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5 Mistakes Even the Best Businesses Make
There are many articles about creating a company, including this great set from the state of Ohio.
The first step that many mention is that you will need to decide the type of company you want to create, legally (an LLC, a Sole Prop, a Corporation, etc.).
I had decided in advance, that when I began my company, I wanted it to be an LLC. The process in Ohio is fairly straightforward, and it is theoretically possible to avoid spending money, beyond the $99 filing fee to register with the state, using form #533A.
However, I spent a bit more, and I advise everyone to carefully consider their options, and to consider not going it solo on this process.
First of all, I’m not a lawyer, and I’m a big advocate of always seeking legal advice. So reading the form, the full implication of some fields was basically just fodder to way over think & then feel uncertain about my answers anyway. But, if all I wanted was legal advice, it turns out entrepreneurs in the Columbus area have many great resources available.
But one field in particular really threw me for a loop, Statutory Agent. This is basically the whole second page of the form, so it must be important, right? In fact, the Statutory Agent (also sometimes called a Registered Agent) can be you, but MUST be available at a specific physical address (within the state) during all normal business hours. Since initially I knew I’d be the sole employee of my company, not being able to go meet with clients, let alone take a day off, was a deal breaker.
So if I don’t want to be my own Statutory Agent, what are my other options? I found & looked at several companies. Some offer just Statutory Agent services, and these are the cheapest, as low as $49/year. Many bundle Statutory Agent services with something often called Compliance, where basically, they warn you when forms, filings, and other things are due. The reminders sounded useful to me, at least for the first year, as I’m well aware I don’t know what I don’t know.
I also noticed it’s important to choose a stable company, because any change, even just a change of address for the Statutory Agent must be registered with the state and costs money. Here’s another great page provided by Ohio, discussing Statutory Agents in more detail: Statutory Agents
There was another option I noticed, while doing my research. Their are larger companies that specialize in helping people create new companies quickly & easily, these are the ones you’ve probably heard the names of already. They provide Statutory Agent services, but I couldn’t find a way to only hire them as a Statutory Agent, at least not easily, and I started reading about the full packages they specialize in.
The packages were all similar. These companies will walk you through filling in the state’s registration form, and then will electronically submit it on your behalf. You can use them as your Statutory Agent, and they all offer a Compliance service, as well as to apply for an Employer Identification Number (EIN) for you. Many also offer a wide range of additional business and legal forms with similar “walk you through it” guidance for completion.
What I found confusing was the pricing. Online, it was difficult to tally up what a package including all the services I was interested in would cost, so I called several of them. In the end, I chose Rocket Lawyer. I chose them, because of the companies I called, the minimum cost for Statutory Agent Service plus filing was lowest versus other large package companies (though it did include extras, and was much more expensive than going it solo plus a $49 Agent). But one thing in particular that it included was not only an extensive library of legal forms, but also “Ask a Lawyer” service, including up to an hour in each specialty. To be fair, I haven’t tested that aspect yet, if I do I’ll be sure to post about my experience.
In the end, I spent over $400 on the package (including the $99 filing fee that went to the state of Ohio). But I felt very confident that my paperwork was correct and that I had purchased a useful resource pool for other steps I needed to take in the first year, such as creating a Operating Agreement for my LLC (recommended by every expert I consulted, but not 100% required – and only took 5 minutes on Rocket Lawyer) and my business contracts.
Greater Columbus Consulting
Disclosure & Disclaimer
I am not a lawyer, accountant, or tax expert. All posts on this site are just my experiences and opinions from doing business, and setting up businesses.