How to Set up an LLC with LegalZoom - A Step-by-Step Guide

Are you looking to register your limited liability company (LLC) and considering using LegalZoom for assistance? In this article, we'll walk you through the process, provide insights into the services LegalZoom offers, and help you...

Are you looking to register your limited liability company (LLC) and considering using LegalZoom for assistance? In this article, we'll walk you through the process, provide insights into the services LegalZoom offers, and help you decide whether it's the right option for you.

The Convenience of LegalZoom

LegalZoom is an online legal service that simplifies the LLC registration process. While you can register your LLC independently through your state's designated website, many business owners prefer to have an expert, such as LegalZoom, guide them through the process.

Throughout the LLC registration with LegalZoom, you may come across questions and additional products for your business. We'll break down what LegalZoom provides and have an honest discussion about the process, helping you make informed decisions.

Step 1: Choose an LLC Name & Confirm Its Availability

The first step in setting up your LLC with LegalZoom is to enter your desired business name. LegalZoom will check if the name is available, allowing you to proceed with your registration. Make sure the name adheres to your state's requirements, including uniqueness and avoiding restricted terminology.

Step 2: Define the Purpose of Your LLC

Once LegalZoom confirms the name availability, you'll be prompted to answer a few questions about your expected business launch date and the industry you operate in. This information helps LegalZoom provide tailored advice and services specific to your business.

Step 3: Indicate Whether You'll Hire Employees

LegalZoom may ask if you plan to hire employees. This question helps them understand your business and provide additional services that could benefit you. Your response does not affect the LLC registration process.

Step 4: Identify a Registered Agent

LegalZoom will inquire about your preference for a Registered Agent (RA), who serves as your business's official contact for legal and state documents. You can either choose yourself or opt for LegalZoom's RA services. Choosing LegalZoom as your RA ensures that you won't miss any important business documents, giving you peace of mind. However, it comes at a cost of $249 per year.

Step 5: Choose Recommended LLC Documents

LegalZoom offers "Essential Documents" for your LLC, including an Operating Agreement, Employer Identification Number (EIN), and assistance with business license requirements. An operating agreement helps formalize your management structure, an EIN is necessary for tax filing, and LegalZoom can research the licenses your business may need.

Step 6: Choose Additional Business Services

Before selecting your LLC pricing package, LegalZoom presents additional services, such as Smart Employer and Total Compliance. The Smart Employer package provides legal advice, consultations with tax professionals, and unlimited legal forms at $39.99 per month. Total Compliance helps ensure timely filing and prevents penalties. Carefully consider these services based on the needs of your business.

Step 7: Select an LLC Package and Pay

The cost of setting up your LLC with LegalZoom depends on the processing time and state filing fee. Choose the package that suits your requirements, whether you need expedited service or can afford to wait. LegalZoom offers different pricing options to accommodate various business situations.

Step 8: Provide Final Details About Your Business

After selecting your package, you'll need to provide essential details about your business. LegalZoom will request information such as your business address, licensing requirements, fiscal year-end date, owner names and ownership interests, and management structure. Additionally, you'll need to provide a payment method to complete the process.

Once you submit your information, LegalZoom will start preparing your documentation and submit it to your Secretary of State's office. You'll receive an email notification when your LLC is approved and ready to begin operations.

Pros & Cons of Using LegalZoom to Form an LLC

While LegalZoom offers convenience and cost savings, it may not be the perfect fit for every small business. Consider the following pros and cons before making a decision:

Pros of Using LegalZoom

  • Full-service assistance for your LLC formation and ongoing legal matters
  • Time-saving, allowing you to focus on growing your business
  • Cost-effective compared to hiring an attorney
  • Additional support and reminders for important filing dates

Cons of Using LegalZoom

  • Limited expertise compared to a qualified business attorney
  • Potentially higher costs than other similar services
  • Possible longer processing times and slower service
  • Potential confusion regarding add-on services and pricing structure
  • Limited customer support according to some reviews

Bottom Line

Setting up an LLC involves understanding state-specific requirements, tax obligations, and other complex matters. While you can register your LLC independently, using LegalZoom streamlines the process, saving you time and money on potential legal fees. With prices starting at $79 plus filing fees, LegalZoom provides a convenient option for forming your LLC in about 15 minutes.

Remember, while LegalZoom offers valuable services, it's important to assess your specific business needs and consider consulting with a qualified attorney if necessary. By making an informed decision, you can set up your LLC with confidence and focus on building a successful business.