| The most common problem with low-cost or
do-it-yourself incorporations is that you don't learn anything
about preserving and maintaining your limited liability
status. There are many rules about corporate governance that
must be followed. If you fail to follow them, a court may
decide that you're still on the hook with personal liability, even
though you've incorporated, and even though
you've paid taxes as a corporation or limited liability company,
etc. for years.
Other potentially hazardous problems with cheap incorporations is that you may
end up with a disadvantages entity or entity structure, or you may
have entity documents that fail to meet your needs. For example, if you don't
overturn certain minority shareholder interests provided by
default in the Minnesota statutes, you risk having to give up
rights to minority shareholders that you may not even realize existed...
until it was too late.
To avoid these problems, and still receive a low cost
incorporation, you should consider our SMART START incorporation workshop, or a good self-help
book on incorporation. If you go the route of a book or
software program instead of an attorney,
www.nolo.com has some of the
best legal materials written for non-lawyers. But beware,
you must go through the book diligently, page by page. If
you skip to the forms, then you may be no better off than if you
pay a cheap non-attorney service to incorporate your business. |
