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As an entrepreneur, one of the first financial hurdles you hit is the cost of hiring a lawyer to set up your legal entity. But this shouldn’t prevent you from being an entrepreneur! Especially when you consider that paying hundreds of dollars per hour and dealing with lawyers’ busy schedules can be avoided by simply using an online legal service. Find the best online legal providers for starting a company and completing your federal and state filings.
What Can I Expect From An Online Legal Service?
Most online legal services take you step by step through the process of your legal matters. For example, let’s say you’re forming a Limited Liability Company (LLC). The online legal advice you choose will ask you to provide the necessary information to complete the proper documents and then you will pay their fee. This fee may be a flat rate for having the documents filed or a monthly fee for their service in addition to any state filing fees. With some online legal services you may have direct access to an attorney if you’re doing something more complicated. This is where your wallet may be very thankful you chose to use an online legal service instead of going directly through a lawyer, because lawyers fees can get expensive.
Legal Entities for Small businesses
You’ll want to know about six of the most common types of legal entities for businesses before diving into this article. It’s important to know which one will best fit your needs, so you can choose the best online legal service.
C Corporation (C Corp)
This is a standard corporation and has limited liability protection, which means owners are not personally liable for the debts or liabilities of the C Corp (in most circumstances). C Corps pay taxes at the corporate level. Note: double taxation is a possibility if corporate income is distributed to business owners as dividends (considered personal income). Tax on corporate income is first computed at the corporate level, then again at the individual level.
LP Vs LLP
Both an LP (Limited Partnership) and LLP (Limited Liability Partnership) have two types of partners: general and limited. A general partner manages the daily operations of the limited partnership and is personally responsible for the liabilities of the LP. General partners can be individuals or legal entities. A limited partner contributes to the business by providing investment capital. Limited partners have no say in the operation of the LP and have no voting power. They also have no personal liability aside from their financial investments. However, limited partners can be held personally liable for a liability of the business if they are found to be involved in the management of the business. Limited partners receive dividends and general partners have to pay self-employment tax.
The key difference between an LP and an LLP is that LLPs have limited liability for all partners whereas in an LP general partners are the only partners with personal liability. LLPs are best for businesses with investors who wish to take part in the daily operations of the business.
A Non-Profit, or 501(c)(3), is designed to meet certain specific tax-exempt purposes.
A Nonprofit must be designed to benefit one of three things: the public, a specific group of individuals or the membership of the nonprofit. Examples includes: charities, churches, political organizations and credit unions.
LLC Vs S Corp
An LLC (Limited Liability Company) and an S Corp (S Corporation) are very similar. Both have limited liability protection and are typically pass-through tax entities. Pass-through taxation is where no income taxes are paid at the business level. Any profit or loss the business has is passed through to the owners’ personal tax return. S Corps must file a business tax return while only LLCs that have more than one owner file business tax returns.
What Are The Differences Between an S Corp and LLC?
- LLCs can have an unlimited number of members while S Corps are limited to 100 shareholders.
- S Corp owners must be U.S. citizens/residents while LLC members don’t have to be.
- LLCs can be owned by C Corps, other S Corps, LLCs, partnerships or multiple trusts; this is not the same for S Corps.
- LLCs can have subsidiaries without restriction. S Corps have more formalities. These formalities are also recommended for LLCs, but are not required.
LegalZoom offers help with personal and business legal documents online. They will help you with as much as you need, which is why this service is great for those of you who are largely unfamiliar with the legal process. LegalZoom’s interface is simple and easy to follow, which makes finding the information you need effortless. A tool that stands out for LegalZoom is the “How did most people answer this question?” button. This button allows you to see the most popular answers, to give you an idea of how you’d like to answer the question.
Below is the pricing information for LegalZoom. The prices in the table may vary depending on your state.
Business Legal Plan
- $26.99/month for 6 months
- $23.99/month for 12 months
Personal Legal Plan
- $11.99/month for 6 months
- $9.99/month for 12 months
|Incorporation||LLC||Trademark||Will and Testament|
|Basic||$199 + filing fee||$69|
|Complete Coverage||$219 + filing fee|
|Estate Plan Bundle||$149|
|Economy||$149 + state fees||$149 + state fees|
|Standard||$239 + state fees||$289 + state fees|
|Express Gold||$369 + state fees||$359 + state fees|
Check out what Legal Zoom has to offer in this video.
Rocket Lawyer helps you create legal documents, connect with a lawyer to answer your questions and incorporate your business. Rocket Lawyer’s interface lets you print off state-specific legal forms for your business or personal life. You receive step-by-step instructions from RocketLawyer so that you can make sure all your paperwork is complete. You can also create personal documents like an online will and divorce papers in addition to business services.
- 1 week free trial
- $39.95/month for Premium Plan
- $49.95/month for Accelerate Plan (includes free registered agent service for first year in business & reduced rates for your incorporation)
LegalShield is great for people or small businesses who need to physically speak to a lawyer or may need ongoing representation. LegalShield has a network of “Provider Law Firms” around the country for your legal needs. They offer personal legal plans, family plans, identity theft protection tools and small business plans.
Below are the prices for LegalShield’s services on average; however, they may vary by state.
- Individual: $17.95/month
- Family: $19.95/month
- Small Biz 10: $39.00/month
- Small Biz 50: $89.00/month
- Small Biz 100: $149.00/month
More of the Best Online Legal Services Reviews
Some of the services below are difficult to find information on and are not as clear on what services they offer. If you have experience with any of these services, please share your story with us so we can update this article and help future consumers make more educated decisions.
