Competition from Legal Zoom

[Strongsilence-CPA]

I became aware from a client that Legal Zoom prepares taxes. I didn't know that!  And he said Intuit owns Legal Zoom.  (That seems to be true from a press release I found form 2021. I wonder what is driving strategy with that relationship; maybe referral fees only?)

Client told me LZ refused to prepare his S Corp taxes when they saw two personal expenses for trips to Mexico in his corporate QBO books. Something about foreign business limitations.  It was April 13, 2024, and they had not informed him.

I'm going to stop referring legal work to Legal Zoom.  

What do your local attorneys charge for S Corporation formation, registration, etc.?

Be Well.  

LegalZoom Curates Network of Small Business Service Providers 

 Nov 04, 2021

Brex, Intuit QuickBooks, and Square Partner with LegalZoom to Provide Best-In-Class Services to Small Business Owners

GLENDALE, Calif., Nov. 04, 2021 (GLOBE NEWSWIRE) -- LegalZoom.com, Inc. (NASDAQ: LZ), a leading online platform for legal, compliance and tax solutions, has developed a curated, robust partner ecosystem of complementary, best-in-class services that provide small businesses with the right tools and services to manage and grow their business.

Research conducted by LegalZoom shows that at the time of formation, among many vital services, 91% of new small businesses do not have payroll; 85% need payment processing solution; and 85% need a business banking account. As a trusted advocate for its customers, the LegalZoom partner ecosystem makes it easier for small business owners to select the right services for their particular needs at the appropriate time. Recent small business service providers that have partnered with LegalZoom on this initiative include Brex, Intuit QuickBooks and Square.

[BobKamman]

"On January 6, 2014, European private capital firm Permira announced its intent to acquire $200 million in the outstanding equity of LegalZoom and become its largest shareholder pending regulatory approval.  On February 14, 2014 Permira announced that the deal was complete."

That's the most recent ownership information from Wikipedia.  It's still a publicly traded company, so maybe Intuit owns some shares.  Maybe @Jim-from-Ohio owns some too.  

Around here, the CPA's have no qualms about doing corporate and LLC formation paperwork.  Occasionally I see it done right.  

[BobKamman]

LegalZoom’s annual report says:

“Holders of Record
As of February 15, 2024, there were 131 holders of record of our common stock.”

–because most retail shareholders hold it in street name. Major shareholders are listed here; Intuit is not among them:

https://www.marketscreener.com/quote/stock/LEGALZOOM-COM-INC-11177985/company/ 

[Jim-from-Ohio]

@BobKamman never been on this board before. anyway.. I don't own any of that stock but  Alphabet (Google) was up bigly today!.  Big fan of that stock as well as Intuit, Howmet, Chipotle, and many others. 

[qbteachmt]

"when they saw two personal expenses for trips to Mexico in his corporate QBO books. Something about foreign business limitations."

Well, the limitation has nothing to do with Personal. As far as mixing up what is and isn't business, it would seem that LZ is going to have very few clients, if they are trying to draw the line at that action, because I see it all the time.

[sjrcpa]

We also may not be getting the whole story. Maybe client tried to say it was deductible and LZ said no.

And that S Corp return was due March 15, so the April date is moot.