How to Choose an Online Incorporation Service

How to Choose an Online Incorporation Service

With so many online incorporation service providers online how do you know your choosing the right one?

Based on over 20 years in the incorporation industry as an employee and business owner, I can provide some insight on what to look for and what to avoid when choosing an incorporation service.

 

TRUST When Choosing an Online Incorporation Service

The first thing you need to make sure you look at and the most important in my opinion is trust. Do you trust the incorporation service company?

The best way to find out if you can trust a company is looking at their history of providing the services they offer. Here are a few questions you need to ask:

  • How long has the company been operating as an incorporation service provider?
  • Are they a member of the BBB?
  • Have they resolved all complaints they may have received with the BBB?
    (Just because a business has a complaint, does not mean that’s a bad thing. Its all relative in the scope of the number of clients a company services each year. If you look at the top credit card companies in the world and see their BBB report you’d be shocked at the number of complaints. However, I still trust the company isn’t looking to run away with my money just because they have a few BBB complaints.)

The last step in determining trust is to call the company. Yes, this means you should pick up the phone and talk to the company that’s offering online incorporation services.  The key is not to call as a new customer, but rather an existing customer. If you haven’t worked with the company before, just call and ask for customer service. Tell the rep you just have a couple generic questions and were wondering if they could answer them for you.  If they insist on a customer ID number, tell them you are going to form you company today, but wanted to speak with a service person first since you know they have more knowledge then a sales rep when it comes to answering these technical questions.

Then ask the customer service person the following:

Online Incorporation Service

  • How long will it take for me to get my company formed?
  • What paperwork will I need to fill out once I get the corporation?
  • Do you help with maintaining the paperwork for me?
  • How long has your company been doing this?
  • How many service reps do you have there?

What you’re looking for is a level of comfort. Decide if you’re happy with the way the service rep answered the questions and worked with you.  Also, pay attention to the number of service reps they have. In case you find yourself in need of speaking with one in the future, you want to work with an incorporation service provider who has a large staff to take your call. There are too many small incorporation providers trying to get into this market and have one or two people operating them. The main disadvantage of the smaller companies is experience. When it comes down to who you trust, I always trust someone with the experience of having done what I need tens of thousands, if not hundreds of thousands of times before, rather than someone just trying to figure it out.

SERVICES OFFERED When Choosing an Online Incorporation Service

Most online incorporation service providers offer similar services. You’ll typically find the following listed on their order form page:

  • Business name verification
  • Prepare and File articles of formation
  • Registered Agent services
  • Corporate record book
  • Corporate seal
  • Federal EIN application
  • Business license package
  • Bylaws or Operating Agreement
  • Some type of online compliance tool (all are very limited)

Most will charge around $99 for their basic incorporation package and will go up from there. State fees are always extra and delivery fees are usually included in the price.

Larger packages offered by the incorporation service providers will include things you can do on your own, but if you have a few extra bucks, it will save you some time. Having the services provider file the paperwork for you EIN, S election or providing a list of licenses you’ll need are helpful.

Most online incorporation service companies provide an online document center for getting your articles and other filings electronically.  Some states still require physical paper.

Only use companies that offer these basic services. If you are looking for a company to work with over the year to manage your resolutions, meeting minutes and any additional amendments you may have, make sure you ask if the company offers that ahead of time.

PRICE When Choosing an Online Incorporation Service

Pricing provided by online incorporation services has dropped dramatically over the years. In some cases you’ll find companies offering to form a corporation for free. However, it’s not really free. You still pay state fees, shipping and handling, which will come out to about the same price as what many others start at, $99 plus state fees.

Although price is important when first starting a business it’s not the only thing. Balance your decision in choosing a company with Trust, Services and Price. All three are important and need to be considered with choosing the right online incorporation service.

 

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David Gass is a serial entrepreneur who has built companies from scratch with less than $200 and grown them to multi-million dollar businesses. He is an expert author and consultant for small business marketing, structuring and financing.

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