By Martha Jones
Best Company Formation Services
Our Picks For The Best LLC Services In 2021
We rank, and review each of the top-rated business formation services, highlighting the pros and cons so our readers can make an informed decision on the formation service that best fits their needs.
#10 LegalZoom LLC Services
- LLC Formation & Incorporation Services
- $349. LLC Filing (Express Gold Plan)
- $249. One-Year Registered Agent
- $159. Operating Agreement, EIN, $69. Compliance Calendar
- = $826 + state fee
#9 CorpNet LLC Services
- CorpNet Promises Fast, Reliable & Hassle-Free Business Formations
- CorpNet Has Formed Over 100,000+ Corporations and LLCs Since 1997
- LLC Formation and Incorporation Services
- LLC Pricing Starts at $79 + state fee
- Trustpilot Reviews “Excellent”
- LLC Formation and Incorporation Services
- $349 + state fee, includes
- LLC Formation, Employer ID (EIN), LLC Operating Agreement, Articles of Organization
- Registered agent 1-Year
- LLC Formation and Incorporation Services
- Over 20 Years of Experience
- A Branch of Deluxe Corporation
- $99 -$324 Start-up Fee
- Over 1,000,000 Businesses Served
- LLC, C-Corp, S-Corp, C-Corp & Non-Profit
#5 Rocket Lawyer
- LLC Formation and Incorporation Services
- Great For Business Formations & Ongoing Legal Services
- Free 7-Day Trial With One Free LLC Formation Filing Application
- For Non-Memberships, LLC formation Starts at $99. + state fee
- Legal Plan Subscriptions, $39.99/mo Premium Plan + state fee.
Offices In 50 States
#3 Northwest Registered Agent (Monthly Plan Available!)
- Leader In Registered Agent Services
- LLC Formation and Incorporation Services
- Privacy by Default
- LLC Pricing Starts at $100.00 + state fee
- Most Popular Plan $225 + state fee
- Strong customer service, with a direct phone line and same-day email response
Editor's Choice! Best Registered Agents!
Registered Agent Services Included
- Over 100,000 Businesses Formed!
- The Starter Plan is $49 + state fee and includes state filing, Articles of Organization, and Registered Agent Services for the 1st year, formation in about 1-3 weeks!
- The Pro Plan is $199 + state fee, everything in the Starter Plan, formation done in 4-6 business days and this an Employer ID Number (EIN)
- The Premium Plan is $299 + state fee, everything in the Pro Plan, formation in about 1-3 business days, business website, domain, and email.
- Registered Agent Service (1st Year FREE) – an affordable $119 for every succeeding year
Our 2021 Ranking (Top To Bottom)
#3 Northwest Registered Agent
#4 Swyft Filings
#6 Rocket Lawyer
#7 Inc Authority
Formation Pricing (Including 1-Year of Registered Agent Services)
#1 ZenBusiness$199 Editor’s Choice!
100,000+ Business Formations!
#2 Incfile $149 Editor’s Choice!
#4 Swyft Filings $448
#5 MyCorporation $325
#6 Rocket Lawyer $250
#7 Inc Authority $399
#8 Nolo $507
#9 CorpNet $199
#10 LegalZoom $826
Note: Prices are from the merchant’s websites published in January 2021. Prices are subject to change at any time.
At one point, legal services used to cost companies thousands to maintain annually. Nowadays, those very services can be attained inexpensively and come with a lot more versatility. These services are modernized with the inclusion of digital processing.
Legal service providers on the internet offer small businesses the ability to file documents, fulfill legal requirements, and maintain compliance, when required, at budget-friendly rates. Whether it involves private attorney networks or services that are membership-based, this industry has no shortages of competition.
Small businesses looking to spend less on legal costs will find relief using such providers. Just ensure that the one you sign up with is reputable.
Seek out online providers that offer services you will actually use – ones that provide competitive rates and have quick processing times. If legal resources for educational purposes are something, they give you access to, even better.
