Business Formation What Is
In this review, we will get straight to the point and explain what you really need to be aware of about BetterLegal, including:
- The true pricing for BetterLegal’s LLC formation services
- Expected turnaround time for formation
- Customer reviews, BetterLegal’s reliability, support offerings and more
In addition, we’ll give an explanation of each of the other services related to formation that BetterLegal offers.
Below is a brief overview of our findings. Below, you’ll read our full review that outlines our findings and explains everything you need to know about BetterLegal.
Is BetterLegal the Right Choice for You?
BetterLegal is different from other establishment companies because it provides only one LLC creation and a single incorporation package. While the package includes amazing add-ons, like Operating Agreement or Bylaws drafting has some unnecessary services too.
We were generally delighted with the ease of use on BetterLegal’s website and simple electronic filing. The costs of services offered were simple to locate generally.
The prices offered by BetterLegal for recurring services, including registered agent service as well as annual compliance, were reasonable. They also offered more filing add-ons than most other smaller competitors.
You can go to BetterLegal.com yourself, or, if you want to know more about the criteria we used to assess BetterLegal’s service Read on!
BetterLegal Quick Overview
Established in 2017, and based in Austin, Texas, BetterLegal is a fairly small player within the business formation market.
Like many of its young competitors, BetterLegal tries to emphasize its efficiency. On their website you’ll see the following statement:
We’re a 21st-century company which makes the process speedy simple and affordable without the time and paper.
The company does indeed boast impressive turnaround times and an easy-to-use website.
As is the case with many other small company formations, however, BetterLegal uses third parties to provide many of its services, such as the registered agent program. Additionally, they offer a variety of services through partner companies which include banks as well as online accounting companies, as well as at least one insurance company.
Though they focus primarily on the business formation process, BetterLegal provides many other services that are related to starting and running a business. Among the additional services BetterLegal offers are:
- Operating Agreement and Bylaws drafting
- A permit or business license for a search service
- Services for compliance, which include the filing of annual reports
- Amendment filings, such as the ones needed to alter your company’s name address, state of operations, as well as member details
BetterLegal’s formation pricing structure is simple. Unlike their competitors, who tend to have several different packages of formation, BetterLegal offers its formation bundle for one flat fee.
BetterLegal’s Formation Bundle is available to both LLCs and traditional corporations (C-corps). In the following section, we’ll discuss the bundle of services offered. BetterLegal offers a range of additional services, either with monthly subscriptions, or with fixed costs, related to business formations. We discuss those further down, in the “Services” portion of this review.
BetterLegal’s Formation and Incorporation Package: $299 plus state fees
BetterLegal’s sole service for incorporations as well as forms is comparable to many of its competitors’ middle-tier offerings. It includes more than the standard bare-bones structure.
For a set $299 fee, plus relevant state fees, here’s what’s included:
Articles of Incorporation or Organization: The documents officially establishing your corporation or LLC with your state. BetterLegal guarantees same-day filing and quick delivery of the documents once the state has approved the paperwork.
EIN filing: EINs (Employer Identification Numbers) are utilized by the IRS to track businesses. Most companies require an EIN. Luckily, applying for one is quick and easy. The entire procedure can be completed online in just a few minutes via this page. IRS’s EIN file web page.
Operating Agreements or Bylaws: These documents establish the guidelines for how your LLC or corporation will be managed. While they aren’t legally required in many states, we think they are important to all business owners.
banking resolution: An official document that outlines who can establish a business bank account and conduct other banking operations on behalf of a company. This document is required when you are planning to open a bank account for your company.
Website: BetterLegal will provide you with a domain name and build a basic site and an “online store with inventory management services.” Business owners can choose that they want to purchase a premium site plan at a later time.
Tax Analysis: An analysis that is a basic understanding of your company’s tax situation , performed by a third-party partner of BetterLegal.
Assessment of Insurance: An evaluation of your business’s potential insurance needs, with service offerings then offered through a third-party partnership of BetterLegal, CHUBB Insurance.
