January 24, 2020
Starting An LLC: LegalZoom Or The Do-It-Yourself Method?
An LLC (limited liability company) provides separation of the business from its owners. Therefore, the owners aren't personally liable for business debts that accrue. Typically, LLCs are more flexible than standard corporations and far simpler to set up. Plus, they tend to have lower reporting requirements.
The Steps To Starting An LLC
When starting an LLC via LegalZoom or other means, you'll need to file documentation in the state that your business will be operated in. All states have their own sets of procedures and rules. However, there are a few necessary steps that need to be followed to set up your LLC properly. These steps are present regardless of the state of incorporation.- Choose a name:
- If possible, reserve an LLC name:
- Select a registered agent:
- Develop your operating agreement:
- Filing articles of organization: Articles of organization are required for all states to formally start an LLC. These articles explain the power, rights, liabilities, duties, and obligations of each LLC member.
- Obtaining your Certificate of LLC: Once the paperwork is filed through your state’s system, you'll receive your official LLC certificate. From here, you can obtain tax ID numbers, business bank accounts, and more.
Considering LegalZoom
One of the simplest and most effective options for those looking to start an LLC is LegalZoom. They are an online legal service offering, built as a one-stop-shop for the legal needs of small businesses. These businesses can pay low fixed rates for all sorts of legal work. In addition to LegalZoom LLC formation, this includes options such as:- Developing customized legal documentation with e-signature technology
- Registration of trademarks, copyrights, and patents
- Consultations with lawyers, legal document review, and accountant analyses
- Creation of living wills, trusts, and estate planning
The Pros of LegalZoom
There are many advantages to starting an LLC through LegalZoom. Some of those advantages include:- LegalZoom has a long track record of success:
- They offer a sixty-day money-back guarantee:
- LegalZoom offers a Business Advisory Plan:
- Easy Process:
The Cons of LegalZoom
Regardless of the advantages included above, there are also some distinct downsides to consider. These pros and cons should be weighed before deciding to utilize LegalZoom to start your LLC. Some of these potential cons include:- Customer Service Issues:
- It Can Be Costly:
- Not All Services Included in The Basic Plans:
Considering The DIY Route
Those who decide to utilize LegalZoom are looking for the least expensive and lowest stress option for filing legal documents. What's being misunderstood is LegalZoom is stellar at marketing, but not so much service personalization. LegalZoom has built a large, hugely successful enterprise with a straightforward premise: affordable, efficient legal services. However, they aren’t a law firm. In fact, LegalZoom is prohibited from providing real legal advice. They've had issues with this in the past. Instead, their services are more of a shotgun blast approach. They aren’t tailored to the legal needs of the individual. For this structure, the do it yourself methodology of LLC formation is surprisingly effective, shockingly easier, and cheaper.The Pros of DIY
There are some benefits to the do-it-yourself route for starting an LLC compared to an all-in-one package. Some of these advantages include:- Choose Third Parties to Assist At Will:
- It Can Be Affordable (If You Know What You're Doing):
- Control Over The Process:
The Cons of DIY
Despite the numerous advantages above, there are some potential disadvantages to starting an LLC independently. A few of these disadvantages include:- Difficult to Write an Operating Agreement Without Legal Help:
- Potential Complications Involved in the LLC Creation Process:
- Reporting Challenges:
- You'll Likely Need Legal Counsel Eventually: