As you start your new business, you may be overwhelmed with all the steps required to get it up and running. As you juggle compliance and state requirements, you will also be busy negotiating with investors and finding employees.
Choosing a business structure is also important. The most popular business structure chosen by small businesses is the Limited Liability Company (LLC).
There are several reasons why incorporating a business is vital. Incorporating gives the business credibility, and it protects you, the business owner, from liability. If you decide to not incorporate and prefer a sole proprietorship, your business entity will not be separated from your personal assets.
As you go about creating your LLC or other business structure, you need to know that you have not missed any important steps in the incorporation process.
There are several ways to incorporate a business. Some people prefer to use the services of a lawyer, but this can be costly. Other ways include doing it yourself or using an incorporation service.
Can you incorporate your business without help?
You don’t need a lawyer to incorporate your business, but it is a lengthy process and requires the filing of some special paperwork.
In most states, forming an LLC requires that you also file and article of organization with the secretary of state’s office. Before you start registering your LLC, you will also need to have decided on a business name and choose a registered agent service.
The articles of organization are one of the most important documents used when filing for an LLC. It must be filled in correctly and filed to the state with the correct filing fees.
To open a business banking account and to hire employees, you will also need to get an Employer Identification Number (EIN).
Pros and cons of incorporating your business without any help
Pros include that you can do it all yourself and learn a few things about how these things are done.
The cons include that it can take you more time than necessary and that you may forget to file important documents. You will have to keep a note of compliance deadlines so that you don’t miss any and face heavy penalties. Also, you will not have any support for any important business formation issues.
How can you benefit from using an incorporation service?
An incorporation service can help you make the right choice when you are deciding on your business structure. Even though the most popular business structure for small business is a Limited Liability Corporation (LLC), there are also other business formations you may want to consider. These include nonprofit for charitable organizations and various types of corporations.
Business formation services take you through all the steps required to incorporate your business. Some also have free downloads of the articles of organization or charge a minimal fee for it.
Incorporation services will also make sure that you don’t forget to file any important papers and they usually charge a reasonable fee + any state fees. Most business formation services also throw in a free year of registered agent services.
Having a registered agent service is important for your business because they will receive all legal and business-related documents. Once these are received by them, they notify you so that you can meet all compliances. Business formation services also guarantee that you won’t miss any important dates for legal matters.
Most important, business formation services save you lots of time because they make sure you don’t forget to submit any important paperwork that can delay your LLC formation. Most incorporating services also offer expedited filing which will help you start your LLC much quicker.
Pros and cons of using an incorporation service
Incorporation services pros:
- No legal knowledge required, and they do all the paperwork on your behalf
- You are always made aware of future legal requirements
- Save you time that you can use to focus on your business
- Continuous customer support
Incorporation services cons:
- If you prefer a personalized service, you may choose to use an attorney
Find out all you need to know about using incorporating services.