To learn more about a service, click one of the links below or simply scroll down the page to learn about them all.
BizFilings focuses on helping businesses find the right legal structure for them. They’ll help entrepreneurs choose the legal entity and keep the business running, from a legal perspective. While filling out forms, a box is displayed on the side of the page that tallies up your cost total as you add-on legal documents so you know exactly how much you’ll be spending. You also offer a few payment options including PayPal in addition to credit card. On the down side, as their name suggests, they focus only on serving businesses so there are no personal documents and they don’t even offer trademark filings for companies.
Pricing can vary by state but here are the average prices that we found for Biz Filings.
|C Corp||LLC||LLP||LP||Nonprofit Corp||S Corp|
|Basic||$99 + state fees||$99 + state fees||$99 + state fees||$99 + state fees||$99 + state fees||$99 + state fees|
|Standard||$239 + state fees||$239 + state fees||$239 + state fees||$239 + state fees||$239 + state fees||$239 + state fees|
|Complete||$349 + state fees||$349 + state fees||$349 + state fees||$349 + state fees||$349 + state fees||$379 + state fees|
Like BizFilings, CorpNet focuses on businesses so you won’t find any personal legal services offered here. But, documents take very little time to fill out since you complete a “form fill” page first that then fills in the necessary details on the documents you choose. They also include an updated summary of pricing as you add-on various features so you know exactly the total cost expected to pay.
Pricing can vary by state but we found the following average prices for Corp Net.
|C Corp||LLC||Nonprofit Corp||Professional Corp||S Corp||Doing Business As (DBA)||Partnership||Sole Proprietorship|
|Basic||$79 + state fees + $29 shipping||$79 + state fees + $29 shipping||$99 + state fees + $29 shipping||$99 + state fees + $29 shipping||$79 + state fees + $29 shipping||$79 + state fees + $29 shipping||$79 + state fees + $29 shipping||$79 + state fees + $29 shipping|
|Deluxe||$199 + state fees + $29 shipping||$199 + state fees + $29 shipping||$199 + state fees + $29 shipping||$199 + state fees + $29 shipping||$199 + state fees + $29 shipping|
|Complete||$249 + state fees + $29 shipping||$249 + state fees + $29 shipping||$299 + state fees + $29 shipping||$299 + state fees + $29 shipping||$249 + state fees + $29 shipping|
|Success||$249 + state fees + $29 shipping||$249 + state fees + $29 shipping||$249 + state fees + $29 shipping|
FindLegalForms is probably best for someone who knows a little bit about legal speak. It’s cheaper than some of the others, but buyer beware! If you’re a novice, you may become overwhelmed with the complex terms and the do-it-yourself nature of the legal forms on this website. The documents are state-specific and you are in charge of downloading and filing them yourself. The customer service reputation is where Find Legal Forms seems to fall down the most.
- Pricing starts at $4.99 per form
MyCorporation focuses on businesses, whether you’re starting out, need help with day-to-day operations or if you want to trademark or copyright a company asset. The company’s Learning Center is full of articles to help get your business where you want it to be. My Corporation offers live chat and phone support to help with your business needs.
Below are the starting prices for MyCorporation. Depending on what documents you need to file and what certificates you need, the price may increase. The company offers the option to rush file for an additional $100.
|Benefit Corporation||General For Profit Corporation||LLC||Non Profit Corporation||Professional Corporation|
|Basic||$69 + state and publication fees||$69 + state and publication fees||$69 + state and publication fees||$69 + state and publication fees||$69 + state and publication fees|
|Standard||$99 + state and publication fees||$99 + state and publication fees||$99 + state and publication fees||$99 + state and publication fees||$99 + state and publication fees|
|Deluxe||$199 + state and publication fees||$199 + state and publication fees||$199 + state and publication fees||$199 + state and publication fees||$199 + state and publication fees|
|Premium||$299 + state and publication fees||$299 + state and publication fees||$299 + state and publication fees||$299 + state and publication fees||$299 + state and publication fees|
US Legal Forms offers legal help for both personal and business matters. If you know exactly what you are doing, this is a good solution for you since you can go directly to the forms and get started. USLegal.com also includes many obscure legal documents, like a formal letter to remove someone from your church, which could be very useful to some people.
|LLC Formation||$199 + filing fee||$244 + filing fee||$324 + filing fee|
|Inc. Formation||$199 + filing fee||$244 + filing fee||$324 + filing fee||$369 + filing fee|
|PLLC Formation||$199 + filing fee||$244 + filing fee||$324 + filing fee|
|DBA||$139 + filing fee|
A Better Option Than Seeing a Local Attorney?
Legal advice online can save you a lot of time and money if your legal needs are basic and pretty straightforward. Obviously, if you’re wary of having someone you’ve never met handle your legal needs, it’s not the thing for you. But keep in mind that you typically only meet with a local lawyer once and handle everything else by phone and online. We hope we’ve given you the information you need to make the best choice for your situation.
If you’ve used online legal services, what went well and what went wrong?
*All prices as of 5/31/2016 – current price may vary.
Disclaimer: Information published in this article is intended for reference use only. This article is not intended to offer any legal opinion or advice, or apply any legal principle of any kind. Please consult a licensed in attorney in your state of residence for any opinion or advice on any legal matter or issue.