Is it Safe to Incorporate Yourself Online As an LLC?

If you’re reading this post, you’ve probably decided two things:

1. Hiring an attorney to form your LLC (at $1,500 – $3,500) is too expensive; and

2. You’re not going to do it yourself–filling out government forms gives you hives.

The only option left is to choose an online incorporation company to form your LLC for you.

The only problem is that there are hundreds of online incorporation companies ready to sell you a dizzying array of services and a confusing pricing structure. Incfile review

Which services do you need?

Probably the biggest factor in determining the cost of forming an LLC are all the add-ons offered. In the marketing world these are called “upsells”. Understand that your plain-vanilla LLC formation is relatively simple. The company pays someone (or more likely has software auto-populate the form) to fill out an Articles of Organization form from the state where you’re forming your LLC. Then they mail that form with a check to the Secretary of State. Some time later, usually a few days or weeks at most, you have a legal LLC. There’s only so much that a company can charge for simple paper-shuffling of that kind.

So the real profit for online incorporation companies are the add-ons. I’m not begrudging them that–everyone needs to make a profit. The only question is which services do you really need, and which can you live without.

Essential Services

1. Registered agent service if you incorporated in a different state than you live in.

This one is clear cut. If you don’t have a physical address in the state you’re forming your LLC in, then you don’t have a legal LLC. Example: if you form a Nevada LLC, then you need to live or have your business in Nevada with a physical address for the government to send tax returns and serve legal process on you. If you don’t live or work there, then you need to hire a company with a physical presence in (for this example) Nevada.

2. A Corporate Veil Guarantee.

This is included standard with all Company Corporation packages. It’s basically insurance against your corporate veil being pierced. If your company is sued and you’re held personally liable because your corporate veil is pierced, they’ll reimburse legal defense fees up to $50,000.

Things you can live without:

1. Corporate kits and binders.

These are attractive binders to hold your filed Articles of Organization certificate in. It’ll look nice on your shelf. If a fancy binder is worth $25 or $50 or whatever they’re charging to you, then go ahead and get it. Or you can just buy a $1 binder at Office Depot. It’ll hold paper just the same.

2. Embosser with your corporate seal.

These look really cool. In college I started a non-profit magazine with some friends and we incorporated it as a 501(c)(3) company. We got the whole package–including the embosser. We had absolutely no legal use for the embosser. Mainly people would play with it when working on an article–embossing everything from waste paper to old magazine covers.