• February 2019
    M T W T F S S
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I don’t have money for private attorneys to incorporate. What is the most cost effective resource to help with incorporation (Legalzoom, Rocket Lawyer, etc.)? What is the best state to form an anonymous corporation (LLC) in small startups?

I gotta agree with Mike Emeigh on this one – typically the best state to form an LLC is where you’re conducting business from/in. However, there are still advantages to incorporate in Delaware even if you aren’t seeking investors:

  • Members or managers of an LLC aren’t required to be Delaware residents.
  • When you form an LLC, you can choose whether you want the entity to be taxed as a partnership, S corporation, C corporation or sole proprietorship. Single-member LLC’s pay no taxes as the tax liability passes through to the members.
  • There are minimal information requirements to form an LLC and it involves a small filing fee. As an added plus, there are no meetings or voting requirements.
  • It’s affordable (and relatively painless) to maintain an LLC in Delaware. Once a year you’re required to fill out a form and pay an annual franchise tax of $300 with the Registered Agent Fee.
  • Unlike some states, you are not required to disclose information about the owners of the LLC.

Regarding the most cost-effective route – you can try forming on your own. Each state has the required forms available for creating an LLC or corporation. Fill out the forms, pay the filing fee’s and you’re done. Seems easy enough right? Unfortunately mistakes are made all the time by entrepreneurs trying to serve as their own general counsels. Not only is it possible to mess up the paperwork, but it’s so important to consult with an attorney beforehand. An attorney is the most suited person to confirm that an LLC is the best entity for your company, and whether your home state is indeed the most advantageous for you to set up in.

A few years back I created LawTrades after hearing many entrepreneurs say the same thing you’re saying now – “I don’t have money for private attorneys.” Our company is well aware that bootstrapped startups simply can’t afford the obnoxious pricing that comes along with traditional law firms. That’s why our company offers affordable incorporation packages, yet still completed by experienced startup attorneys. Check us out and good luck!

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