We’ll go into greater detail about the overall value of this program in the next paragraph inside the post.
BetterLegal vs Competitors Pricing
Below is a table that compares BetterLegal’s formation prices with those of its main competitors.
Prices quoted within this table are independent of BetterLegal’s pricing for packages. They are standardized to compare against competitors.
We define Basic Formation, Full Formation, and Full Formation + Website below in the table.
To find information on the cancellation and refund policies of BetterLegal it is necessary to comb through a great deal of legalese found on their Terms of Service Page.
Here’s what BetterLegal states regarding canceling their registered agent service:
To cancel the automatic renewal of your RA Service, you must notify BetterLegal of your intent to cancel by calling our Customer Service Line at (512) 969-2339, emailing us at email@example.com, or by canceling online through your account portal.
While it’s not specifically stated however, we believe this policy also applies to other recurring-fee services like BetterLegal’s annual compliance service. Business Formation What Is
For other fixed-fee options BetterLegal’s terms are concise: “All purchases through the Website are final and will not be refunded.”
Below are some of the areas in which we thought BetterLegal was particularly effective.
Fast turnaround times
BetterLegal highlights its turnaround times on its main webpage. They claim same-day filings for all their entities which means that the Articles of Organization or Incorporation will be submitted to the authorities of the state on the same day that you file them with BetterLegal.
They also state that they’ll send you your documents within two days. It’s likely that this doesn’t account for actual states’ processes, and that can be as long as a few weeks. However, it appears that BetterLegal is doing everything they can to make things happen as quickly as possible.
Many reviews back up BetterLegal’s claims. Quite a few of the reviews we read, like this one, mentioned the firm’s speedy turnaround on the formation process.
BetterLegal’s same-day filing applies to all of their orders. There is no need to pay an extra fee to avail internal prioritization this is something that many of BetterLegal’s competitors do cost for.
Since a quick turnaround time is often one of the two most important factors when creating new businesses (the other one being the cost of formation) This is an enormous benefit for BetterLegal.
BetterLegal is a tiny company We don’t have as many customer reviews to base our decisions on as we’d prefer. Still, what’s available is very good.
BetterLegal has a 4.8 from 5 Trustpilot
They also have the score of 4.88 rating out of five on BBB. BBB.
They’re Better Business Bureau accredited as also, with An A grade.
The reviewers of BetterLegal seem to have nice things to say across all areas. They appreciate the company’s clarity in terms of turnaround times, turnaround time, and price (even though we ourselves aren’t convinced that their rates are particularly remarkable).
Limited customer support
Smaller companies in formation tend to be nimbler, more efficient, and more affordable than their larger competitors. However, many small formation companies also lack the support staff that the bigger players have.
BetterLegal is no exception here.
While the BetterLegal website provides the option of online chat, there is no contact information located on their main page. To find those pieces of info, you have go towards the end of the company’s Privacy page. There, too it’s not clear the availability of phone lines or how fast emails are answered.
BetterLegal It appears that BetterLegal similar to many of their peers – heavily rely on automated customer service.
In the ideal scenario, your registration will go through without a hitch and you’ll never need to contact a service rep. We still see the lack of service rep availability as a definite downside, though.
Below, we’ll look at some of the primary formation-related services that BetterLegal provides. We’ll discuss the reasons why and when you may require each one, and provide BetterLegal’s pricing too.
LLC Formation and Incorporation
$299 + state fees
BetterLegal can help you fill out and file all the necessary documents required to establish your LLC or incorporating your business.
LLCs, also known as Limited Liability Companies, are one of the most popular business types in the United States. They are more flexible and easy to manage than traditional corporations (C-corps) LLCs are able to meet fewer recordkeeping and compliance requirements. They can also provide important tax benefits via pass-through taxation.
Corporations have more cumbersome requirements, but they can offer certain tax or structural advantages, depending on the size of your business and field of operation.
If you’re unsure if an LLC or a corporation is the best business model for you, speak to an expert in small-scale business or an experienced accountant.
Corporations and LLCs are created on a state-level, generally through a secretary of state office in the State.
