I recently consulted with a client who formed a legal entity using an online service and now has a myriad of problems as a result:
1. She has only one sheet of paper showing the formation, and no supporting documents.
2. The entity is set up in the wrong state.
3. The entity expired because it wasn’t renewed on time and correctly.
4. The wrong type of entity was registered altogether.
This client would have been better off if she just operated as a sole proprietorship.
Setting up a legal entity without consulting legal and tax professionals is a waste of time, money and energy. Online business incorporation services are inexpensive, but they don't give legal or tax advice.
Are you considering incorporating a new company in Delaware, because you’ve heard it’s THE BEST state for business? Unless you live in Delaware or the business is based in Delaware, you’re probably making a mistake.
Don’t get your legal and tax advice online.