LegalZoom Coupon Codes 2021 🤠
Interested in LegalZoom LLC services?
🥳 We have found three LegalZoom LLC coupon codes. These promo codes can save you up to 71%.
There is no need to enter any promo codes or coupon codes, just visit their websites. Combined, over one million business owners have used these “coupon codes” to save on startup costs. 😀
The LegalZoom coupon codes are,
#1 ZenBusiness (Save 71%)
#2 Incfile (Save 71%)
#3 Northwest Registered Agent (Save 61%)
To redeem these LegalZoom coupon codes, just visit any of these three LLC services.
LegalZoom vs ZenBusiness
LegalZoom prices are from the LegalZoom website on March 1, 2021.
The following top 10 list presents the leaders in online business formations.
#1 ZenBusiness: Form An LLC With The Leader in Business Formations
✔ Rates: business formation packages begin at $49 + state filing fee
✔ Sign-Up Process To Create An LLC: choose a plan, the state you reside in, and your entity.
✔ Refund Policy: completely refundable (expenses excluded).
Visit The ZenBusiness Website
ZenBusiness utilizes automated processes and technology, providing you with a quick and affordable way of forming your business and managing it. The services they provide come at discounted prices.
They offer yearly package plans and add-ons. You can obtain support from experts, search for names, and file your business without paying anything extra. You also have the option to use registered agent services for $119 annually, which serves as a dedicated office, allowing you to receive federal, legal, and state notices.
ZenBusiness Individual Services
|Registered Agent Service||$119 per year|
|Worry-Free Guarantee||$129 per year|
|Employer ID Number (EIN)||$70 one-time charge|
The Folks At ZenBusiness
ZenBusiness offers a Worry-Free Guarantee ($119 annually), which helps you file reports/taxes on time.
ZenBusiness Reviews Jan. 2021
ZenBusiness has been featured on Fortune, the New York Times, TechCrunch, and Yahoo Finance. There are complementary timing and fee estimator tools on their website, which help you bypass surprises when it comes to deadlines, delays, and fees.
ZenBusiness charges $49 for their basic formation service, but most people upgrade to a Pro or Premium package for the more thorough features.
ZenBusiness vs LegalZoom
Pro Plan vs Standard Plan
LLC Filing, Formation, EIN (Tax ID), Operating Agreement, One-Year Registered Agent, State Compliance, Express Shipping
ZenBusiness $199 + state fee (Our #1 Pick)
LegalZoom $1037 + state fee
$329. LLC Filing
$249. One-Year Registered Agent
$159. Operating Agreement, EIN
$280. State Compliance
LegalZoom = $1037 + state fee
ZenBusiness = $199 + state fee
ZenBusiness LLC Services In 2021
✔ Trustpilot rating ‘Excellent‘ 4,000+ reviews
✔ Competitive rates.
✔ Automated technology simplifies things.
✘ Once the paperwork is sent, changes or cancellations are not possible.
✘ Mistake-free guarantees are not offered.
#2 Incfile: Great Choice, Great Value
✔ Rates: No hidden costs; prices begin at $0.00 + state filing fee.
✔ Sign-Up Process To Create An LLC: Select state and formation type.
✔ Experience: 500,000+ Businesses formed since 2004.
Incfile Customer Reviews 2021
LLC Formation Pricing
IncFile was called one of the best entrepreneurial businesses in the USA by Entrepreneur Magazine this past year. The expectations people have of this company are regularly met. The lack of state fees is a great starting point, and things get even better from there.
Whether you are forming a non-profit, corporation, S-corporation, or LLC, IncFile can help you. Each plan comes with a complimentary consultation for business taxes, digital order tracking, registered agent services (free for the first year), article filing, and name verification.
Further, they offer a lifetime promise for customer support, processing within one business day, and alerts for life. That way, you won’t have to worry about missing filing dates. Visit our LegalZoom vs Incfile review for a comparison.
