The Risks of Using DIY Business Formation Websites
The Dangers of DIY Business Formation Services
As a business law firm, one of the most frustrating things that we encounter are DIY business formation websites and similar services. They cause our clients more problems than they purport to solve. This is because they offer free or reduced-cost templates and services that, despite claiming to fit all types of businesses, really don’t fit any of them. Hiring a business lawyer is the only way to ensure that your business is set up in the most optimal way possible. Here are some of the biggest risks that come with using DIY business formation websites.
They Aren’t Really the Cheaper Option
The primary appeal of using a DIY business formation website lies in their claim to save you money. However, it rarely works out that way in reality. First of all, all these services really do is file some paperwork for you with the state of Florida. This is something you could easily do yourself without shelling out an additional $50.00-$100.00. Secondly, these services are never able to cater to your business’s specific needs the way a law firm can. This means that you often end up paying for insufficient documents that need to be updated with the proper terms and correct information. Making any changes to these documents will require filing amendatory documents. Those filings don’t come cheap. Ultimately, engaging with a DIY business formation website can end up costing you more in the long run than if you had hired a business formation attorney to start with.
They Skip Over Important Provisions
One of the biggest problems that you’ll encounter with DIY business formation websites comes as a result of their cookie-cutter templates. While most claim to work for businesses of all types, this assertion falls apart when you realize that it’s impossible for one model to work for the truly infinite number of businesses in the world. By trying to cover everything they, in fact, cover nothing. This is why you should work with a business formation attorney who will take the time to get to know you, your business, and your plans for future expansion. They can help you decide on whether a corporation or an LLC would best serve your needs and can also suggest important privacy and indemnification provisions to help protect your business for years to come.
Your Incorporation Documents are Just the Beginning
Starting your business off on the right foot requires more than just filing your incorporation documents. True, filing articles of organization for an LLC or articles of incorporation for a corporation are enough to form your business in the state of Florida. But it takes more than that to prepare for success. DIY services and online business formation websites aren’t going to look out for your interests the way a lawyer can. They don’t know how to protect you and your business from potential liability, nor do they have any experience with minimizing your taxes.
Business Formation Website Add-Ons are Usually Rip-Offs
When you work with us to start your business, you get more than just your formation documents. We also provide documents essential to corporate governance and maximizing the management structure of your company. These include things like operating agreements for LLCs and bylaws for corporations. There are organizational minutes and initial resolutions to think about, too. Some business formation websites will provide these documents as an add-on to their basic, overpriced business formation services. Of course, you’ll be charged extra for these, too, whereas our firm includes them in our flat fee formation services. This can end up saving you hundreds of dollars.
How Business Attorneys are Different from Formation Websites
There’s really no excuse for business formation websites to charge entrepreneurs to file a simple one- or two-page document with the state on their behalf. We offer formation walkthroughs for experienced business owners who already have a firm grasp of what they’re doing. However, new business owners shouldn’t try to split the difference between going it alone and hiring an expert. Cover all your bases and set your business up for success by hiring a business formation attorney today.
We’re here to offer you our experience with launching countless businesses, including our own firm. Contact us today by calling (727) 279-5037 or by visiting our flat fee service page.