A lot of people think that they can form a company on their own. The truth is, there are many laws in place to ensure that you don’t start up the wrong type of company and get into legal trouble. If you’re writing your own articles for this blog post, make sure you tell readers why it’s important to get help from an experienced attorney when forming their business.
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Why do people assume that they can form a company themselves?
There are several reasons why people believe that forming your own business is simple:
1) You were able to create a Facebook page or Twitter account for your business, so you think you can start up a real business.
2) It’s easy to find information online about how to form a business.
3) You were able to start up a website on Wix, Weebly or one of the thousands of other free website creation websites so you should be able to use their templates for your corporate documents.
4) You’re not going to have any employees so you don’t need an operating agreement or employee handbook.
5) You don’t have a lot of money, so you’ll just do things yourself (i.e. right click save as template).
6) State filing fees for business formation are affordable and easy to find online with one quick search.
7) Your friends did it, so why can’t you?
MOST PEOPLE DON’T KNOW THE LINGO – YOU WON’T MAKE A MISTAKE
Oh, if it were only that easy. While you might be able to get away with some of these things on your own, others will cost you dearly if done incorrectly. For example, there’s a whole host of mistakes people make when hiring a lawyer for their business. There are also inefficiencies and risks in handling your own state filing when a more systematic approach could save you a lot of headaches.
But it’s even worse than that. The biggest problem with DIY is that many people don’t know the right questions to ask – so they get what they’ve paid for: the wrong thing.
One of the most important things to remember is that there are no legal shortcuts for incorporating a business, even if you’re doing it yourself. You have to follow the rules and be aware of how state-specific they can be. There may also be timing guidelines: in California, for example, your Articles of Incorporation will probably be approved within 15 days, and if you don’t get them registered then within another 30 days your corporation will be dissolved.
You have to make sure that your name is available: in some states, this can take up to 120 days. And state filing fees are not cheap – especially when there’s a rush job… especially on something as complex as an international patent. If you’re looking to go offshore, you can’t just pop into the nearest government office and register your company. In countries like Belize or the Bahamas, things are handled by a Licensed Registered Agent – that’s usually a lawyer who specializes in this kind of work. You may also need some extra permits: one example is the Belize International Trading License. The meeting and board resolutions may not be valid if they were created by a foreign lawyer. If you’re dreaming of an offshore corporation, there are a few things to bear in mind:
These statements are all true – but they’re also commonly misunderstood… so let’s have a closer look.
What Are We Talking About?
Forming and maintaining a company is usually the most complicated part of starting a business.
You may need to obtain licenses, pay taxes, open bank accounts or fulfil other formalities. In order to do this in different countries you have to take care of your own registration process – that’s what we’re talking about when we refer to company formation.
Generally, it means accepting rules and limitations that have been set by the country you wish to register in or accepting a service offered by a professional formator for a fee.
In some countries (for example Singapore) – there are no formalities at all, as long as you don’t mind running your business with an informal status.
In this post, I will not talk about tax and legal aspects of company registration but rather shed light on some myths related to it. Some of these myths are the reason why people have prejudices against doing their own company registration process without using the services of a professional. That is why I decided to collect them in one place – so that you know what not to do when registering your company.
Conclusion paragraph: The truth is, there are a lot of laws in place to ensure that you don’t start up the wrong type of company and get into legal trouble. If you’re thinking about forming your own company without help from an attorney, make sure you read our blog post on the Top 7 Myths About Company Formation! You’ll learn how important it can be to have someone who understands these laws by your side when starting off with business ownership.
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