[Jonel]

Advantages of using Legal Zoom to start LLC for free vs my attorney who charges about $350?

I’m considering forming an LLC and looking at two options: using LegalZoom’s free LLC formation service or hiring my attorney, who charges around $350. What are the key advantages and disadvantages of each approach?

Is the attorney’s fee worth it for personalized service, or does LegalZoom provide enough value for a simple LLC setup?

I’d love to hear from those who have experience with either option!

[Lisa]

For me, I have no employees. I didn’t use anything. In Florida you just apply online. Super easy.

I have to file an annual report every year is all. I would check your states website as you may not need to hire anyone to set it up.

[Dan]

I’ve paid up to $950 for an LLC. The only purpose of an LLC is to protect you from personal liability for business ventures.

If you use an online LLC formation company then you’re getting the same generic operating agreement as a restaurant, a real estate business, a clinic of some kind, or a lawn care company, etc.

So basically, whatever business venture you’re doing, the operating agreement will never be customized to your risks and operations.

And if you fail to follow the operating agreement then that’s when a judge could pierce the veil on your LLC and hold you personally liable.

So, in my humble opinion it’s well worth it to pay up for a specific operating agreement formed by an attorney who knows what business you’re in and can protect you.

The worst thing would be to think you’re protected and then get sued and find out you’re not because you tried to save a few hundred bucks.

To me this crosses the line between being cheap vs frugal.
Read these books to help you operate your LLC properly:

Start your own corporation by Garrett Sutton and
The Tax and legal playbook by Mark Kohler

Good luck to you and may you be profitable and protected!

[Bobby]

You can do it yourself, however there are so many ways to make a mistake that has long term consequences.

For example, if you DIY you are going to be your own registered agent.

This is a terrible idea because you expose your name and home/office address in permanent public record making it easy for anyone to find you.

This seems like no big deal, until it is.
I had a client last year who took the DIY route (I’m an international tax and asset protection lawyer) in Florida.

His business got sued after a few years and the claimant’s lawyer for his name and home address on Sun biz.

So, they added him personally to the lawsuit and process servers were constantly harassing him at home.

Because he was added personally, they came after personal assets. He settled for just under $1mm.

This could have been easily avoided by using a commercial registered agent costing $100-200 per year.

This is just one of many mistakes I’ve personally seen with people who chose to go the DIY route.

FYI, Legal Zoom will include your personal details in your LLC filing so for privacy, they aren’t a good option.

[Andrew]

Legal Zoom won’t be free in the end. They will continually market you to make all types of business document purchases, even if you don’t need them.

[Matthew]

You don’t need legal zoom or an attorney. Go directly to the website provided by the governing agency

[Kristin]

Setting up an llc is easy. You can do it without any assistance from legal zoom or a lawyer.

May be different from state to state, though, so definitely double check your state’s requirements.

[Ted]

If it’s a simple LLC, and you don’t plan on it having huge revenue in the first year, I think you can do it yourself.

The lawyer will help you understand how to use different formation options to reduce taxes and protect yourself and your assets.

I’m a lawyer, I’ve done several of these myself. When it came time to do bigger stuff, I paid lawyers to help.

[Bill]

In NC, it’s just a standard form. You wouldn’t need a lawyer to file.

Depending on your business though, it may well be worth paying an attorney to make sure your actual business practices are in line with how the LLC can limit your liability.

[Aaron]

In my area you can create an Llc for about 200 dollars on the state website.

Paying for an Llc to be made makes more sense to consider if your Llc needs to have special features or do something specific.

If you are just starting a basic business or something and you aren’t rich already you probably don’t need to pay for it to be done.

If you are rich or trying to create a coordinated asset protection strategy with anonymity then it will cost you more than 350 and you should talk to a lawyer anyway.

[Ashleigh]

Texas was easy to do myself on the Secretary of State’s website. One time fee of $300 that you have to pay no matter what to file with the state.

There’s really no reason to pay someone to do this.

[Katherine]

I just created one in NH, online filing is easy and can be done without help. You may want to set up an operating agreement.

Then there is an annual report that you can do online.

I did the operating agreement with a lawyer but you might be able to find a generic one.

[Kyle]

Have done a few over the years. Always easy to do myself. I have to go online to create some Articles of Formation to create banking accounts… that’s about it

[Arno]

I posted the same question and just ended up filing the paperwork myself through the state.

I didn’t have any employees or other members.

[Kyra]

Attorney client privacy. LLc protects your liability so if someone comes looking they have to go through the attorney first.

[Chris]

I was going to use Legal Zoom but it was going to cost more than my attorney.

So, I just used my attorney.

[Author]

Posts