Incorporating...

**RyanAmos** · 07-06-2006, 01:44 AM

I know there is a thread already about if you are incorporated but...

What's the best way to go about incorporating? Do I need to go through a lawyer? What will it cost me?

I've looked into www.mycorporation.com a while back but they charge a heafty fee here (Ohio).

What's the best way to go about this? Anyone have any help to offer?

**Hoang** · 07-06-2006, 02:07 AM

Check out http://www.legalzoom.com

Their prices aren't so bad, they have an awesome site too.

**Bryan Le** · 07-06-2006, 02:30 AM

I'd like to recommend Legal Zoom also...but if you want to do it the hard and more expensive way...I'd do it in Delaware.

Its a better investment in the long run because of the taxes you'll save in Delaware (is that how you spell it? Looks so wierd...)

**RyanAmos** · 07-06-2006, 02:32 AM

Delaware is cheaper than Ohio... So is there a reason why you say more expensive way? Do I need a PO box there or something along those lines if I did go that route?

**Samir** · 07-06-2006, 02:53 AM

I would suggest a local attorney that you trust. Remember, when something does go wrong, you'll need one of these anyways to defend yourself in court.

And an attorney is going to be more comfortable and confident defending a document he prepared himself.

**ltn1dr** · 07-06-2006, 07:48 AM

I wouldn't recommend/suggest any of the things mentioned above.

I filed my own company by hand to the State Corporate Commission for a grand total of $140, and thats counting $40 worth of books I bought from Amazon.

Just call your State Corporate Commission office of the clerk and ask all your questions lol

**miketheinternet** · 07-06-2006, 05:52 PM

Quote:

Originally Posted by ltn1dr

I wouldn't recommend/suggest any of the things mentioned above.

I filed my own company by hand to the State Corporate Commission for a grand total of $140, and thats counting $40 worth of books I bought from Amazon.

Just call your State Corporate Commission office of the clerk and ask all your questions lol

I have done this twice. Once on bizfilings.com for less than $200, and once with the lawyer.

The online companies do help you file with the state which is actually pretty easy to do,(at least in Colorado)

What they don't do is really set up your corporation with a 'corporate veil' which is usually why you are incorporating in the first place. There really has to be a set of documents kept and certain things maintained in order to keep the protection that you would want and need from a corporation. Only a lawyer can really make sure everything is in place

**ltn1dr** · 07-06-2006, 10:30 PM

Quote:

Originally Posted by miketheinternet

I have done this twice. Once on bizfilings.com for less than $200, and once with the lawyer.

The online companies do help you file with the state which is actually pretty easy to do,(at least in Colorado)

What they don't do is really set up your corporation with a 'corporate veil' which is usually why you are incorporating in the first place. There really has to be a set of documents kept and certain things maintained in order to keep the protection that you would want and need from a corporation. Only a lawyer can really make sure everything is in place

Or, as I mentioned is buy a good book from Amazon.com for $25. There's a nice series out there for each individual state, its called like How to File An LLC in (your state here)

Included are all the forums for your given state and how it should be run. Then you just buy a corporate outfit with a customized binder, customized stock certificates and a customized seal + minutes keeper and your set, sort of.

I think learning is a much better alternative than spending money on lawyers (I don't really like lawyers too much

)

**RyanAmos** · 07-06-2006, 10:33 PM

Quote:

Originally Posted by ltn1dr

I think learning is a much better alternative than spending money on lawyers (I don't really like lawyers too much

)

Better to have them on your side than the other guy's.

**ltn1dr** · 07-06-2006, 11:02 PM

Quote:

Originally Posted by RyanAmos

Better to have them on your side than the other guy's.

Lol, or better to have the more-expensive one on your side :taz:

**mariner** · 07-07-2006, 11:41 AM

I'd really suggest talking to both a CPA and a lawyer. I'v read some awful stories about legalzoom. Other such companies probably aren't any better.

Starting a business is one place where its not worth it to cut corners.

**imported_907Group** · 07-07-2006, 01:21 PM

Quote:

Originally Posted by ltn1dr

Lol, or better to have the more-expensive one on your side :taz:

lol.. always need a good lawyer

**Atomm** · 07-07-2006, 02:41 PM

At one time, I formed a LLC. We hired the CPA that one of my partners used for their own taxes. He did all the paperwork and submitted everything to the state. Then, he left us to our own devices to come up with the rest of the documents. For this, he charged $600.

My father formed a Corporation. He used a Tax Lawyer. The lawyer took care of all the paperwork, submitted it to the state, prepared his minutes and all documents required including the charter, etc. For this, he charged $600.