If this is all new to you, IncFile will provide you with a business checklist that you can use to navigate your way through the process. They also offer start-up guides and a list of requirements necessary for a business license. This transparent service helps you understand what is happening when your deadlines are, and when you can expect certain things to occur.
#3 Northwest Registered Agent: Offices In 50 States
Monthly Plans (State Fee Included)
Northwest R.A. Website
✔ Rates: LLC formations start $100 + state fee. Professional registered agent services provided in any state for just $125/year
✔ Sign-Up Process To Create An LLC: Enter your type of entity, the state you reside in and complete the form.
✔ Refund Policy: Completely refundable, expenses exempted.
Northwest Registered Agent prides itself on explaining things without jargon. They offer robust data security, complete privacy, and corporate guides. They endeavor to simplify business matters for everyone – this includes international business founders who wish to file paperwork to start a business based in the USA.
Northwest Pays State Fees Upfront!
Example of an LLC Formation In Georgia With Price Options
They can help you complete the paperwork you’re unfamiliar with, and help get your company rolling without administrative work tying up your time. They offer a beneficial service for both existing and new businesses to help form a corporation, non-profit, or LLC. They can even help with annual reporting duties. If Northwest Registered Agent is used to register a company, then you’ll get a year’s worth of registered agent service at no charge. Every service provided is separately priced, and they don’t offer any subscription plans. The benefit here is that you don’t need to pay for services that you won’t use.
The customer service offered by Northwest Registered Agent is excellent. They service those who reside in the USA, as well as international business owners who wish to have an American-based LLC opened up. The company’s customer support agents can be contacted by email or phone. On average, they reply to messages within one business day.
✔ Just $225 for a corporation or LLC formation including one-year registered agent services.
✔ A+ rating from BBB
✔ Registered agent services $125 (one year only).
✘ Can be a little pricey, but they are an industry leader
✘ The filing process is a little slower than the competition.
#4 Swyft Filings: Texas Company Providing Great Value
Swyft Filings Website
✔ Rates: Beginning at $49 + state filing fee
✔ Sign-Up Process To Create An LLC: Choose a plan, then pay for it. You’ll be ready to go from there!
✔ Refund Policy: Complete satisfaction guarantee.
Swyft Filings offers various legal services, and they do for lower rates than what lawyers charge. Their basic plan is just under $50 and includes Articles of Organization preparation, filing documentation with the Secretary of State, a free organizer statement, digital access to incorporation documentation, and customer support for life via email or phone.
Additionally, you get a half-hour consultation to go over your business taxes with a legal representative, as well as ComplianceGuard alerts for your company.
This remarkable service list would rip through your budget if you were to handle them through traditional means. There are plans available that include more advanced services, including the acquisition of a federal number (aka a tax ID), personalized operating agreements for your LLC, personalized ranking resolutions, digital state document delivery, a personalized digital corporation kit, and business website/web hosting packages for free.
✔ Expedited services are available.
✔ Satisfaction is 100% guaranteed.
✔ An LLC or corporation can be formed for just $49.
✘ The company hasn’t been around for very long (since 2012).
✘ Registered agent services aren’t included in the LLC formation packages.
#5 MyCorporation: 20 Years of Experience, Parent Deluxe Corporation
✔ Rates: Beginning at $99 + state filing fee
✔ Sign-Up Process To Create An LLC: Select a plan and fill in the required information.
✔ Refund Policy: There isn’t one.
Do you require some assistance filing your legal documentation?
Perhaps you are in the midst of planning the formation of your business and are learning about corporation types (and the benefits that come with them).
Whatever your process entails, My Corporation can help simplify and expedite things for you.
This company offers legal services that can accommodate all sorts of business needs, including the work involved with starting a company.
This may entail filing the necessary paperwork for stock certificates, sample minutes, bylaws, Articles of Incorporation, and more. They can even help you check to see if a company name is available.
My Corporation offers a number of unique features that may be beneficial to a business.
You will appreciate all of the secure storage space they provide you with to host sensitive documents online.