Each state has its own rules and regulations regarding the formation of LLCs, and learning about the various processes and laws relevant to you can be a significant time sink.
A lot of new business owners employ an organization service, such as BetterLegal, to fill out and complete their paperwork on their behalf. For LLCs, that means the filing of Articles of Organization. For corporations, it is filing Articles of Incorporation.
In their normal training bundle, BetterLegal will file your documents and forward it to the relevant state authorities. The process is simple and can be completed entirely online. It’s as simple as asking simple questions about your company, e.g., its name, it’s owner(s) as well as member(s), its industry, and its address. Business Formation What Is
BetterLegal will also conduct an instant name check to make sure your LLC or corporate name isn’t already used (which can result in rejection of your application).
As we stated at the beginning of this review the $299 price for the initial registration does not include state filing fees that can range between $40-$500, depending on your state of filing.
It is included in the form package
An EIN, or Employer Identification Numberis the kind of tax id that most new companies will require to get. Assigned through the IRS, EINs are legally required for businesses with employees and are also necessary when you are planning to open a business bank account.
It’s possible to think of your EIN as being like your business’s Social Security Number. Every one is unique, and is used by the IRS to keep track of business’s activities.
It’s good news that obtaining an EIN is a very easy procedure. You can apply online, through the IRS’s EIN application page, in just few minutes. You simply fill in a few lines of information about your business and you’ll receive an EIN automatically.
Since making an application for EIN is quick and painless, we always recommend against any paid EIN filing service. Unfortunately, while most companies give you the option to apply for your EIN at a cost (or in conjunction with a larger setup bundle), BetterLegal automatically includes EIN filing within the sole formation package.
You can remove EIN file from the basket when you pay, but it won’t reduce your price at all. We’re not thrilled by the way BetterLegal “builds in” the cost of EIN filing but doesn’t give you a discount for dropping the unnecessary service.
Operating Agreement or Bylaws
It is included in the formation package
A Operating Agreement is among the most essential legal documents for any LLC. Operating Agreements lay out the basics of how an LLC will be managed. They typically include information like:
- Who an LLC’s owner(s) or member(s) are in addition to how their ownership distributed between them
- How and by whom the LLC will be controlled
- How profits are to be divided
- What do you do when an owner or member leaves or dies
- …plus other crucial informational
Only a few states such as California, Delaware, Maine, Missouri, and New York – legally require that you have the Operating Agreement. Even in these states, you do not have to file the agreements with state authorities; it’s just a matter of having to keep it on hand.
However, we suggest that all LLCs in all states, draft operating Agreement and keep it on hand.
An Operating Agreement establishes your LLCs security of liability. Since liability protections are an important benefit of LLCs it is not wise to leave out these protections.
Operating Agreements can also assist in providing guidance during unexpected situations. You probably don’t go into business expecting a partner to quit or a dispute over profits to arise – however, having a well-written operating agreement available can help to navigate such situations easily.
If you’re in the process of incorporating rather than making an LLC, then you’ll require Corporate Bylaws rather than an operating contract. Corporate Bylaws function in the same way as operating agreements, and offer similar advantages to operating agreements.
A part of the primary formation package, BetterLegal will help you draft a legal Operating Agreement or Corporate Bylaws.
In the form package
A bank resolution is a essential, yet simple document. A bank resolution defines the member(s) of an LLC have the power to establish a business bank account as well as participate in other banking-related activities.
Banks require that you submit an official resolution to the bank before you can open a business bank account.
Within their formation process, BetterLegal will draft a banking resolution for your company. All you have to submit is details about who’s allowed to open and/or access a bank account in the name of your LLC.
In the form package
BetterLegal is one of only a handful of companies that offers a web domain along with its formation package. Unfortunately, the details of the service are scarce.
The main page for their service states that you’ll be able to “Set up a free website or online store with inventory management.”
However, there’s evidence of upselling here too in the following paragraph says: “As your business grows, transition to a paid plan to unlock more features and customization.”
