• Forming a company seems like a simple task. There are many online providers of forms that would have you believe as much. Here are just a few examples of what some of these providers often don’t tell you in the most straightforward manner:
- The filing fees involved.
- What comes with the flat fee. For example, are you legally required to have an operating agreement or member control agreement? Often these required documents are significantly extra and are not tailored to your needs.
- The choice of entity selection is critical and can have dire consequences if not done properly (e.g. liability protection, tax consequences and
governance matters – to name a few). - You won’t have somebody to help you consider various scenarios on items such as multiple-member/multiple-shareholder arrangements, other documents that may be needed for your business or in your industry.
- What state(s) you should consider for incorporation/forming your entity – hint, it is not always best to choose your state.
- Why your goals may require a certain type of entity that is different than what you are used to, what your accountant recommended, etc.
• Choose a lawyer that has formed hundreds of entities, who can efficiently tailor your formation documents/structure to your needs and situation. Using a lawyer often ends up being cheaper than the online providers of forms, with better understanding and less risk/headache later. At Pruvent, we believe in doing things right the first time.