They will handle administrative work, such as coordinating business activities, updating contact info, and reporting yearly business locations.
An automatic renewal makes this vital task – tedious as it may be – one less headache to worry about.
My Corporation has a lot to offer emerging businesses, allowing business owners to focus on things that matter to them.
✔ More than two decades’ worth of experience and over 1 million customers served.
✔ Insightful suggestions for businesses that are new or are in the process of forming.
✔ BBB rating of A+.
✘ The basic plan doesn’t come with very much.
✘ The basic plan doesn’t include registered agent services.
#6 Rocket Lawyer: Our Favorite For Ongoing Legal Services Online
Rocket Lawyer Website ⇨
✔ Rates: Beginning at $39.99 monthly + state filing fee
✔ Sign-Up Process To Create An LLC: Select a plan, membership, or one-time formation package.
✔ Refund Policy: Free trial (seven days)
Rocket Lawyer ads a contemporary spin to traditional legal services. Rather than companies being overwhelmed by various legal requirements and matters, Rocket Lawyer provides a user-friendly and effective system that allows people to handle legal requirements by themselves. Whether that entails beginning an LLC, incorporating a company, or drafting business contracts that are legally binding (such as Release of Liability form or non-disclosure agreement). Rocket Lawyer endeavors to make things as simple as possible.
The best part is that you’ll be able to do each one of these things by yourself. There are a couple of benefits to this – to start with; you will obtain your documentation right away. Once you complete the information required, these documents get prepared on site. You’ll be able to download, print, or share them immediately. That is quite an impressive turnaround time. Secondly, you’ll wind up paying significantly less for these services through Rocket Lawyer than you would through traditional ways. Rocket Lawyer makes it easy to perform work using a modern approach.
✔ You’ll have legal protection courtesy of Document Defense.
✔ Reliable answers quickly from attorneys on-call.
✔ Instant creation of legal documents.
✘ DIY filing of legal documents.
✘ No lawyers or information are available.
#7 Inc Authority: Great Choice, Great Value
Inc Authority Website
✔ Starting Rates: $0 + state filing fee
✔ Sign-Up Process To Create An LLC: Choose the type of entity, the state you reside in, and complete the form.
✔ Refund Policy: Refundable (expenses exempted).
Inc. Authority can help set up an LLC or corporation for free. Their service includes a name check (five-point), entity formation paperwork prep (and subsequent filing) for your entity, registered agent services (free for the whole first year), secure digital storage to access your start-up documentation, digital delivery, checking accounts for your business, S-corp form 2553 (election form) preparation and subsequent IRS filing, customer support through phone and email, a consultation to plan your taxes, and analyses of business funding.
Inc. Authority does provide you with these services for free, and they do so as a gesture of good faith. You have the option to pay for other services they offer, including bylaw and operating agreement completion, company and record book seals, meeting minutes (as well as initial resolutions), certificates of ownership, an EIN (IRS tax number ID), a report for your business license, a tax consultation, domains for your website, a credit coach for your business, and registration with Dun and Bradstreet.
✔ Basic formation service for free.
✔ Top-notch customer service offered by an in-house staff of professionals.
✔ This small business services other small businesses.
✘ Free service is very limited, and the next level up gets pricey.
#8 Nolo: 48 Years of Legal Experience & Valuable Online Resource
✔ Rates: Beginning at $99 + state filing fee
✔ Sign-Up Process To Create An LLC: You’ll be matched with a suitable attorney once you explain your case.
✔ Refund Policy: None.
There are no shortages of legal service providers to choose from who can file your legal documents, check business names, and form an LLC on your behalf. Nolo ups the ante by connecting you with legal experts specializing in what your needs are. You will begin by describing your business situation (as well as your needs) to a professional. From there, you’ll be matched up by Nolo with a dedicated lawyer who will be able to work on your case. This company is adept at connecting companies with local lawyers who specialize in specific legalities.
