A professional business registration service may be a better fit if you’re looking for hands-on advice. An online business registration platform can also help you, but you’re less likely to talk to experts and more prone to mistakes.
Registering your business requires you to cut through a lot of red tape and understand a lot of jargon.
That’s why so many aspiring small business owners reach out for help when starting their business. Many people either seek out the help of experts at a professional service or use an online platform like LegalZoom or ZenBusiness to guide them through the process.
What’s the difference between them?
- A professional service lets you work with a person or group of people either virtually or in-person to register your business.
- Online business registration services are platforms where you enter your personal and business information and have the process more automated
Both methods are useful and give you the start you need to build the business of your dreams. But they’re very different — and your priorities should determine which one is best for you.
In general, professional services are better for building long-term relationships with experts who can guide your business in the right direction. Online registration services are better for a quick and easy option without much personalized guidance.
Find out which method is best for you and your future business by learning the pros and cons of each.
At a glance: Online business registration vs. professional service registration
Here’s a quick glimpse of the pros and cons of each business registration method. We’ll explain each pro and con in more detail below.
Receive expert guidance
Talk to real people throughout the process
Develop long-term relationships to grow your business
You only need yourself
Go at your own pace
Slower registration times
Not as much hands-on guidance
Less opportunity for long-term planning
Easier to make mistakes
Pros of using a professional business registration service
Hiring real people to register your business is best for people who are looking for expert guidance and a long-term relationship to grow their business.
Professional business registration services usually exist at tax firms, accounting firms, law firms or on their own. Below are some of the reasons a first-time small business owner might want to go with a professional service over an online platform.
You can receive expert guidance
If you’re registering a business for the first time, it can be overwhelming – especially when deciding how to structure your business.
An online platform like LegalZoom or ZenBusiness can give you the tools to create your business, but you won’t be able to ask someone which choices are best for you. For example, you might not be sure if you should create an LLC or an INC – or if you should elect to become an S corporation.
Fixing mistakes with your business’ legal and tax structure early on can be time-consuming and expensive. So expert guidance can save you from making those errors and help make your registration smoother.
You can talk to real people
Talking to real people during the business registration process can be huge help.
With a professional service, you can just hop on a call or schedule a meeting with an expert and have all your questions answered. But more importantly, real people can provide you the explanations behind those answers. When you understand the reasons behind what you’re doing, you’ll become a more empowered business owner.
It’s also more convenient talking to real people when you have a complicated or unique financial situation. Your circumstances are a lot easier to get across when you’re talking to a real person during the process.
And because you’re talking to an expert, you can receive the personalized feedback and guidance you need.
You can develop a long-term relationship to grow your business
Another benefit of working with a professional service to register your business is that you may end up relying on them for more support in the future.
For example, you might be registering your business using an accounting firm. If you like the people you worked with, you could turn to them for your bookkeeping, payroll and other accounting needs.
The same idea applies if you’re working with a tax or law firm. A long-term relationship with experts can help ensure you’re staying compliant and keeping up with the best practices. As your business scales, you’ll want someone to scale with you – because your needs might scale, too.
Cons of using a professional business registration service
Even though you can develop a long-term relationship and receive personalized guidance from professional business registration services, there are a few cons.
They can cost more
You may end up paying more for your business registration if you opt for a professional service.
With online services like LegalZoom or ZenBusiness, you’re paying for the platform. With a professional service, you’re paying for people’s time, their expertise and their services – which typically ends up being more costly because of the value you get from working with experts.
However, online services have several add-ons that can increase your cost. Before you register your business, be sure to compare the prices and service offerings of each option to find the best fit for you.
Registration may take longer
Professional services aren’t as automated as online services are. That means you might have to wait longer to have your business registered.
If you need more advisory or discussion, it might take longer to register your business. You’re also dependent on someone else’s schedule – so there might be conflicts or scheduling delays when you’re trying to reach someone.
When should I use a professional service to register my business?
This option may be right for you if you’re looking for some of these features:
- Expert guidance and direction when registering
- People you can ask questions to
- Help with any complicated tax or legal issues
- Services you can use even as your business scales, like tax filing and accounting
Every professional service is different. Shop around for different services to find one that best meets your needs before you trust them with one of the biggest business decisions you can make.
Pros of registering your business with an online service
LegalZoom and ZenBusiness are two of the most popular online business registration services. They both provide EIN registrations, registered agent services, operating agreements and many other essentials for new business owners.
Even though they provide much of the services that professional services do, they have some advantages over them.
You can save money
Online business registration services often cost less than professional services do. You likely save around $100 to $300 on a basic business registration package, depending on your state. Their pricing is often at a flat rate, which makes it easier to estimate how much you’ll owe.
Places like LegalZoom and ZenBusiness have their prices publicly available. Some professional services require you to ask for a quote – so you might have to put in extra legwork to figure out their pricing.
You can register faster or at your own pace
When you’re registering with an online service, you can usually have your basic documents filed within the software in just a few days. But the faster you want everything filed, the more you’ll likely have to pay.
Another pro about using an online service is you can also take it slower if you need to. If you’re mulling over decisions like the name of your business or who’s going to own how much, you can save your information and continue whenever you’re ready.
You can handle it on your own
Using an online business registration service doesn’t require you to talk to anybody while you’re making decisions.
This can be a huge benefit for people that have already received guidance and know what they want to do with their business. You can just jump straight into filing your paperwork.
Cons of registering your business with an online service
Although there’s a lot of independence when you register your business online, there are some cons associated with it.
You don’t receive as much hands-on guidance
There’s nobody you can ask questions to or talk about the specifics of your business while registering your business online.
There are some resources they provide you, like LegalZoom’s quiz to help you decide the structure of your business. But if you have a complicated situation, then you should make it a point to talk to an expert to make sure your circumstances are accounted for.
Less opportunities to build long-term strategy
If you use an online service, you usually never interact with the platform again after you’re set up (if you don’t opt for additional services). But there are plenty of decisions you need to make even after your business is officially formed.
Those can include how to handle your taxes to maximize your savings or set up your accounting infrastructure. Professional services working with you to register your business, like a tax or accounting firm, can give you access to long-term services that can help you grow and better your business.
You can seek outside resources for building your long-term strategies after registering your business online – but it’s easier for some business owners to stick with the same people that already understand their business.
It’s easier to make mistakes
Although registering your business online can be faster than using a professional service, you can be more prone to mistakes.
|❌ Learn about six mistakes you should avoid when starting your small business.|
You might misclassify your business or industry, which could impact what type of business structure you can and should register as. Different states have different rules for what types of businesses can be LLCs – so something like that might slip through the cracks.
When should I use an online business registration service?
Online business registration services like LegalZoom and ZenBusiness can work faster and be more convenient for many first-time business owners. If you’re looking for any of these features, then this option may be best for you:
- You know how to structure your business already
- You’d rather handle the process on your own without much communication
- You want to save money
- You’re not looking for a long-term partner who can help grow your business
If you’re set on registering your business online, learn more about LegalZoom and ZenBusiness – and how they compare.
The bottom line
Registering your business correctly is crucial – and it’s something that should take a lot of thought and planning.
Using a professional service or online business registration service can help take that stress off your shoulders. However, the best option for you depends on your needs, budget and circumstances.
In general, people who want the help of experts and a long-term relationship to grow their business should go with a professional service. People who just want the tools do the job themselves should go with an online service.
If you’re still not sure which method is best for you, schedule a free call with a DiMercurio Advisors team member today to explore your options and start building the business of your dreams. You can also view our business registration plans and prices.