The REAL Cost of DIY Incorporation

By Ed Younger.

If you run your own business, you are a smart and talented individual. You can probably handle any task that you set your mind to, and if you are thinking about incorporating or forming an LLC, you’ve probably heard advertisements for low cost do-it-yourself incorporation  services. These ads claim that you can save money by incorporating or forming an LLC online by yourself. But as a smart business person, you should know that there is more to the story than as advertised.

First, most of these services fail to disclose the true cost. The advertised price is for the bare minimum. It does not include important documents and steps that must be purchased at an additional cost.

Upselling of unnecessary options is also common so beware. One popular website automatically subscribes you to ongoing services that cost hundreds of dollars per year. In the end, it can cost more than seven times the initial advertised price for a complete DIY kit. One of the biggest problems is since you are not receiving legal advice, how do you know if you are making the right choices on how to structure your business? If you make a mistake it may cost you much more to correct it later, and even worse, you may not get the personal liability protection or benefits you were after in the first place.

Another factor to consider is time. Time you spend doing your own legal work is time lost developing your business or serving your customers and earning revenue. While the DIY services promise to be “quick and simple”, in reality you will need to research the proper business structure and setup for your needs.

Each situation is unique and there are many factors to consider. If you don’t have the time to dedicate to doing this homework, you will end up frustrated by the DIY process or worse yet, stuck with a structure that hinders your objectives. Successful entrepreneurs recognize the value of their time and this should not be discounted when deciding the value of DIY incorporation services.

Are you willing to risk your dream business and your personal security by trying to save a few bucks?

At Alvis Frantz and Associates, we can help get your business entity formed with confidence. Let us be a trusted part of your team that helps you maximize the potential of your business.

Ed Younger, is an associate attorney at Alvis Frantz and Associates and is dedicated to helping your business. Our LLC and Corporation services are complete packages that take care of Federal, state, and local filings. Call Ed 925-516-1617 or email him today to discuss your business formation.

Disclaimer: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

This information on this site is designed to provide a general overview with regard to the subject matter covered and may not be state specific. The authors, publisher and host are not providing legal, accounting, tax or other specific advice to your situation.


Copyright © 2012 Alvis Frantz and Associates.

BEWARE SMALL EMPLOYERS - TOP 10 WAYS TO AVOID BEING SUED

Lawsuits can be death for small businesses. In more than 20 years of legal advice to employers and employees, I have seen repeated mistakes by employers, most of which could have been avoided. Don’t despair if you recognize yourself in this list; most employers stumble on more than one. The solution is to change your procedures NOW, before a disgruntled employee takes action.

DO NOT:

1. Hold an employee’s final check “hostage” until return of uniform, cell phone, keys, and/or other company property.

2. Automatically characterize all employees as “exempt” from the overtime laws and pay them a salary.

3. Pay employees in cash. You still have to take withholdings, itemize, and document.

4. Allow employees to work through breaks and leave early.

5. Hire “independent contractors.” Most workers do not qualify as independent contractors and various taxing authorities are watching this closely.

6. Loan money to employees and then deduct whatever is still owing from final paychecks.

7. Have a “use it or lose it” vacation policy.

8. Fail to document your employees’ hours worked.

9. Ignore complaints that an employee is being “bothered.” Red flag. This is code for sexual harassment.

10. Fail to have an employee handbook. All employers should have one, even small employers.

While these may be my “top 10,” unfortunately there are many more ways that employers—especially small employers—can run afoul of the labor laws, sometimes with catastrophic results. Your best strategy is to be pro-active and get solid policies and procedures in place with the help of a knowledgeable professional. As the only employment law specialist in East Contra Costa County, I can help: Rhonda@alvisfrantzlaw.com or (925) 516-1617.

By: Rhonda Shelton Kraeber, Esq.

Disclaimer: The information provided is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to your particular issue or problem. Use of this information or any related information does not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual authors and does not reflect the opinions of any firm or attorney.

Hey, That’s My Stuff!

My client wants to hire an expert consultant to make part of a product that my client is manufacturing. Both parties are very talented with respect to their particular areas of expertise, but they need each other in order to have a successful product. My client wants to make sure that he has all the rights to the finished product, and that the consultant can’t re-sell his part of the technology to someone else. The consultant feels that his contribution will revolutionize the industry that they are in, and wants money at the back end of the transaction based on the success of the product. For this, he is willing to charge a lower hourly fee up front.


How does this all get sorted out? First, I am grateful that my client came to me before having the Consultant start working. I can work through the details with my client, and document whose bringing what to the table. Another client didn’t, and now no one knows who owns what, with both parties claiming that they have full rights to the product. One issue that comes up most often is that the “concept” originator believes that there would be no product without his creativity. But there is a big difference between saying, “I have a concept for a restaurant where people can eat in their car” and actually creating a McDonalds® franchise. While everyone is friends, there are usually no issues, but when the money starts rolling in, if these matters are not sorted out in advance, disputes arise often leading to litigation.

There are several types of agreements associated with the process of creating “Intellectual Property.” There’s a Confidentiality or Non-Disclosure Agreement, a Work for Hire Agreement for high-level project managers/engineers, an Independent Contractors’ Agreement for the more common activities associated with work to be done, a Certificate of Originality, a Co-development agreement, a cross-licensing agreement a joint venture agreement and more. All of these agreements cover different aspects of the creation process, and have different remedies for a breach.

Call me for a consultation at 925-516-1617 to come see me if you are creating something that will have lasting value, whether it’s an invention, software technology, video games, artwork, music, or just an idea whose time will come. We’ll sort it out together.  http://www.alvisfrantzlaw.com/

The information above is not a substitute for seeking legal advice. Barbara Frantz, local resident for 17 years, has 34 years of legal experience, offering proven solutions for business owners to increase revenues and achieve their long range goals. Barbara is a lawyer with Alvis Frantz and Associates, your law firm providing confidence and security, because your business and your family are your highest priority in life. All Rights Reserved