by Richard Keyt, Arizona LLC attorney

Richard Keyt vs. LegalZoom

I do not compete with Arizona lawyers for Arizona LLC formation business.  I charge way less than other Arizona lawyers and what I give my clients is way more than what other lawyers provide.  My main competition for Arizona LLC formation business is LegalZoom and other uninsured document preparers.  In this article I will show:

  • Why I charge less than LegalZoom when you compare what it provides in its Express Gold package vs. what I provide for every LLC I form.
  • Why nobody should use LegalZoom to form an Arizona LLC

Prices Charged by Richard Keyt & LegalZoom

After you read this article and the supporting pdf documents to which it links, I doubt you will hire LegalZoom to form your Arizona LLC.  First the table below compares my Arizona LLC formation services and price with that of LegalZoom and shows that for similar services I charge $54 less than document preparer LegalZoom or $103 if you hire LegalZoom to obtain a federal employer ID number.

Comparison of Arizona LLC Formation Prices & Services
Arizona LLC Attorney Richard Keyt’s vs Document Preparer LegalZoom as of July 24, 2011

ServiceRichard Keyt's LLC Service $597LegalZoom's Express Gold LLC Service $359
LLC name serviceyesyes
Arizona LLC attorney available to answer questions before, during & after forming the LLCyes - we have 3 Arizona LLC attorneys?
Arizona LLC attorney prepared custom drafted Articles of Organization or Arizona Corporation Commission file in the blanks AOOyes?
File Articles of Organization with Arizona Corporation Commissionyes? its website says AOO are filed with the Arizona Secretary of State
Copy of Articles of Organization with ACC received stamp emailed to client w/i 1 day of filingyesno
Custom Operating Agreementyesyes
Operating Agreement approved by an Arizona LLC attorneyyes?
170 page Arizona LLC Operations Manual that explains how to operate an AZ LLCyes - written by Arizona LLC attorney Richard Keytno
Indemnification clauseyesyes
Restrictions on transferyesyes
Organizational resolutionsyesno
Company resolutions for bankingyesyes
Legalzoom peace of mind reviewnoyes
Arizona LLC attorney peace of mind reviewyesno
Business/LLC newsletteryesyes
Deluxe LLC kityesyes
Company sealnoyes, but it is completely worthless & has no legal significance. It is just marketing eyewash.
Customized membership certificatesyesyes
Membership transfer ledgerno - not neededyes
Priority rush serviceyes - 3 days or less before filing with the ACC7 - 10 days
Federal taxpayer identification number application preparationyesyes
Statutory agent service 1st yearyes, but $99/year after 1st year$159 additional plus $159/year after 1st year
Arizona Corporation Commission expedited filing feeyes$85 additional
Prepare Notice of Publication to submit to a newspaperyesno
Deliver Notice of Publication to an ACC approved newspaper in the appropriate countyyes$50+ Note: LZ does not assist in newspaper publication. Expect to pay $50 or more to publish in a Maricopa county newspaper. Newspaper publication is a pain in the butt.
Obtain Affidavit of Publication from newspaperyesno
Deliver Affidavit of Publication to the ACCyesno
Price for all services listed above$597$653
Extra service: obtain EIN$75 but you should not pay us for this because our LLC Operations Manual explains how to get the EIN online at www.irs.gov in 5 - 10 minutes$49
Total Price for all LLC services including EIN$597 assumes you don't need to hire me to get your EIN because you follow my simple instructions in the Quick Start Guide and get it yourself online at www.irs.gov$702
Lowest price & best LLC formation serviceRichard Keyt is $105 cheaper than LegalZoom

My table excludes several additional items LegalZoom offers that I call “fluff” and that are not related to forming an LLC such as legal forms (which we also provide) and free attorney phone calls (which we also provide).

KEYTLaw Girl Demonstrates the Contents of Richard Keyt’s Arizona LLC Portfolio

I am very proud on the custom drafted documents I prepare for every LLC I form.  Because words cannot adequately describe what I do, the KEYTLaw Girl and I made a video that shows what we give to every LLC client.

Why Nobody should Ever use LegalZoom to form an Arizona LLC

What follows is my list of reasons why nobody should ever hire LegalZoom to form their Arizona limited liability company.