Further, Nolo has a slew of educational tools and online resources you can access, which includes an extensive library of legal articles. Each one of them is written in English and comprehensively explains processes, legal requirements, and terms. As such, you can be educated and find out understand what is expected of you, sans the exorbitant fees lawyers normally charge.
✔ Almost 50 years of being a legal authority.
✔ Their network is comprised of 30,000 different local attorneys.
✔ DIY legal filing.
✘ Some might find the self-help aspect of these services a bit overwhelming.
✘ Formation services offered or not performed in-house.
#9 CorpNet: Great Choice, Great Value
✔ Rates: Beginning at $79 + state filing fee
✔ Sign-Up Process To Create An LLC: Pick your business structure and then choose your state.
✔ Refund Policy: Satisfaction completely guaranteed.
A group of small business entrepreneurs and advocates founded CorpNet, and that’s why many small businesses feel comfortable using them as the go-to provider of legal services. More than 500,000 small businesses started their companies with the assistance of CorpNet’s inexpensive and simple-to-understand guidance. Whether you wish to have an LLC formed, maintain your existing business, or incorporate one, CorpNet can bring these plans to fruition for you. You get upfront pricing, top-notch customer service, and a satisfaction guarantee.
Several services CorpNet provides include LLC formation, sole proprietorship DBA filing, and registration services with revenue departments in your state. One of CorpNet’s best features is their checklist new businesses can use, which tells them what they must know when launching a business. This includes getting a federal number for tax ID purposes.
✔ Proactive BizAlerts send filing and due date reminders.
✔ Secure, simple, mobile-friendly.
✔ On-site file storage.
✔ Document preparation is available 24/7.
✘ Some might find the self-help aspect of these services a bit overwhelming.
✘ Formation services offered or not performed in-house.
#10 LegalZoom: Pioneer In Online Legal Services
✔ Rates To Create An LLC: Prices begin at just under $100 + state filing fee. However, there are extra charges for various required services, which tend to add up. For instance, they charge $220 for expedited processing and $249 annually for registered agent service.
How To Form An LLC
9 Steps To Create An LLC
Step 1: Select a State
Step 2: Choose a Name For Your LLC
Step 3: Choose a Registered Agent
Step 4: Prepare An LLC Operating Agreement
Step 5: File Organizational Paperwork With the State
Step 6: Obtain a Certificate From the State
Step 7: Obtain an EIN (Employer Identification Number)
Step 8: Obtain a Business Bank Account
Step 9: Register To Do Business in the Other States (Optional)
What Is An LLC Operating Agreement?
An LLC Operating Agreement allows owners to structure working and financial relationships between co-owners so that it suits the business.
In an operating agreement, the co-owners should establish each owner’s ownership percentage share in the LLC, their share of profits, their responsibilities and rights, and how an owner leaving will be handled.
The ZenBusiness website explains it this way,
What is an operating agreement and why do I need one?An operating agreement is a document that protects the owner’s personal assets from the actions of the LLC, clearly outlines which actions are acceptable for the business, and creates a succession plan should the owner exit the business.You have full control over how to write your operating agreement, but it’s important to follow standard formats to ensure you protect your interests and support your company as it grows.
Additional benefits of an LLC operating agreement
Avoids some of the default rules of the state where you form your LLCWithout an operating agreement, your LLC will default to some of the standard rules and guidelines set by the state.
Helps secure funding from investors and lendersOperating agreements outline legal and financial details like decision-making authority and how funds are used that can be helpful when trying to secure funding for your business.
LLCs & FAQs
What is A Single-Member LLC?
Single-member LLCs are a viable alternative to establishing your business as a sole proprietorship.
Sole proprietors only work for themselves. As a result, there aren’t any rules or fees applicable to sole proprietorships, although there are a few requirements you need to consider if you want to start hiring employees. Since the proprietor and the business are legally considered to be the same, such a business structure could place the proprietor’s assets at risk in case the business falls into financial woes.
To counter this risk, you can set up a single-member LLC, of which you are the sole owner. This arrangement protects your personal assets in case the business goes bankrupt.
