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.

Comments

[Rush Nigut]

I could not agree with you more. I just wrote a post on similar issues I have with LegalZoom. Check out http://www.rushonbusiness.com/2007/01/zoom_past_legal.html

Rush