1.  Ignorance of Arizona Law.  I urge you to read the scary and factually inaccurate statements LegalZoom put on its website on a page called “Form an Arizona LLC.”  I made a pdf of the page on 7/24/11 and highlighted important LegalZoom statements with a yellow highlighter and annotated the statements by adding text boxes.  Here are some of the whoppers LegalZoom made about Arizona LLC law:

  • “the Arizona Corporate Commission, a division of the Arizona Secretary of State”  Not true.  The Arizona Corporation Commission is not affiliated with the Arizona Secretary of State.
  • “a member must be a person”  Wrong.  Trusts and entities such as LLCs, limited partnerships, and corporations can be members of an Arizona LLC.
  • “Every Arizona LLC must have a registered agent in Arizona.”  Nope.  Every Arizona LLC must have a statutory agent.  Other states have registered agents, but not Arizona.  Why doesn’t LegalZoom know that?  See Arizona Revised Statutes Section 29-604.
  • Here’s my favorite LegalZoomism:  “Once an Arizona LLC has been created, the Arizona Secretary of State will require certain recurring responsibilities and duties. The most important of these are explained below. For further information, refer to the Arizona Secretary of State office.”  Wow!  Total and complete ignorance of Arizona LLC law.  The Arizona Secretary of State does not have anything to do with Arizona LLCs.  Question for anybody who might want to hire LegalZoom to form an Arizona LLC:  If LegalZoom can be so wrong on something so fundamental about Arizona LLC law, why would you trust LegalZoom to get the more complex Arizona LLC issues correct?
  • “Filings must be made with the Arizona Secretary of State in which the LLC was organized, along with the appropriate state filing fee. When appropriate, one check must accompany the document, payable to the Secretary of State, covering all charges for the Arizona Secretary of State.”  Icks nay! Negative.  Nope.  No way.  Wouldn’t be prudent.  No, no, no.  Nein.  Forget it.  Bad dog!  Articles of Organization to form an Arizona LLC are filed with the Arizona Corporation Commission.  If you try to file Articles of Organization with the Arizona Secretary of State it will be rejected.

2.  LegalZoom Warns People it May Not be Correct, customers should consult with a lawyer, it is  not responsible if it screws up, and customers assume the risk it screws up.  These gems are contained in the full text of LegalZoom’s disclaimer (please read this doc that I highlighted and annotated) that was a tiny link at the bottom of its “Form an Arizona LLC” web page.  Here are some of my favorite CYA statements warnings contained in the full disclaimer.

  • “the employees of LegalZoom are not acting as your attorney. LegalZoom’s legal document service is not a substitute for the advice of an attorney.”  Did you catch that warning that you should consult with an attorney?
  • “LegalZoom cannot provide legal advice.”
  • “LegalZoom is not permitted to engage in the practice of law. LegalZoom is prohibited from providing any kind of advice, explanation, opinion, or recommendation to a consumer about possible legal rights, remedies, defenses, options, selection of forms or strategies.”
  • “you are representing yourself in any legal matter you undertake through LegalZoom’s legal document service.”  Did you ever hear the old saying that the person who represents him or herself has a fool for a client?
  • “At no time do we review your answers for legal sufficiency, draw legal conclusions, provide legal advice or apply the law to the facts of your particular situation.”
  • LegalZoom and its services are not a substitute for the advice of an attorney.”  For people who were not paying attention the first time, this is LegalZoom’s second warning in the short full disclaimer that people should get legal advice from an attorney.
  • ” the legal information on this site is not legal advice and is not guaranteed to be correct, complete or up-to-date.” OMG!
  • ” LegalZoom cannot guarantee that all the information on the site is completely current.”  Second warning.
  • “Therefore, if you need legal advice for your specific problem, or if your specific problem is too complex to be addressed by our tools, you should consult a licensed attorney”  Warning:  This is the third time LegalZoom has made this warning.  Do you think it is maybe trying to tell people to consult with an attorney?
  • “LegalZoom is not responsible for any loss, injury, claim, liability, or damage related to your use of this site or any site linked to this site, whether from errors or omissions in the content of our site or any other linked sites, from the site being down or from any other use of the site.”  Unlike an attorney who is liable for malpractice and who cannot avoid liability with a disclaimer, LegalZoom hopes to avoid liability for its mistakes by virtue of the fact it has this text in its hard to find “full disclaimer.”
  • your use of the site is at your own risk.”  Sucker!

3.  Washington Attorney General zooms in on LegalZoom’s claims.  Here is the text of a September 16, 2010, press release by the Washington Attorney General about its action against LegalZoom:

If you’ve watched cable TV, you’ve likely seen celebrity attorney Robert Shapiro tout his company, LegalZoom, as a way to start businesses, patent inventions and create wills. “We put the law on your side,” he says.

 But the Washington Attorney General’s Office wants to be sure consumers aren’t misled by LegalZoom’s cost-saving claims.