You can also add the ‘LLC’ term to the name of your business, protect your assets and limit your liabilities in case the business fails to make proper payments or has a lawsuit filed against it.
However, this arrangement is not without its disadvantages. You have to register your LLC with state authorities, ensure that your business complies with applicable laws and regulations, and pay the annual LLC registration fees as well.
How Do The Owners of a Single-Member LLC Get Paid?
Owners of single-member LLCs don’t draw a salary or get paid any wages. Instead, they are entitled to withdraw the money in the LLC’s account at their discretion.
It is called ‘Owner’s draw’. The owner of a single-member LLC can simply write a check for themselves or transfer money from their LLC’s account into their personal account. It’s that simple!
How Are Owners of a Single-Member LLC Taxed?
As per the IRS, a single-member LLC is treated similarly to a sole proprietorship by default. Your LLC is considered to be a ‘disregarded entity’ in the eyes of the IRS. The LLC is not required to pay any income tax. Instead, its profits & losses get passed on to the owner.
In simple terms, single-member LLC owners don’t need to file any extra federal tax returns. Since they’re the sole owner of the business, the total income earned by the LLC is treated as their income in their tax filings. However, your state might have different tax filing regulations for LLCs. Do go through your state’s laws regarding this subject.
However, owners can also opt for their LLC to get taxed like a corporation. In such cases, the owners are considered to be an employee. They can pay themselves through the LLC’s payroll if they choose to do so.
While this method will lower your self-employment taxes, you’ll also have to spend more time buried in paperwork during tax season. Therefore, we recommend that you consult your accountant to learn more about this route before you make a decision.
What Are Online Legal Services?
Online legal service platforms are modern alternatives to traditional law firms. Online legal service websites help you contact independent law practitioners who can provide you with legal services, should the need arise. In case you do not wish to engage the services of a personal attorney for your business requirements, these platforms can connect you with qualified experts who can send in your license applications, draft contracts, or submit important documents without charging the exorbitant fees or long-term commitment typically demanded by traditional law firms. These services are useful for people who run small businesses, although these platforms also provide services for handling personal legal issues.
How Much Does It Cost To Get An LLC Formed Online?
Online legal services tend to differ greatly in their pricing, which varies from plan to plan. Each plan comes with a defined set of legal services that can be customized as per one’s business requirements. For instance, plans that include registered agent services tend to be costlier than others. However, it is an important service that’s worth every penny as most businesses require registered agents to carry out their operations legally.
Plans that offer standard limited liability company legal services tend to cost anywhere between $80 to $150 plus the state fee. Incorporation formation plans are sometimes more expensive.
How Do Online Legal Services Work?
It’s a fairly simple process. Once you submit a form detailing the services that you require, a professional will be assigned to your case with whom you can discuss other important details. They will then research, complete & submit the documents on your behalf. Alternatively, they will also provide you with the necessary guidance and template forms if you’d like to handle it yourself. This process may vary depending on what services you’re hiring them for.
However, you will be able to minimize your costs and efforts by opting for online legal services, either by making use of step-by-step guidance for expediting the process by transferring the task to be handled by an expert.
What Services Do Legal Services Platforms Provide?
Most legal services platforms seek to fulfill the needs of emerging or small businesses. Their services include filing LLCs, filling permit applications, trademark registration, research into bylaws, and drafting contracts.
However, other online legal services platforms also offer support with personal legal issues. They can connect you to experts specializing in subjects like living wills, power of attorney, immigration issues, and mortgage agreements.
LLC vs. Corporation
What Is an S Corp, C Corp, and LLC?
