Choosing an Incorporation Service Provider

Choosing an Incorporation Service Provider

There are three ways to incorporate your company: You can have it done on the internet via an incorporation service provider, you can pay a lawyer to do it, or you try can do it yourself. We will discuss all of them here.

Incorporating on the internet with an incorporatio service provider

Incorporating on the internet is an increasing popular method. It's easy to see why. Using a incorporation service provider is cheaper and easier than working with a lawyer. However, there are several problems with incorporating using this method: It's very difficult to customise an incorporation to meet your unique needs. In addition, many providers don't provide the service level and handholding that many first time entreprenuers would want. Yet despite these problems, incorporating on the internet can be a easy, inexpensive and very efficient process. At a bare minimum, if you plan on incorporating you should look at the website of several service providers to see what they offer.

If you decide to use an internet incorporation, be sure to check out lots of sites. Price ranges and service levels can differ widely, so be sure to shop around. To make your life easier, we've developed a page of links to several incorporation service providers.

Finally, many of these internet incorporation companies have several hidden fees that they don't advertise.

Incorporating with a lawyer

According, to small business legal expert, Elena Fawkner, "Forming a corporation is a relatively straightforward matter (at least for an attorney) and shouldn't cost you more than a few hundred dollars depending on the complexity of the corporate structure. Most attorneys would charge between $500 and $1,000 for a straight C or S-corporation....Your attorney will prepare and file articles of incorporation with your State's Secretary of State, and then prepare by-laws and organizational minutes. You'll need a Federal Employer Identification Number (SS-4) from the IRS and, if you have more than one shareholder, a buy-sell agreement to ensure that the shares do not pass to shareholders unacceptable to the other shareholders. Your attorney will also attend to annual filings with the state (a statement of officers and directors is usually required to be filed every one or two years) and make sure you stay in compliance with state corporate requirements (such as annual minutes etc.)."

In short, a lawyer offers a more expensive but higher service option to the internet incorporation companies.

Doing it yourself

The DIY solution is the cheapest, but hardest and most dangerous of the three options. If you make a mistake, you could really harm your business. However, every entrepreneur is always trying to save money and some do pursue self incorporation. To read more about this route, click on our article on it.