I'm interested in incorporating (I live in VA) and I got a quote of about $400 from my accountant. I've done some research and the forms for articles of inc. and obtaining a federal tax-id # look pretty straightforward.

Do you think its wise for me to do this by myself, or should I let my accountant do it? Also, does anyone have any experience doing it online? MyCorporation.com looks fairly cheap.

I've done some research and the forms for articles of inc. and obtaining a federal tax-id # look pretty straightforward. Yeah, they are. You could certainly do them yourself, and pay just whatever fee the state charges for incorporation. The EIN you can actually get over the phone.

So if your accountant was going to charge you $400 just to file those documents you can certainly save by doing it yourself. But it's still probably a good idea to have some conversation with him about setting up your accounting, etc., and perhaps with a lawyer. Personally, I wouldn't bother using mycorporation.com or any other online incorporation service, because I don't see them really doing anything in the way of personal service or anything I couldn't easily do myself -- basically you pay them to file documents that you fill out for them, and they typically include things you don't need; like charging for being your registered agent (which you probably don't need), or for a "corporate kit" of documents that you could get at a legal stationary store or might not even need.

But consulting with someone locally can have real value.

If you have the head for it and the time to do the research -- and the willingness to risk that you'll mess something up -- you can do it all on your own. I just wouldn't recommend it to everybody!

But I really wanted that custom corporate seal/embosser :D

Seriously tho, thanks for the advice. I had heard how easy it was to get an EIN but I didn't know you could get it over the phone. Gotta love how easy the IRS makes it so they can start taking away your money :)
Wait a minute - that sad :(

Originally posted by MadSkilage
But I really wanted that custom corporate seal/embosser :D Oh, of course, who wouldn't? But that's the point, you can buy it cheaper elsewhere! Seriously, that's a good example: generally they at best imply that you need that, if not just say that you do, regardless of where you are. I don't remember which of those sites I was on last year that said it's necessary for New York, but it's not and hasn't been for at least few years.

The EIN by phone deal has evolved over time. For a while you could fax your application in, so that was an improvement over mailing it. Then they changed it so you can call and get the number immediately, and you had to fax the form in afterwards. Then they stopped requiring the fax, so now you make the call and you're done. They still recommend you get the form and fill it out so you can just read the answers to them on the phone. My advice regardless of whether you do that is to call early, right after they open which is either 8 or 830 eastern. Best bet is to start calling a minute or so before, and keep dialing fast!

I don't know Virginia law, but in South Carolina we had to have it done through a lawyer. In SC the state dictates that you can't do it yourself. Needless to say I didn't like that, but I searched around until I found some guy who did it for $400 ($300 of which went to the state). The first couple of lawyers wanted $750 and $900. We sat in the waiting room longer than the whole process took. Even if there was some way around having to have the lawyer do it, it was worth the extra $100 to make sure it was done right.

Oh yeah, just buy the seal/embosser yourself, they come in kits with the rest of the books and stock.

Good Luck

In Texas I submitted a one page form to the state and a $200 check. Less than 2 weeks later I received my official LLC papers in the mail.

Find a good accountant to do it, they'll charge you a hundred or so more than the fees but you get everything doen for you, done correctly, hopefully a tax id number, a seal, booklets, and other cool things. (trust me, the seal is worth a hundred bucks)

Originally posted by TedS
trust me, the seal is worth a hundred bucks Why? In many states you don't need one at all, and if you do you can buy one for about 25 bucks from any place that sells rubber stamps and check endorsers and such.

In Texas I submitted a one page form to the state and a $200 check. Less than 2 weeks later I received my official LLC papers in the mail.

I agree, It was a straight forward process.

Registered agents are particularly handy if you register your business in another state other than your home state (ie delaware). They usually also provide a mail forwarding service.

Why would you want to do this TAXES TAXES TAXES, why do you want to pay your home state income tax on your business when you could just register it in delaware and pay no income tax.