BetterLegal includes a GoDaddy ribbon on their homepage however, nowhere does the company explicitly state the name of its third-party hosting partner is. There isn’t even a name that is listed in the terms of service for the company.
We’re all about honesty, and we’re disappointed with the BetterLegal experience in this case. In any event, we always recommend directly going to a domain hosting company or builder of business websites.
Many companies are experts in those categories, so there’s no need to get these services second-hand through a formation business.
Registered Agent Service
$90 for the calendar year, or $10.00 monthly
All corporations and LLCs are legally required to have a registered agent. Though it may sound like a fancy term however, the job of an agent registered is easy – they get official correspondence and service of processes (legal notices, like lawsuits) on behalf of the company.
Registered agents must be present during working hours, and they must be located in the same state your LLC or business is registered in.
Properly receiving official correspondence and being able respond in a timely manner is vital.
If you fail to comply with an compliance notice issued by the state or federal government, your company could lose its standing or be assessed charges or fines, or even be dissolved. If you fail to respond to a court summons and miss your court date, your case can be automatically forfeited.Business Formation What Is
The presence of a registered agent This is why it’s vital.
Technically, you are the registered agent for your company. There are numerous reasons why business owners choose to utilize an agent registered with the company.
We recommend using the an Registered Agent service when:
- You frequently travel and are not always at a single address
- You are not a citizen in the United States
- Your business is operating in several states.
- Your name and address to be made publicly available
As with other formation companies, BetterLegal offers a registered agent service. And, like most smaller formation firms, BetterLegal contracts this service out to an outside party.
The complete terms of service for BetterLegal can be found here..
If you can ignore the issue of transparency BetterLegal’s registered agent program is actually a bargain cost. You can pay either 10 dollars per month, or $190 for the year. That later price is very affordable – many other large companies charge $150 per year or more.
BetterLegal’s registered agent services are available as an add-on, but it does not come with their basic formation package. This makes them somewhat of an exception, since several competitors offer registered agent services with the formation package, typically with the first year of registration for absolutely free.
Business License Search
Based on the kind of business you manage or operate in, the type of industry you’re in, and where you’re based, you may require a couple or a lot of permits and licenses. These may be needed at the state, local, or federal level.
Licenses can be quite a hassle to handle, but they’re absolutely necessary. If you’re not in compliance and are found to be in violation, you could face an enormous fine, or even be forced to shut down your business temporarily or completely dissolved.
Finding out what licenses and permits are applicable to your specific business requires quite a bit of research. Instead of wading through tons of red tape and legalese yourself, you can hire a firm such as BetterLegal to perform a business license search.
Many formation firms provide this service. Enter the information about your business and BetterLegal will do a comprehensive search, compiling all the permits and licenses that are relevant to your needs and offering guidelines on how to fill them in.
Take note that BetterLegal will not make these filings for you; it provides the tools and information you need to file them on your own. However, this could be an enormous time saver, especially for highly-regulated businesses.
$90 for the year or $10 per month
The majority of state governments require LLCs and corporations to submit some form of annual report. Usually, these reports aren’t too cumbersome or in-depth. They’re simply an opportunity for states to keep an eye on the companies that operate within their territory.
The deadline for filing your report could be fixed (e.g. every business have to submit a report in December) or depending on the business’s creation date (e.g. If you formed in August of 2021, you’ll submit your first annual report in August 2022). Some states only require you to file a report at least every 2 years.
Filing your annual report may seem like a burden but it is a necessity and shouldn’t be a snooze. If you don’t submit your annual report in time you could be charged the cost or lose excellent standing in the eyes of the State.
Many of the formation companies, like BetterLegal, offer an annual service for compliance. For a monthly, or yearly fee, BetterLegal will send you reminders regarding your upcoming annual report deadline. Then, once you’ve entered all the necessary information and they’ll write your annual report and mail it off to the state on your behalf.
A majority of states have a modest (under $100) cost for filing annual reports – BetterLegal will accept that fee from you and forward it to the relevant authority.
Included with form package
BetterLegal also provides a small suite of third-party offerings within their corporate formation service.
