Starting a business can be intimidating, especially if you don’t have the background to help you understand the incorporation process or the nuances of various corporate structures. This doesn’t mean that you won’t be a successful business owner! With a little bit of research, you will be prepared to set up your business successfully.
Read ahead, and learn how to avoid these ten common and costly mistakes:
1. “I don’t need to hire a filing assistance service!”
There are many factors to consider when choosing the ideal corporate structure for your new company. With so many variables, it can be difficult for even highly educated and experienced business owners to make the best choice. Hiring a dedicated professional (or team of professionals) is the best way to ensure that your new company is set up correctly.
2. “I’ll get help later if I need it.”
Instead of waiting to get help when you inevitably encounter a problem, the best course of action is to utilize all available resources at the beginning of the incorporation process. It takes time to properly analyze the factors that determine the ideal corporate structure for your business, so get started on the right foot. Get help at the beginning.
3. “It doesn’t matter which registration service I hire; they’re all the same.”
Working with unskilled professional services is always bad for business, no matter what they are assisting you with. Be sure to take the time to research the most reliable and reputable filing service before you hire one.
4. “As long as I follow most regulations, I’ll probably be okay.”
A good filing service has a substantial knowledge base. They know the ins and outs of regulations and processes mandated by state law. If you try to file yourself and do not meet all the relevant requirements, you could be denied the right to incorporate, wasting valuable time and effort. The government requires your submission to be perfect, so work with someone who knows every single rule.
5. “The cheapest service is good enough.”
Cash is tight for many new businesses, which commonly leads owners to try and save money by choosing the cheapest filing service. A basic filing service might help you process paperwork without helping you decide the best corporate structure for your business. This can lead to the decision to file with a less-than-ideal corporate structure, which can likely cost tens of thousands of dollars (or maybe even more) down the road.
6. “I can be my own registered agent; how hard can it be?”
Your company’s registered agent will be required to be available at all times during standard business hours to communicate with any governmental or regulatory agencies that need to contact your company. If you list yourself, it might create potential schedule conflicts and operational inefficiencies. Hiring an outside registered agent gives you both flexibility and peace of mind.
7. “Typos aren’t a big deal.”
Typos and incorrect information can cause substantial delays in the filing process or cause additional time-consuming work for you down the road when you are required to make corrections. Hiring a filing service ensures that all typos will be caught before they are filed.
8. “I’ll just pick a corporate structure; they’re all the same, anyway.”
Determining the most beneficial corporate structure for your company is one of the most often overlooked steps in starting a business. The difference between an acceptable structure and the ideal structure for your specific company can be substantial, both financially and legally.
9. “I probably can’t incorporate my business.”
Many small business owners often dismiss the option of incorporating, when they could benefit by doing so. This is understandable! Many people believe that all corporations are large entities. Incorporating your business (no matter how small) protects your personal assets and offers many other opportunities. Take advantage.
10. “It’s not important to understand the details of my corporate structure.”
The details of corporate structure may seem insignificant (and kind of boring). But those tiny details can make or break your company. It’s important to have an understanding of exactly what your chosen corporate structure entails. Trying to file alone often leaves more questions than answers, and typically results in a less-than-perfect decision. Don’t get overwhelmed and give up on understanding these structures! Utilize a knowledgeable filing agency.