I learned a lot from that lesson. Never go with the first guy who says he can get the job done. ;-)

As for incorporating, there is a lot to it actually. As I like Audio Books I can listen to on my Ipod, I picked up Rich Dad's Advisors: Own Your Own Corporation and listened to it back and forth to work.

It is rather dry and rather boring material. However, it was waaaaaaay better than reading it and there is a lot to understand about being a corporation. For example, someone suggested Delaware. This book suggested Nevada for smaller businesses and Delaware for larger Corporations. Also, California has huge yearly fee's for LLC's. Something like $800 a year versus $50 for Nevada.

There are two types of corporations. A "C" Corp and a "S" corp. Each one has it's advantages and disadvantages. Even more interesting is the way each one handles their taxes. One has a fall through clause similiar to an LLC and the other only pays taxes on the money in the bank at the end of the fiscal year. Even more interesting, you can start out as one type of corporation and move the other type. I just can't remember if it's C to S or the other way around. However, you can not do the reverse. IE C to S, but not S to C. Look this up to be sure which way it works.

I am no expert, but I am a lot smarter than I was before I listened to that Audiobook. I may even pick up the book as a reference guide so I can find the info that I can't seem to keep straight.

**ltn1dr** · 07-07-2006, 04:30 PM

Quote:

Originally Posted by Atomm

At one time, I formed a LLC. We hired the CPA that one of my partners used for their own taxes. He did all the paperwork and submitted everything to the state. Then, he left us to our own devices to come up with the rest of the documents. For this, he charged $600.

My father formed a Corporation. He used a Tax Lawyer. The lawyer took care of all the paperwork, submitted it to the state, prepared his minutes and all documents required including the charter, etc. For this, he charged $600.

I learned a lot from that lesson. Never go with the first guy who says he can get the job done. ;-)

As for incorporating, there is a lot to it actually. As I like Audio Books I can listen to on my Ipod, I picked up Rich Dad's Advisors: Own Your Own Corporation and listened to it back and forth to work.

It is rather dry and rather boring material. However, it was waaaaaaay better than reading it and there is a lot to understand about being a corporation. For example, someone suggested Delaware. This book suggested Nevada for smaller businesses and Delaware for larger Corporations. Also, California has huge yearly fee's for LLC's. Something like $800 a year versus $50 for Nevada.

There are two types of corporations. A "C" Corp and a "S" corp. Each one has it's advantages and disadvantages. Even more interesting is the way each one handles their taxes. One has a fall through clause similiar to an LLC and the other only pays taxes on the money in the bank at the end of the fiscal year. Even more interesting, you can start out as one type of corporation and move the other type. I just can't remember if it's C to S or the other way around. However, you can not do the reverse. IE C to S, but not S to C. Look this up to be sure which way it works.

I am no expert, but I am a lot smarter than I was before I listened to that Audiobook. I may even pick up the book as a reference guide so I can find the info that I can't seem to keep straight.

I gotta listen to that audiobook, everyones been talking about it lately lol

**phaithful** · 07-07-2006, 04:39 PM

should one incorporate before making any money or incorporate after they've earned $X amount?

**Atomm** · 07-07-2006, 05:03 PM

ltn1dr,

Keep in mind, Rich Dad, Poor Dad is a whole series. That just happens to be one in the series. I have two others and may get one or two more in the series. I've heard at a certain point it starts to be repetitive.

**ltn1dr** · 07-07-2006, 06:16 PM

Quote:

Originally Posted by phaithful

should one incorporate before making any money or incorporate after they've earned $X amount?

Incorpoate whenever you have a business.

**Atomm** · 07-08-2006, 10:42 AM

phaithful,

This comes down to do what is right for you. I know that sounds crazy, but I disagree with ltn1dr. There are different reasons for incorporating or even for how you structure your business.

I know you guys are going to get sick of me saying this, but Rich Dad's Advisors: Own Your Own Corporation explains everything you need to help you make that decision. If nothing else, you will know more about business structures than before you listened to it.

**tdaddycarlos** · 07-08-2006, 03:47 PM

Well, I really don't think it can HURT you to incorporate/form a company, etc.

The most you'll lose is like the $100+ filing fee and a little time.

**Atomm** · 07-08-2006, 04:53 PM

Carlos,

That's like saying I don't think it will hurt you to try to fly a plane even though you don't know what you are doing. You can get yourself in a lot of trouble if you incorporate and do it incorrectly.

From tax liability to loosing the Veil of Corporate Protection.

Take it from someone who made the mistake of doing this without understanding what I was doing and how to do it. Folks, this is serious stuff. I suggest you do some investigation to get a basic understanding, then talk to a good Lawyer. If you are making money, it's not worth messing this up. My mistake has made a lot wiser than I was 5 years ago.