Tuesday, March 10, 2009

Costly Mistakes of Incorporating Your Company Online

A client walked into the Law Offices of Matthew Mullhofer explaining why he decided not to use an online service to incorporate his new business.

He explained to Matthew Mullhofer that he did not feel comfortable handing out vital information such as social security numbers, credit card accounts, and asset information to an unknown entity.

Matthew Mullhofer agreed with the client's realistic fears of identity fraud and theft. Unlike online companies, attorneys are licensed by the state bar and are held accountable for their actions.

In addition to the identity fraud issue, Matthew Mullhofer pointed out that there are many tax and legal consequences that must be addressed when setting up a new corporation such as what type of entity fits best for ones business. The choices are many: C-corp versus S-corp, limited liability companies versus corporations, and limited partnership versus general partnership. The online companies do not offer advice regarding these decisions.

There are also tax considerations such as choosing a calendar year end over a fiscal year end. What are the proper business expenses and deductions? How does one go about making an initial stock offerings and how to provide proper capitalization for the company?

Matthew Mullhofer also pointed out that if you do not follow the appropriate state and federal corporate formalities you may be in jeopardy in losing your limited liability status as a corporate officer/director.

Incorporating your business is a legal process and should be left to the legal professionals.

We all have different training and skill sets. You would not take your car to be fixed by anyone other than a car mechanic. As attorneys and tax professionals, we specialize in forming a corporate entity that can legally exist for many years to come.

For more information on incorporating please visit Matthew Mullhofer's website at www.protectmyassets.com

No comments:

Post a Comment