Delaware = No Bus income tax + 80 a year registration fee, then state personal income tax (if your state has one) = Federal

Most other states = Bus. Income tax, registration fee (100-300), then personal income tax + Federal

Most states have now changed their laws to make them more competitive with Delaware. Note that Texas has no personal income tax and that a small LLC's is taxed just as a sole proprietorship would be. Plus, Texas charges a "foreign corporation" fee of $700 to do business in Texas if registered in Delaware or another state (many other states do, too).


Where Delaware holds a true advantage is in the court system. This is why many large corporations choose to incorporate there:

The state of Delaware purposefully seeks to entice corporations to incorporate under its laws by maintaining an especially efficient system of courts that exclusively handles corporate matters. Because so many corporations are organized under Delaware laws, the Delaware Corporate Code has been litigated extensively. Because of the extensive amount of case law interpreting the Delaware Corporate Code, outcomes of lawsuits often are easier to predict in Delaware, so many business operators now feel more comfortable knowing that corporate

Originally posted by adland II
Where Delaware holds a true advantage is in the court system. This is why many large corporations choose to incorporate there:
Yep... in fact many people now feel that both Nevada and Wyoming are more favorable for small business incorporations than Delaware. No corporate income tax, favorable environments for keeping ownership "discreet," etc.

The foreign corporation fee charged by your home state is often forgotten by people considering incorporating elsewhere. It makes little difference to large corporations, but you should consider whether it doesn't offset any tax advantage that might be gained. Also remember that even if you put the corporation in a place where it's profits aren't taxed, that doesn't mean that money that comes out of the corporation to you isn't taxed -- you still live where you live and will have to pay that state's income tax on any money you pay yourself whether through wages, dividends, or any other distribution.

Originally posted by JayC
Yeah, they are. You could certainly do them yourself, and pay just whatever fee the state charges for incorporation. The EIN you can actually get over the phone.

So if your accountant was going to charge you $400 just to file those documents you can certainly save by doing it yourself. But it's still probably a good idea to have some conversation with him about setting up your accounting, etc., and perhaps with a lawyer. Personally, I wouldn't bother using mycorporation.com or any other online incorporation service, because I don't see them really doing anything in the way of personal service or anything I couldn't easily do myself -- basically you pay them to file documents that you fill out for them, and they typically include things you don't need; like charging for being your registered agent (which you probably don't need), or for a "corporate kit" of documents that you could get at a legal stationary store or might not even need.

But consulting with someone locally can have real value.

If you have the head for it and the time to do the research -- and the willingness to risk that you'll mess something up -- you can do it all on your own. I just wouldn't recommend it to everybody!

If you go through some sort of service that handles the paperwork for you, gives you your corporate kit+seal, registered agent service, it's going to cost you the same. Most would find this easier.

If you want to inc. yourself, you should go to Ask.com and find you state's Secratary of Stateand search for documents and find the Articles of Incorporation. It was easy for the State of Ohio, took about three weeks from start until I got the reply.

Secretary of State

Hrm... You're saying we give SoS Colin Powell a message? ;)

You do mean the Department of State. heh.

Nope, Secretary of State:

http://www.sos.state.tx.us/corp/index.shtml

Originally posted by progex
Hrm... You're saying we give SoS Colin Powell a message? ;)

You do mean the Department of State. heh. Colin Powell is the executive who heads the US Department of State, or State Department.

Each individual state also (possibly there are some exceptions in a couple of oddball states, but generally they all use the same structure) has a Department of State, which is headed by a Secretary of State. That's the department, and the executive, in charge of incorporations.

Contact your state's Secretary of State, not the US Secretary of State.

I incorporated in VA myself without any problems. I just filled out the articles of incorporation, included a check for $75, and got my incorporation notice about 1 week later.

Really? I thought the fee for incorporation in VA was $100 bucks.

