Should You Use an LLC Incorporation Agent?
Sep 08, 2020 09:37 AM EDT
The job of forming an LLC by yourself can seem very challenging. Sure, the costs are low when you do it yourself, but the complexity means that you're likely to encounter several problems before you sort out the details. The Balance SMB offers a simplified guide to setting up the LLC yourself. However, there are several places where this simple process can go wrong. LLC incorporation agents operate on behalf of people or entities trying to register an LLC. But what exactly do they offer?
Every time you submit an LLC application, there are both hidden and present costs. If you intend to register the LLC yourself, you're likely to make mistakes that require you to re-register-hiring professionals limits that cost to a single payment. Usually, professional LLC incorporation agents range between $35 and $349 per company registered. They each offer their own set of affordable features and add-ons depending on what you need for your business, making them somewhat flexible.
State laws exist to ensure that businesses follow the rules. To be compliant with state laws, you're going to need these elements:
- A Legal Registered Agent: This is the entity or person that collects or sends legal documents that pertain to the LLC. The agent's address will be listed in the public record, as opposed to your personal address. Most incorporation companies give clients a deal by offering them a year free as their business's registered agents. The LLC incorporation service will also ensure that this part of the process is organized through recordkeeping.
- An EIN: An Employee Identification Number, also known as a Federal Tax Identification Number. The LLC operators can use this number to open bank accounts and allows the IRS to keep track of the business's tax record. Most LLC incorporation agents offer this service as part of their company registration package.
- Formation Documents: Before your LLC will exist as a legal entity, you will need to file formation documents with the Secretary of State's office. LLC incorporation agents are well-versed with this process and can usually speed up these formation documents' finalization.
When dealing with an LLC, there will be mountains of paperwork, from research to the filing documents themselves. Online formation services simplify this process and even remove issues with paper wastage. Most LLC incorporation agents allow their clients to fill out forms online with the particulars about their corporation. This extensive questionnaire is usually all you need to let the agent know about your company's details. Once they know these details, they can fit in the information in filing documents as necessary.
Is an Incorporation Agent Worth It?
The answer to this question relies on how much time you intend to spend in incorporating your business. The Houston Chronicle contends that, in some states, you can complete the entire process in one day. However, their estimate is based on the premise that you already know what you're doing. Research into the process, collecting and filing the forms, and all the running around can significantly bite into the time you have for dealing with business customers and laying the foundation for your company's future success. Based on the price you're paying for the convenience; an incorporation agent may be worth the cost.