Why LegalZoom Fails Startups

By Incorporation

Thinking of saving some cash and using LegalZoom to incorporate your startup? Think again. While incorporating with LegalZoom is a viable option for some new businesses, LegalZoom comes up way short for startups.

LegalZoom just doesn’t offer the documents a typical startup needs: Shareholders Agreement? Nope. Stock Purchase Agreements? No. Tech transfer agreements? Nada.

What about the quality of LegalZoom documents? Robert Shapiro, co-founder of LegalZoom, explains the quality of LegalZoom documents in a 2004 interview:

“And everything we do at LegalZoom is an original document. We’re not a form-filling service. Our documents are first-rate.”

Look, I’m sure they have some great documents, but I’m calling bullsh!t on every document at LegalZoom being an ‘original’ document. For those that don’t remember, Shapiro is the dude that represented O.J. Simpson. Take that for what it’s worth.

If you don’t have the resources to hire a startup lawyer (or just don’t want to), then simply don’t hire anyone to incorporate your startup. Not your accountant, not your financial planner, and definitely not LegalZoom.

Instead, do it yourself and save even more money. If you need help, I think you’ll find that employees at the Secretary of State are very helpful. They will not be able to help you draft your documents, but they will answer your questions about incorporating. And some states will have template articles of incorporation you can use.


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