMB segment, but drift in different directions based on their scope. LegalZoom prefers to serve as a legal one-stop-shop for business owners, providing both services for their professional lives such as business formation, along with their personal lives. In this way, LegalZoom drifts towards serving solopreneurs as a secondary customer segment. ZenBusiness focuses exclusively on the business owner's professional considerations, both for business formation and ongoing business growth - leading to a secondary customer target of Bootstrapped Startups.

Content on this page does not constitute financial advice. It is intended for general information purposes only.

LegalZoom

3.4/5 stars

LegalZoom, as the name implies, is anchored in the LegalTech space, offering both professional and personal legal products to business owners. They act as a surrogate attorney for those small business owners that require extensive legal services but don't want to incur the cost of a full-fledged attorney.

ZenBusiness

4.2/5 stars

ZenBusiness is targeted at the business owner who is looking for the tools to run their business. Unlike LegalZoom which is solely offering legal services, ZenBusiness offers a handful of products across legal, growth, and administrative areas of a small business to assist business owners in starting, growing, and maintaining their business.

Summary of key differences

FeatureLegalZoomZenBusiness
Entry price$79 + state fees$49 + state fees
Standard processing time20 business days3 business days
Foreign qualification fee $229 $49

Pricing Analysis: LegalZoom vs ZenBusiness

LegalZoom, while more affordable than attorneys, is more costly with a base level package price of $79 + state fees compared to ZenBusiness' starter price of $49 + state fees. These costs considerably ramp up when you look to renewals with LegalZoom costing $299 for an annual registered agent fee, significantly more than ZenBusiness' $199 fee for the same service. Equally, LegalZoom gets pricey when you start looking to do business in multiple states with a foreign qualification fee of $229 compared to ZenBusiness' much more favorable $49.

LegalZoom pricing

The base pricing from LegalZoom is more expensive than ZenBusiness. However, note that pricing is impacted by state fees. For example, LegalZoom customers setting up an LLC in Delaware will see an initial cost of $169 (package cost plus the state LLC fee). In Wyoming, the same package would cost $279 because of the higher state fee.

ZenBusiness pricing

ZenBusiness is the less expensive formation service offering compared with LegalZoom. However, note that pricing is impacted by state fees. For example, ZenBusiness customers setting up an LLC in Delaware will see an initial cost of $139 (package cost plus the state LLC fee). In Wyoming, the same package would cost $249 because of the higher state fee.

LegalZoom vs ZenBusiness market value analysis

Market average based on analysis of 9 formation services providers.
MetricMarket AverageLegalZoomZenBusiness
Lowest package price$156 before state fees$79 + state fees$49 + state fees
Formation processing time9 business days20 business days3 business days
Registered agent annual cost$152 $229 $49

User experience & onboarding

Onboarding for LegalZoom aims to demystify legal services with respect to business formation. Optionality is built-in to the flow with micro-chat questionnaire to help business owners determine the right type of business formation along with options to pick from a set menu with transparent pricing. Add-ons populate throughout the onboarding, but given the transparent pricing up front, it isn't a surprise to any prospective business owner.

Onboarding for ZenBusiness is more complex than average, and they require new customers to complete a chat interview before showing their pricing. This is good for non-standard LLC and C-Corp setups, since it better accounts for additional fees. The price shown has fewer hidden fees than the industry norm.

LegalZoom's onboarding is seemless through a interview chat flow style, similar to the questionnaire chat of ZenBusiness. Both LegalZoom and ZenBusiness aim to provide customized add-ons, dependent on the specific needs of the business owner. The big difference is while LegalZoom integrates transparent pricing for each of its add-ons throughout onboarding, ZenBusiness waits until the questionnaire is complete to display pricing.

Formation speed

ZenBusiness' solid 3 business day processing time for the starter package is very swift by industry standards, although not reaching the fastest times of same day or next day processing. LegalZoom, on the other hand, is substantially slower, with twenty day processing times. These speeds may put LegalZoom faster than an attorney but don't stack up compared to the competition within the business formation space.

LegalZoom's twenty business day processing time is in the highest range for formation services. When compared to lawyers in general, this speed might seem swift, and indeed their services are indicative of the 'legaltech' market that reduces the cost of traditionally expensive legal advice. However, their formation speed is not up to scratch when compared to Business Formation-specific services that promise processing in a handful of days.

ZenBusiness promises a maximum of three days for most standard formations, placing it in the low-mid range for processing times among formation services. ZenBusiness commonly matches one-day services, but doesn't advertise it heavily because state processing systems can delay some formation types.

Are they worth the cost?

LegalZoom is geared towards both the SMB and Solopreneur markets, with a strong emphasis on the individual business owner themselves. Their positioning is indicative of trying to be a one-stop-shop for businesses that have legal needs but are fearful of the costly retainers incurred by an in-house counsel or legal contractor. LegalZoom's products look to cover the breadth of what an SMB or Solopreneur business owner would need - not only professionally such as formation, trademarks, and ongoing contracts, but also personal with products for estate planning, family law, and real estate.

ZenBusiness is targeted at traditional SMB and Bootstrapped Startups. Their messaging is focused on business owners who have standard SMB businesses that can be started with family and friends funding or personal savings rather than requiring investment from outside sources such as VCs, Private Equity or Wall Street. If your business concept falls into a quintessential SMB that will require a handful of employees but isn't likely to scale, ZenBusiness is targeted at you.

NanoGlobals editor's rating for LegalZoom reflects its comprehensive nature of legal services for an aspiring business owner. LegalZoom earns points for being more cost-efficient than regular attorney services along with ease of onboarding via chat and helpful introductory flows to their products. Unfortunately, they miss the mark on pricing and processing times when compared to the industry average, outweighing any perceived advantage of being legal experts since, like with all services in this formation niche, their recommendations don't constitute legal advice.

The NanoGlobals editor's rating for ZenBusiness is based on a mix of their strong marks for smooth onboarding and package flexibility. Although pricing trends high compared with similar services, part of this is because they are transparent about add-on costs. They feature fewer hidden fees than the industry norm, and we like that they don't vary the recurring fees.

Author Credentials

Patrick Ward is an expert on working with startups and new businesses. He has 8 years experience serving tech-enabled companies with staffing and growth.

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