Here's all the Secretary of States and their web pages:

http://www.nass.org/sos/sosflags.html

Here's the web site for the Virginia Secretary of State:

http://www.soc.state.va.us/ (good looking woman :rolleyes: )

Course I'm thinking of an LLC - probably different fees based for different types of entities.

4solutions - she's definitely a hottie ;)

Better Link for Virginia Corporation info:

http://www.state.va.us/scc/division/clk/fee_dom_corp.htm

The Articles of Incorporation can be downloaded here:

http://www.state.va.us/cgi-bin/scc-clerkdl.pl?scc544&Articles_of_Incorporation_-_Professional_Corporation

The fees are contingent on the number of shares. Basically, from what I can tell, the filing fees are $75 for up to 25,000 shares.

But, if you don't know taxes, you have to decide rather rapidly, whether you want to be a C coporation, or an S corporation.

The filing fee for the Articles of Organization for an LLC are $100. Something to look into. If Virginia allows one person LLC's then, as I understand it, your income will just flow through to your schedule C on your IRS form 1040.

Originally posted by 4solutions
If Virginia allows one person LLC's then, as I understand it, your income will just flow through to your schedule C on your IRS form 1040.

Yup, although as an LLC, you can elect corporate tax treatment if you think it would benefit your company so you may have to file a corporate tax return. BTW, VA does allow one-person LLC's.

Originally posted by MadSkilage
Really? I thought the fee for incorporation in VA was $100 bucks.

it depends on the number of shares you issue. it started at $50 when i incorporated.

Here's a Nolo Press short article on business structures (http://www.nolo.com/lawcenter/ency/article.cfm/objectID/6294EA66-70E7-4562-81AC734B34CAD352/catID/5DE04E60-45BB-4108-8D757E247F35B8AB)

I also highly recommend books from Nolo Press. When I lived in Texas, I must have formed close to 90 corporations using one of their books... never had any problems with the paperwork. (That's when the economy was really going crazy there in the early 80's)

I notice that Nolo also has several books & software for forming your own LLC

here (http://www.nolo.com/lawcenter/ency/article.cfm/objectID/FC4734C6-FE8E-4D5C-BFE5E43131AEBA1F/catID/BAAE1B67-F54A-41B4-91943A51F56C3F79)


Best of Luck...

Hey 4Solutions that site already answered some of the questions I had. :)

All I know is that it costs a ton of money to get a LLC in NYS. I think mycorp quoted me like $370.

Originally posted by teck
All I know is that it costs a ton of money to get a LLC in NYS. I think mycorp quoted me like $370. The filing fee for an LLC in New York is $200, so the extra $170 would go to mycorp and is what you'd save if you did your own filing.

For comparison, the filing fee for forming a corporation in NY is $125.

I'm reading this, and getting 100% lost. Could someone tell me the reasons why I would want to get an LLC in Delaware as opposed to Minnesota, where I live? I don't understand this...

Doing business in Minnesota? I'm doing it online, am I not? *sigh*... I should have taken Accounting when I had the chance...

- James

Originally posted by zRedDice
I should have taken Accounting when I had the chance...But of course... ;)

But don't despair zRedDice, read this very short answer:

http://www.nolo.com/lawcenter/auntie/questions.cfm/objectID/337D5285-8011-4B09-A998089A04E631AE/catID/B491956E-A152-424B-A2342A5861B5EACF

Basically, it's all a matter of nexus. That is, if you incorporate, or form an LLC in another state like Delaware or Nevada, it all looks great on paper until you realize that, "Hey, wait a minute, I live in Minnesota."

The fact that you are the principal chief cook, bottle washer, and webmaster for the company pretty much establishes nexus for your company in Minnesota. Therefore, legally you will have to not only pay the yearly fees for, say, Nevada or Delaware that you incorporate in, but also have to pay the fees for a foreign entity in your home state (whatever they are in Minnesota).

