Legal Question in Business Law in California

Re: incorporation process

Bottom line is you get what you pay for. Although many services charge small amounts to incorporate a business, they typically do not provide you with all of the documents and advice you will need to make sure that your corporation is treated as a separate legal entity (the reason you incorporate a busienss). Moreover, after talking to an attorney, you may discover that forming a corporation is not necessary, and that some other entity may be more appropriate for your situation.

Re: incorporation process

I'd say if this were a brand-new business with no done deals, no pre-existing licenses, leases, accounts, assets or liabilities, and there were to be a single shareholder, $1,500 is a bit steep. It depends to some extent on how much post-incorporation hand-holding the shareholder will need to get the corporation off on the right track, and what is included beyond merely filing boilerplate articles of incorporation. For example, most new corporations will want to file an SS-4 for a taxpayer ID number, an IRS 2553 for "S" tax treatment, a Dept. of Corporations Form 25102(f) to claim exemption for issuing its stock, and a bunch of other stuff. If the law firm will handle this, that improves the deal. This is not to mention whether the deal included bylaws, and if so, are they word-processor boilerplate or thoughtfully tailored to this company's specific needs?

On the other hand, where the business is already in existence, the checklist of things that need to be checked out and probably handled grows much longer, and if the law firm is proposing to do all of them for $1,500, that would be a wonderful bargain. However, the $1,500 charge probably doesn't cover every aspect that should be reviewed and handled.

I do a lot of incorporations, and most of them are in the $500 to $2,500 range, which includes the Secretary of State's filing fees, the additional fee for expedited service, my costs to pay a Sacramento-based courier, a corporate seal, stock certificates and a fancy corporate records filing system. Clients paying the higher fees get additional services that save them time and possible woes from failure to handle the many details of forming a corporation that go beyond filing the Articles.

Finally, if you have paid an attorney and something isn't handled correctly you have someone to sue for damages resulting from the oversight or error.

Re: incorporation process

I don't know. Do you know how to do it correctly, and comply with all the regulations and rules? Do you know what and how to prepare the various corporate documents and filings and notices required? If not, then paying someone who does makes sense, doesn't it?