- Personal asset protection – if you operate your business as a sole proprietorship, you are personally responsible for the acts (and debts) of the company. If someone is injured on your property or as a result of something your business does (or doesn’t do), your personal assets (bank accounts, homes, vehicles, everything!) is at risk. By properly forming and maintaining your business as a corporation or LLC, only the assets of the business are at risk.
- Growth – most companies sell shares of stock to raise capital for growth and expansion; something you just can’t do with a sole proprietorship.
- Tax Benefits – many expenses and depreciation of assets are deductible
Where should I form my business?
The nature of business, where it will be headquartered, and where it will operate will determine where you should form and/or register your company.
I’ve heard that Delaware is the best place to form my company. Why is that?
Here are 4 reasons why more than a million business entities choose Delaware as their state of formation:
- Business-friendly government
- Customer Service
- Respect – the corporate laws, judiciary, and legal community are highly respected throughout the world
- Reliability – the Delaware Court of Chancery and the Delaware Supreme Court have decades of experience in deciding complicated corporate cases and shareholder disputes, and are relied-upon by other courts throughout the world
What does it cost?
The filing fees vary from state to state, but the base fees to form a Delaware corporation or LLC are typically about $160.00.
What is a registered agent and why do I need one?
All U.S. companies are required by law to designate a Registered Agent (also known as a Resident Agent, Statutory Agent, or Agent for Service of Process) in each state in which they are registered. The Registered Agent must be available during normal business hours and have a physical street address in that state for delivery of legal notices. The company must inform the registered agent of any change of address, telephone, or contact person.
A professional registered agent will make sure that time-sensitive legal notices and government communications are promptly forwarded to the individual you designate for receipt, and they will keep your contact information in strict confidence.
Failure to appoint and maintain a registered agent may result in forfeiture of your company’s charter.
Registered Agent services are provided by a variety of private firms, and the fees and available services can vary greatly. Be sure the registered agent firm you choose has a good reputation for reliable service.
What is a good standing certificate and how can I get one?
This is an official certificate from the Secretary of State which proves that your company exists and is properly organized or registered in a particular state. They are obtained from the Secretary of State’s Division of Corporations.
What is a certified copy?
This is a copy of a document filed with the Secretary of State or other public official which is certified by that agency as a true and correct copy of the instrument filed in that office.
What is an apostille and why would I need one?
An apostille is a certificate which verifies the authenticity of the signature of a public official and is used to validate certificates for use outside the United States. It is accepted by countries which are members of the Hague Convention ‘Abolishing the Requirement of Consular Legalization for Foreign Public Documents of 1961’. For countries which are not members of the Hague Convention, embassy/consular authentication is generally required.