Among the first decisions that an entrepreneur has to make is whether to start an LLC or a C Corp. You may have heard about an S Corporation as well, although it isn’t really a separate business type. If you’re looking for information about these business entities, here’s all you need to know:
Business owners often prefer a limited liability company structure since it insulates them from financial downturns in the business while also providing them with flexibility regarding management and taxation. An LLC may be taxed as a multi-proprietorship or a sole-proprietorship; however, business owners are exempt from corporate tax, which allows them to safeguard their personal banking accounts. LLC owners are considered to be self-employed individuals and pay taxes accordingly. However, they are not allowed to issue stocks. Their businesses aren’t eligible for international recognition either. They don’t need to pay double tax, meaning that the CEO only has to shell out for personal taxes – an arrangement that helps them skip complicated paperwork and save precious time.
A corporation happens to be a company that’s also a separate legal entity. The ownership lies with the shareholders, who may either be the founders or other individual investors. It is similar to an LLC in that the business is completely separate from the shareholders’ personal assets and personal liabilities. However, shareholders are subject to double taxation since C Corporations are taxed as separate entities. This means the income gets taxed at both the organizational and investor level. This structure enables businesses to make money or develop international partnerships with the help of investor funds. A corporation needs to have a Board of Directors. They also have more reporting and bookkeeping requirements compared to LLCs.
Small business corporations aren’t actually a separate business type – it only exists for tax classification purposes of the IRS. While businesses are officially either C Corporations or LLCs, some of them may also be eligible for S Corporation status. To qualify for this, it needs to be a US-based business, has less than one hundred members, and has only a single class of shareholders. In S Corporations, taxes need not be paid on the profits, thus preventing double taxation that is applicable for C Corporation shareholders. Taxation only takes place at the individual level. Reporting requirements are also less stringent compared to traditional C Corporations. However, S Corporations are also subject to extra scrutiny from IRS authorities and might not be great for firms looking to attract venture capitalists.
What’s the Best Legal Services Platform for Your Needs?
Firstly, you need to make a decision about how involved you would like to be in the legal affairs of your company. Some platforms provide templates and legal forms that you can fill out on your own. They will also give you the necessary guidance, instructions, and edits needed for the documents to be approved.
Other legal services will handle the documentation part completely for you. For more important projects and for those requiring extensive field research, like copyright and patent filing, we recommend going for providers who are specialists in their respective fields and aware of the intricacies related to the subject at hand. People launching a business for the first time should seek experts who have a strong understanding of taxation, licensing, local, and state laws.
Additionally, you must also ensure that the legal service provider you hire is trustworthy. Regardless of your needs, there’s a high chance that you will be sharing highly sensitive information regarding your business. It is important to check out the provider’s reputation and reviews. If the company’s website has a professional design, includes legitimate contact information, and has a strong social media presence, it is a sign that it’s a genuine legal service provider.
Is A Legal Services Platform Right for Your Business?
Firstly, legal services sites can help you launch your business properly without making any errors. Legal procedures for activities like LLC formation, permit and license applications, and research into bylaws are all complicated. Legal service sites can help you overcome many hassles that normally stall the entire process and distract your attention from the plan. They can help you avoid accidental legal violations and fines. They are also more affordable compared to personal attorneys and will take care of all legal documentation requirements, thus helping you focus solely on your business and your vision for it.
How to Protect Your Personal Finances From Business Risks
According to author and attorney Mark Kohler, a writer with Entrepreneur.com, there are some important steps business owners can take to protect personal assets from business risk.
(Please keep in mind, our website does not give legal advice, we are paraphrasing an article from the online magazine Entrepreneur.)
Many small business owners are woefully unaware of how they can protect their personal wealth. Most of them fall prey to expensive asset protection policies, which have a poor track record in delivering when they’re required. Others simply purchase more insurance and hope that they’ll never run into an accident or a lawsuit.
Asset protection deals with protecting the business owner’s personal assets from being exposed to their business liabilities, something that’s dangerous for both the business and its owner.
Mr. Kohler recalled in his article a recent case of his where he had a small business owner client who called him and was worried because one of his customers had fallen down while entering his office and broken his arm in the process. However, he had been prepared for such scenarios beforehand, which helped him avoid being sued for personal liability. Had he not opted for such strategies, he could have lost his house or other personal assets in the resulting lawsuit.
