You can incorporate online for less than an attorney will charge, however, you must remember that there are only two reasons to incorporate or form an LLC.   One reason is for the savings provided in the tax structure and the other is to limit your liability.  A company that is not properly formed may not be considered by courts to be a “legal entity” (a term used by attorneys for companies such as LLC’s, corporations, etc) which may lead to personal liability.   

 In order for the company to be a “legal entity,” it must follow guidelines that allow it to operate legally.  You must properly form or incorporate, keep accurate records, obtain employee identification numbers, pay taxes, file quarterly returns, keep minutes, issue stock or units, sign documents correctly, and conduct business properly. 

You may also need professional licenses, occupational licenses, bonds, insurance(s) and other permits depending on your business.  If not, you may believe you have a corporation or LLC, but a judge may decide otherwise.  This is known as piercing the corporate veil.  It is the legal equivalent of believing you have a bullet proof vest but only having on a thick sweater.  This false belief can cause a person to take on more risks by believing they are protected when no protection exists.

 Often clients come in after they have been served by the sheriff and say, “How can they sue me as an individual?  I have corporate protection!”  Often, the business has not followed many of the requirements, and the law suit is the first notification that they may have an issue.  As a side note, most businesses are not sued when they are new.  The owners are often successfully operating, but have never spoken to an attorney regarding if the business was formed properly and operates as a true “legal entity.”

At the Affinity Law Firm, we are very competitive with our rates and our work is performed by staff that understands the need to be legally protected.  It is your choice on whether to hire an attorney to form your corporation.  But, if you choose not to use an attorney, at least buy a good book on corporations.
 

This is a very common mistake of many entrepreneurs.  Even if you are diligent, read all the fine print, and lookup and the definitions of “legal” words, this is often a costly mistake for several reasons:

• Contracts often have words that have a legal meaning which is different than the common usage of the words.  Common words like property, owner, assignment, infant, capacity, consideration, and many other words, have slightly different meanings which can change a contract. 
• The American system of government has a constitution, as well as federal laws, state laws, and local laws.  These rules don’t always appear to make sense, but they may give or take away rights even if you “contract away” or “waive” your rights.  For example, you cannot work for less than minimum wage even if you agree to, as it would be illegal.
• Contracts often have legal challenges for what they don’t say or should have included.  A person might find an excellent binding contract online and have another person sign the contract, but find themselves with no recourse.  Often times, these online forms do not contain necessary provisions for reasonable enforcement of the contract, and the only option for the person who found the contract online is to file suit. 
• Last, but not least, sometimes there is a better way of doing the same deal.  People often write contracts for situations that could be better taken care of by a different action.   Examples of this are often found in real estate transactions.  For example: a person might spend several hours to draft a no-lien provision into a real estate contract.  This is generally performed by the title company prior to closing as all liens must be satisfied if title insurance is to be issued.