Is Incorporating Online The Best Route?
I don’t know about you, but I’ve been setting up corporations online for a few years now. I have never once hired an attorney to set up a corporation for me because with services such as BizFilings and the army of similar companies, I’ve never had a problem establishing a new company.
But this article has got me thinking: Is hiring an attorney to file and create a corporation better? I think that having an attorney is a must for all entrepreneurs, especially us young entrepreneurs just starting out. However, when it comes to filing corporations I feel that we can “get by” without any attorney but if we have the capital and time, I think we should go the extra yard and have an attorney oversee the process.
Imke Ratschko, New York City attorney states:
A real person with a law degree can help you draft an operating agreement or shareholder agreement. New York requires you to have an operating agreement for your LLC, and a shareholder agreement for your corporation is a very good idea.
Web services do not usually draft these agreements for you. If they do, you will get a “one size fits all” agreement that can be worse than not having one at all.
A real person with a law degree will remember you and your business and remind you of follow up legal issues in running a corporation or LLC, maybe even years later.
Spend some time researching your state filing requirements and don’t hesitate to go on a free consultation with a lawyer to review your options for incorporating. Taking these steps now can save you endless hours in time spent later. Not to mention how much potential money and assets you risk losing without the proper legal protection.
What have you done when it comes to filing a corporation? Lawyer or no lawyer? What web services have you found reliable?
6 Comments
Aaron
January 25th, 2007 at 4:45 pm
David,
I agree that their is a middle of the road approach. Here in Arizona it takes me about 15 minutes to prepare the documents myself and about $150 total.
Some states LLC process may be too complex to do yourself and using something like bizfilings maybe useful, but I think that most of us can save the money spent and do it ourselves.
I do think that the advice of a Lawyer would be helpful and could add useful advice and words of caution for your industry or when their is a more complicated business structure or partnership.
To save money try and prepare as much as you can yourself and then take it to your lawyer so that you don’t have to pay them for the hours of work you could have done yourself.
TJ
January 25th, 2007 at 5:12 pm
I think its a great idea to use an online service such as BizFilings (www.bizfilings.com) to form a new LLC or corporation. Avoid companies like Legal Zoo(m) that do any legal filing (divorce, wills, etc.). Stick with a company that focuses on business-related legal documents.
I recommend visiting a lawyer after you form a company (LLC or corporation) to get help with your operating agreement. Lawyers can finetune the document you need. The generic agreements might be ok if you have a single owner/member, but it’s always a good idea to have a lawyer look it over and make suggestions that are as unique as your business.
David Askaripour
January 25th, 2007 at 9:41 pm
Aaron, yeah I’m right their with you. I will most likely continue to file corporations online but also take TJ’s advice and have a lawyer fine tune the paperwork immediately after. Thanks for the awesome insight and advice guys.
Aaron K
January 25th, 2007 at 9:49 pm
David,
For some states it may be worth it if it’s labor intensive work. In Arizona it’s really easy so it’s not worth paying someone else.
I can see how it could be useful in other states though.
I wish their was some form of universal process involved. I guess that’s bureaucracy at it’s finest, lots of paperwork.
What have you thought of Bizfilings service?
TJ
January 26th, 2007 at 10:27 am
I used them after doing it myself the first time and making a mistake. I ended up having to redo bank accounts and a number of related tasks because I did things in the wrong order and had to refile (ppht!).
I really like the kit and seal that BizFilings provided…And I got the EIN and a certificate of good standing I needed for bank paperwork at the same time.
The way I figure it, my time — and having things done quickly without mistakes — is worth the modest price of doing it all online with a service like BizFilings. It’s a great compromise between doing it myself (and risking mistakes) or hiring a lawyer at a much higher cost.
William
January 26th, 2007 at 11:13 am
Great article David, I’ve never used an online company like BizFilings, but I’ve come very close to using them, but was just hesitant about how they would truly work.
It’s good to hear you guys talk about the success you’ve experienced with these online filing companies, because they are very convenient and cheaper than an attorney or C.P.A.! Might have to give them a shot in the future.
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