Business Banking: You’ll be set up with a cost-free minimum online business bank account. The account will be linked to debit cards to the account. You’ll be able to make physical checks using an online bank account.
Tax Analysis Analyses and guidance from the “leading virtual tax service”. It’s not clear how thorough the analysis is, as well as what kind of questions you’ll have the ability to ask.
insurance evaluation: An evaluation of the specifics of your company’s requirements for insurance. The insurance services are provided through an BetterLegal partner, CHUBB Insurance, which is located within New Jersey.
Payroll Benefits, Payroll, and HR Platform: A more extensive service that, unlike other options, isn’t included in your formation packages. A variety of options are covered, all provided by third-parties.
Although it’s possible that some business owners get value out of these additional services, we’re inclined to stay clear of “offers” like these. Usually, services like these are merely opportunities for businesses to drive business to their partners.
We recommend going directly to specialists for tax, insurance, payroll and HR requirements.
As for bank accounts, it’s usually to your benefit to use an institution that has an established relationship with. In the event that you do not have a bank that meets the criteria for you, BetterLegal’s partner offer might be a good one.
Additional Filing Services
Prices can vary
BetterLegal offers a variety of filing services for one-time use that aren’t part of the main creation package. Below, we’ve listed those that we believe will be the most useful to business owners starting out and BetterLegal’s fixed cost for each.
Domesticate foreign LLC The company’s primary state in the to another, $299
reinstates an LLC corporate: Reinstates an LLC or a corporation that has previously been dissolved and is worth $199.
Ending a corporation or LLC: Legally dissolves an LLC or corporation for $199.
Obtain the Certificate of Good Standing You will receive a document from your company’s home state showing that you are up to date with all your expenses and are in compliance with the state permit and license laws, $25.
Register foreign LLC in a new state. It allows an LLC established within one jurisdiction to operate in a different state. Also known as a “Foreign Qualification,” this process usually involves applying for the “Certificate of Authority” – basically, a permit to operate in a certain state. It costs $199.
Change your principal office address: Your business’s address is changed from the one originally in your Articles of Organization or Incorporation to a new one, $99
Add or remove members, directors and shareholders. Officially alters your company’s record to reflect any changes to its directors, members, or shareholders, $99
Since BetterLegal has solid reviews with an easy-to-use website and a solid track performance in terms of turnaround times, we’re comfortable recommending these services.
Most new business owners would prefer to keep their startup paperwork and add-on paperwork in one place, though we understand that this recommendation won’t apply to all.
If you’re interested in learning more about the offers offered by competitors take a look at the reviews here!
What is BetterLegal?
BetterLegal’s primary focus on LLC formations and incorporations. However, they also offer plenty of options for the formation and operation of businesses which include searches for business licenses, registered agent service, amendment and compliance filing services.
How much will it cost to establish an LLC with BetterLegal?
BetterLegal’s LLC formation package is priced at a fixed $299, plus state fees. This package includes Articles of Organization and an Operating Agreement but it doesn’t provide a registered agent service.
Is BetterLegal legit?
Yes. The firm has been operating since 2017 as well as being Better Business Bureau accredited. BetterLegal also has an A+ BBB rating as well as a high review rating on Trustpilot.
Who do you think BetterLegal best for?
BetterLegal is the best choice for those who are willing to pay a little extra for a fast solid LLC registration or incorporation.
What are the advantages of the use of BetterLegal?
BetterLegal offers convenient online forms and has fast turnaround times. However, the company’s formation package is quite expensive. BetterLegal also outsources several of its services to third-party partner companies.
What states does BetterLegal serve?
BetterLegal is available to all 50 states.
We recommend BetterLegal to amyone looking for a solid and quick buisness formation service. BetterLegal has a proven lightning fast turnaround, mostly a day or two, and very up front pricing on all services. They are also very well rated on the better business bureau. Business Formation What Is
While some larger competitors may have some services included in packages, such as registered agent etc, all things considered this is a great deal for anyone looking to do a business formation fast and easy.