Here are 4 strategies Mark Kohler suggested business owners use for protecting their personal wealth in case their business is required to pay damages that threaten to bankrupt it:
- Adopt the right business structure
While sole proprietorships may make sense when you start out, it isn’t the best way to go if you want to protect your personal assets from your business liabilities. A sole proprietorship structure means that the owner’s personal assets and wealth, like his properties, investments, and the house may be used for paying off business liabilities.
Using a limited liability company or LLC structure will give you ample protection in case a lawsuit gets filed against you. For instance, my client’s business structure had two layers to it. The business was operated as a corporation with the building being held by an LLC. As a result, the corporation became the business named in the lawsuit and the LLC became the entity that owned it. Since there were 2 entities, the customer couldn’t file a suit against my client’s personal assets.
- Keep your personal and business finances separate
Although you may have set your business up as a separate entity, the documentation alone will not suffice to rescue you from potential lawsuits. Your business must also have a separate bank account. Important documents should only use their name and the properties should be registered in the company’s name. Additionally, you should also maintain annual minutes in your corporate book.
Don’t think that filing the LLC’s Articles of Association on the official website or via an online incorporation service is all you have to do. You must also possess the documents specified for your business entity structure and follow all applicable annual maintenance procedures. You should hold meetings, maintain minutes, and pay prescribed fees as well. For instance, my client had rock-solid company documents, which confirmed that they were complying with all internal and state regulations. This helped us remove the need to create paperwork from scratch.
- Maintain proof that you are a credible business owner
Creditors are notorious for attacking the personal assets of business owners when they are found to have acted fraudulently or negligently. For example, having documents to prove that the business had a snow & ice removal procedure in place and that there were adequate warnings about the entrance being slippery, posted for the benefit of his customers. If you prove that you took all steps to ensure your customers weren’t affected adversely, the judge might be inclined to rule in your favor.
- Purchase the right amount of insurance
Don’t go for asset protection policies, especially if they recommend hiding your assets or using an entity to avoid insurance payments. A business cannot survive for long without insurance coverage, which is an expense that must be accounted for from the beginning. It ensures that your personal assets are never in danger of having to compensate for issues related to your business.
Ensure you purchase the right insurance policy. The best insurance policy for you may differ depending on what you own – a retail store, professional practice, or a rental property. For example, someone having two insurance providers – one for his business and the other for his building. Always have a comprehensive annual review done with your insurance agent and ask him to give his recommendations for the best policies and options that could work in your favor.
Although these were very simple examples, the message is quite clear. The steps mentioned here to protect one’s assets were affordable, straightforward, and simple. It’s probably a good idea to implement these steps at the earliest and consult a licensed attorney with a specialization in business planning and asset protection. This will ensure that your personal financial assets are not targeted in case your business goes south.
How to Protect Your Assets…, Investopedia
What Are The Best States To Form An LLC?
In general terms, most people will find the best state to form an LLC is in the state that they reside in, and for most people, this is the state that they plan for your business to be based in. This is called a Domestic LLC. If you form an LLC outside of your home state, this is known as a Foreign LLC and requires you to file as a Foreign LLC.
A popular state to incorporate in is Delaware. Delaware is best suited for corporations that need to sell shares and have access to capital markets. If you live in Delaware or you have plans to start a business in Delaware, forming an LLC in Delaware is an attractive option.
Talk with the folks at ZenBusiness, Incfile, or Inc Authority for more information on these topics. They will be glad to answer any question that you might have.
Visit them online today.
Information on three more formation services can be found on our article Stripe Atlas vs Clerky vs Gust Launch.
Note: The information on our website is for general information and educational purposes only. Tax rules and laws often change regarding the location and industry of a business. Top 10 LLC Formation Sites does not offer legal or tax advice. We recommend you find a licensed tax or law professional for assistance on these topics.
Note: The LLC formation services listed on our website are not law firms. They are document filing services.
For more information on business formations visit these articles,