Startup Squander #3 -- Entity Registration Services By K. MacKillop At Isnare.com Ezine Articles

Another popular service marketed to would-be entrepreneurs are the entity registration services. With these services, you fill in a form to indicate your preferences for filing your LLC or corporate paperwork with the state and the service files your registration and sends you the paperwork. You pay them a flat fee, usually, for the service plus the actual registration costs for your state. There are two problems with these services -- they are unnecessary and allow business owners to relinquish control of an important aspect of business ownership.

All the services actually provide is taking your responses to the LLC or Corporate clause options and inserting them into a basic template. Most states now allow business owners to register their LLC or Corporation online with a form very similar to the ones these services provide, and there is no extra charge for registering your business with the state. If you have the service write your Operating Agreement, they also use a basic template with your specific options filled in. To use the registration service effectively, you have to figure out which options are best for you first, so taking the extra step of filling in the actual form is hardly worth the money they charge. While most registration services provide definitions of the various choices available, it is still up to you to make the best choice for your business. If terms like "member managed" and "registered agent" sound like a foreign language to you, there are a number of free resources that will explain them just as well as the paid registration services.

Technically, your entity registration and Operating Agreement are legal documents. For some reason, the term "legal document" strikes fear in the most capable of people, and they believe it is all too complicated to handle themselves. It is critical that you learn and understand the information contained in your entity paperwork. After, it's your business and you need to know what the rules are for yourself. If you are going in to business with a partner, it is even more important that both partners clearly understand the clauses in the documentation, particularly the responsibilities and rights that each partner holds. The registration services cannot give you advice, only a licensed attorney can help you figure out complicated or difficult situations, and a registration service will refer you to an attorney if your situation is complicated or unusual.

When it comes to registering and licensing your business, spend your time, not your money. As a business owner, you need to understand every aspect of your business setup, beginning with your organization papers. Don't leave something so important to someone else, there is a good chance you will regret it down the road. If you have a particularly difficult set of circumstances, or you plan to go the IPO route, find a competent attorney to work with you through the process. Again, don't just leave the details to the lawyer. Be sure you understand every clause that goes in, because those are the rules your business will have to live by.

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