 “LegalZoom offers do-it-yourself legal documents online but can’t provide you with legal advice or tell you which forms to fill out,” Attorney General Rob McKenna said.

 Under a settlement with the Attorney General’s Office, LegalZoom can’t compare its costs to attorneys’ fees unless the company clearly discloses that its service isn’t a substitute for a law firm.

 Simply selling legal forms doesn’t constitute the practice of law. LegalZoom can only provide an online form service that allows consumers to choose and complete their own legal documents, explained Consumer Protection Division Chief Doug Walsh.

The agreement filed today in Thurston County Superior Court also prohibits LegalZoom from engaging in the unauthorized practice of law, selling personal information obtained from Washington customers or misrepresenting the benefits of any estate distribution document.

Additionally, the agreement requires LegalZoom to ensure any forms sold to Washington consumers comply with local laws. Walsh said the Attorney General’s Office was concerned LegalZoom’s estate planning documents weren’t sufficient for all Washington state residents. For example, the company doesn’t offer a Community Property agreement form, a document commonly combined with a simple will in order to avoid probate when there is a surviving spouse. If consumers need individualized advice about estate planning legal documents, they are well advised to consult an attorney.

Read the Assurance of Discontinuance signed by the Washington Attorney General and LegalZoom that was filed with the Washington Superior Court.  It contains the following statements:

The Attorney General deems the following to constitute unfair or deceptive acts or practices and unfair methods of competition in violation of RCW 19.86.020:

e.  Engaging in the unauthorized practice of law in violation of Chapter 2.48 RCW, specifically, by providing individualized legal advice about a self-help legal form to Washington consumers.

f.  Failing to offer estate planning legal forms in Washington that conform to Washington law.

g.  Failing to have an attorney, licensed to practice law in Washington, review all self-help estate planning forms offered for sale to Washington consumers.

h.  Selling, transferring, or disclosing Washington consumer information to third parties obtained in the course of consumers acquiring estate planning legal forms, documents or document services, except where the consumer is given the opportunity to opt in with regard to the specific third party’s offering.

4.  Ripoff Report from an Unhappy Customer.  In a June 29, 2011, Ripoff Report, a very unhappy LegalZoom Arizona LLC formation customer said:

“Legal Zoom is completely misleading with regards to their ‘expedited”‘service for LLC registration.  I purchased the Express Gold Package for $359 instead of the $99 standard service because it guarantees a complete turnaround in 7-10 business days.  I completed the order on the 27th of May and as of the 29th of June I am still waiting on my documents! Far from the 7-10 day guarantee.

Legal zoom claims that it is the states fault due to backlog however we created another LLC during this time frame and we actually walked the docs in and walked out with the state info within 30 minutes. Some backlog.  In the end what recourse do you have for pursuing a legal services company? The only recourse I have is my voice and hopes that other people with not get scammed by the claims of ‘expedited’ service!”

Conclusion

If anything I’ve said above is incorrect, please tell me.  I wrote this article for two reasons:

1.  I want to warn people about LegalZoom’s Arizona LLC formation service.

2.  I want you to hire me instead of LegalZoom to form your Arizona LLC.

If you need an answer to a question about Arizona LLCs, call me, Richard Keyt (602-906-4953, ext. 1) or my son KEYTLaw LLC attorney Richard C. Keyt, JD, CPA (602-906-4953 ext. 3). We don’t charge for answering LLC questions.

How to Hire Arizona LLC Attorney Richard Keyt to Form Your Arizona LLC

We’ve made it very easy to hire Richard Keyt (4,000+ LLCs formed) and KEYTLaw, LLC, to form your new Arizona LLC.  We offer three LLC formation packages and prices: $397 (Bronze package), $597 (Silver package) & $997 (Gold package).  See our table that compares LLC formation services for each of the three packages. For a detailed explanation of the LLC formation services we provide for each of the three packages see “Contents of Our Bronze, Silver & Gold LLC Formation Packages.

To hire Richard to form your new LLC select one of the following two options:

Option 1 – Telephone

Call any of the following KEYTLaw people and give your LLC and credit card information over the phone:

  • KEYTLaw LLC legal assistant Gia Goodman – 602-906-4953 ext. 7

Option 2 – Online

Our online process is extremely easy and available 24/7.

P.S.  If you don’t want to hire an attorney to form your Arizona LLC, I suggest you do it yourself because I doubt that any document preparer’s services are worth the cost.  For how to form a do-it-yourself Arizona LLC, read my article called “How to Form an Arizona LLC.”