Pros and Cons of Incorporating 

           The law does not make a distinction between the owners and the business in these two types of business entities: sole proprietorship and partnership.  Owners in this type of entities are exposed to unlimited liabilities, meaning the creditors can go after their personal assets. You probably don’t want to be caught in such a situation.

           In certain circumstances, it makes sense to make a separate legal person out of the business entity. You, the owner, become the shareholder of a corporation or member of a limited liability company (the latter commonly referred to as a LLC).  Your liability is limited to your proportionate share of the business. But this legal entity must not be a sham. 

            To enjoy the protection of a limited liability entity, it must be properly formed. Getting a lawyer to do it might be too troublesome for him and too costly for some of you.  Although you can, it is probably better if you do not do it yourself. It’s just too much of a hassle. A better alternative is to get an experienced professional to do it for you.

             You should seek out those providers that charge a reasonable fee of $800 or even less.  You can expect the provider to do the following:  

  • Preparation and filing of Articles of Incorporation or equivalent;
  • Write up personalized Bylaws and Minutes;
  • Completion of stock certificate, and the ledger for the initial stock issue;
  • Filing of stock exemption notice with the Dept. of Corporations;
  • Filing of initial Annual Statement with the Secretary of State; and
  • Attend to other requirement of the Secretary of State.

            Then there are other matters to deal with, such as getting a taxpayer's identification number from the IRS. These things can also be taken care of by the professionals, the fees of which may already have been included in the package deal.