Cheap Web Incorporations

California business attorney Nina Yablok put an incorporation service to the test and has good reasons for not recommending their services to startup businesses:  corporate services – almost a scam.  Another almost scam on new businesses in New York by web incorporation services:  Talking them into a registered agent for an annual fee.  New York does not require you to have a registered agent and there is no benefit in having one.  So don’t pay for one.

Setting up your business entity through a web service may seem cheap at first.  However, remember that it is very important to develop a relationship with a business attorney early in the life of your business.  Many business attorneys make this easy for you by offering flat fee business entity formations and initial free consultations.  Just call a couple of them and ask.  Other benefits of using an attorney for your business entity formation:

– a real person with a law degree takes responsibility for your business entity formation;

– a real person with a law degree is available to answer questions and help you decide what business entity is right for you;

– 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.

About Imke Ratschko

Imke Ratschko is a New York Attorney helping small businesses, business owners and entrepreneurs with all things "Small Business Law," such as litigation, contracts, business owner disputes, shareholder and operating agreements, sale or purchase of a business, investors, and starting a business. You can reach her at 212.253.1027.


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