However, surprisingly enough, there really are still many reasons to incorporate in Nevada (much better than Delaware) if you have the extra money to spend (not much of that around WHT). This is because Nevada has some of the strongest laws to protect corporate directors and officers from lawsuit liability. Nevada is also one of the few states to allow bearer stock (whoever has it, owns it - lets see the ex track that down). And Nevada is the only state whose Secretary of State has publicly refused to share information with the IRS. (<--Gotta love his gumption even though most of the info is available anyway on the web). In addition, because of the strong laws in Nevada protecting directors and officers, many companies will provide you with figurehead directors and officers for a reasonable price that make it almost impossible to know that you own, or have any connection with, your company. Of course, there is no corporate income tax, although modest annual fees apply.

So to sum it up, you might want to consider filing in Nevada if you want extra protection for yourself and your fellow directors/officers and/or you are interested in more privacy in who knows that you own the company (although it is tough to be incognito when you are also answering the phone).

There are some other tricks you can do with Nevada coporations and entities, but my former employer, the IRS would skin me alive if I told...

? and what about Wyoming ?

They seem to have more advantages according to:

http://www.companiesinc.com/sidebyside.html

Originally posted by Dylan
? and what about Wyoming ?

They seem to have more advantages according to:

http://www.companiesinc.com/sidebyside.html Looks like there are some minor differences. But, I don't know personally of the advantages so I leave that to you, Dylan, to enlighten us with.

I have recent experience with Nevada corporations and entites and therefore, I will limit my recommendation to that.

Originally posted by 4solutions
Looks like there are some minor differences. But, I don't know personally of the advantages so I leave that to you, Dylan, to enlighten us with.

I have recent experience with Nevada corporations and entites and therefore, I will limit my recommendation to that.

I've being looking for over a year now for a good and cheap company through whom I can inc my co - in NV of course - but have had no such luck yet.

I need them to do everything for me, ie. like valisinternational. Unfort valis only does DE.

Whom do you recommend?


With regards to WY, I know nothing about WY. I was just asking and throwing in some more options for observers...

We were going to form our LLC online but in the end decided against it after our investors wanted us to go through a lawyer. I will say that going through the lawyer made the entire process very easy and it was nice to be able to get legal advice on the pros and cons of the different structures. And in the entire scheme of things it wasn't very costly to have the lawyer write up the articles of organization.... the operating agreement on the other hand was a different story. In short, if you want to setup a serious company take the extra effort and spend the cash to have your lawyer setup the company for you and write an operating agreement for you in conjunction with your CPA. It will save a lot of headaches later on.

Greg

Originally posted by 4solutions
The fact that you are the principal chief cook, bottle washer, and webmaster for the company pretty much establishes nexus for your company in Minnesota. Therefore, legally you will have to not only pay the yearly fees for, say, Nevada or Delaware that you incorporate in, but also have to pay the fees for a foreign entity in your home state (whatever they are in Minnesota).And if your home state has a corporate income tax, your corporation will probably have to pay state taxes on income you made through operations in your home state. Which may well be all of your operations, even if you are on paper incorporated somewhere else. If you have no physical presence in the state you've incorporated in, it's hard to prove that your operations took place anywhere but at home.

Note that big corporations that incorporate in places like Delaware typically also maintain offices there.

Originally posted by eclipsewebs
I don't know Virginia law, but in South Carolina we had to have it done through a lawyer. In SC the state dictates that you can't do it yourself. Needless to say I didn't like that, but I searched around until I found some guy who did it for $400 ($300 of which went to the state). The first couple of lawyers wanted $750 and $900. We sat in the waiting room longer than the whole process took. Even if there was some way around having to have the lawyer do it, it was worth the extra $100 to make sure it was done right.

Oh yeah, just buy the seal/embosser yourself, they come in kits with the rest of the books and stock.

Good Luck

It was $110 when I did it, not $300.

http://www.scsos.com/fees.htm#LLC