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Friday, January 27th, 2017
An Apostille is a certification from a US Federal or State government that allows a document from that office to be accepted in any of the countries that have signed the Apostille Convention adopted on October 5th, 1961. In the United States this typically is the Secretary of State in each US state or the US Department of State (for Federal Documents).
Many of our international clients who form a company in the USA may also need an an Apostille or “Certificate of Authentication” (for countries that did not participate in the Apostille Convention). This is because their home country may need to verify that the documents filed in the USA are legitimate. Many times this is so they can open a bank account or meet other business or licensing requirements in their country.
First, you need to have filed the original business formation document (Articles of Incorporation or Articles of Organization to create the Corporation or LLC), then you need to have that document reviewed and “stamped” with the Apostille certification as well as provide the correct filing fee (and additional expedite fee if you are in a hurry). Typically this is done in the same office of the Secretary of State where you file the business formation document. The person responsible for approving the Apostille will then review and stamp the documents and return them to you via mail or courier.
It’s best you submit your original formation documents and Apostille request at the same time so you can save some “back and forth” time between filing departments or have to wait for the formation documents to return (only to send them right back to the same place). Otherwise, you can simply send the documents in to receive the stamp (make sure to include pre-paid envelopes or courier airbills to prevent your documents from being misplaced).
Note that MyNewCompany.com, Inc. can obtain your Apostille or Certificate of Authentication in any US state starting at $35 plus state fees.
Wednesday, January 18th, 2017
MyNewCompany.com would like to introduce our newest exclusive product: The Startup Wizard. The Startup Wizard is like a startup checklist on steroids and is personalized to your specific business entity type and state.
We used to provide our clients with a state-specific checklist in PDF format that shows them all of the “post-formation” tasks they need to complete after we formed their company. This includes tasks like opening a bank account, getting a business license or setting up your accounting system. With the Startup Wizard, we now have a custom web-based checklist that is personalized for your state and entity type.
What this means is that, for example, if you needed to file an Initial List for your Nevada Corporation, our checklist would provide the specific instructions to do that as well as many other important startup tasks.
- Included FREE with every business formation.
- Covers steps such as getting a business license or resale permit.
- Simple instructions for holding an Organizational Meeting, adopting Bylaws or Operating Agreements and Issuing Stock or Member Certificates.
- Progress Tracking (0 to 100%) as you complete each step.
- Weekly Automatic Email Reminder with attached PDF summary of remaining steps. Unsubscribe anytime.
- Downloadable as a PDF file if you prefer to print or view/save elsewhere.
- Multiple companies? You get a Startup Wizard for each one so you can track them separately.
- Don’t spend hours learning these critical steps, let the Startup Wizard guide you step-by-step.
- Save hundreds of dollars in time saved by having a simple checklist of things other services would charge you for.
- Properly set-up your new company without having to learn complex legal forms or procedures.
- Prevent costly mistakes or errors in the set-up of your company that could cause problems in the future (perhaps allowing lawyers to pierce your “Corporate Veil” and expose personal assets).
- If you utilize our service for your clients you can give them personalized guidance using the Startup Wizard.
- Peace of mind that you’ve set-up your company properly the first time.
We hope you like the Startup Wizard and let us know any feedback – thanks!
Wednesday, March 16th, 2016
One of our most frequent requests or inquiries is how to be “anonymous” or at least not have your name on public records when forming your company. With modern websites like CorporationWiki and state databases, the names of company owners are not only searchable but openly pushed into search results of search engines like Google.
Despite what you’ve heard from many people who push the use of Nevada or Delaware companies, in most cases the owners, Directors (of a Corporation) or Members (of an LLC) are going to be listed on a public database somewhere. This database is almost always searchable to the general public and if not, then an inquiry directly to the Secretary of State by an attorney or other authority will usually get the data they need.
This is where the New Mexico LLC comes into play. As of the date of this post, New Mexico does not require listing the names of the LLC Members on the Articles of Organization when forming the company. More importantly, New Mexico does not require an Annual Report that lists the name of the members. The Annual Report (which is called different things in different states: “Annual List”, “Statement of Information”, etc.) is basically how each state keeps track of a businesses address and owners. This is the big difference between New Mexico and other states: other states may not list the Members or Directors on the initial filing but almost all of them will require it on the Annual Report. New Mexico never asks for it.
This means that as long as you have filed your LLC in New Mexico then the members (owners) are not going to be searchable and you will effectively be anonymous.
There are a few important things to note about the New Mexico LLC:
- The Articles of Organization do require that you list the name and address of your Registered Agent. This is why we recommend you use a Professional Registered Agent, even if you form the company yourself. This will be another level of anonymity.
- When you go to open a company bank account, the bank may have issues with the fact that there are no owners listed on any database. Typically this can be overcome with a copy of the Articles of Organization, a signed Operating Agreement and a banking resolution (we provide all of these to our clients).
- Things may get more complicated when you go to obtain your Federal Employer Identification Number (FEIN or EIN); the IRS requires you to assign a person who is a member of the company to be the “responsible person”. As far as we know, EINs are generally not searchable by the public but this is where anonymity will begin to get more complicated. Some people use a trusted relative or other person to be this person.
So basically, you can form a New Mexico LLC, make sure to use a 3rd party as your Registered Agent and navigate the pitfalls that may come from opening a business bank account and you’ve achieved a level of privacy that most American’s would envy.
Wednesday, October 1st, 2014
If you’re thinking about incorporating or forming your LLC in Wyoming or Delaware, you might be wondering which state to choose and why. Both offer a “business-friendly” environment but each has different benefits–and drawbacks–depending on factors such as your type of entity, your industry and the size of your company. For example, many larger corporations incorporate in Delaware due to its business-oriented legal system, but a one-person corporation may be more drawn to Wyoming’s low fees and taxes.
Although Wyoming has been in the game for a long time and was in fact, the inventor of the American LLC (currently the entity of choice among our clients), you’ve probably heard more about Delaware because it’s the home of many Fortune 500 companies. Delaware has been an incorporation hub since the early 1900’s. It’s big business. Is your company growing fast with high-profile potential and plans to become publicly-traded? Delaware might be the right choice for you.
For the small business owner, starting a Wyoming company has distinct advantages. Wyoming requires a minimal filing fee and the annual report is only $50 in most cases. You won’t pay a franchise tax in Wyoming and there is no state income tax. If you have an existing corporation that was filed in your home state and you’re tired of the state raising fees and changing its business requirements, you can move your company to Wyoming with little hassle.
For a better look at what each state offers, we’ve created this side-by-side comparison of Wyoming vs. Delaware:
|No corporate income tax
|No state personal income tax
|No franchise tax
|No state tax on corporate shares
|Low filing fees
|Low annual fees
|One-person corporation is allowed
|No annual report required until the anniversary of the formation date
|Corporation shareholders are not listed with the state
|LLC members are not listed with the state
|Unlimited stock of any par value is allowed
|No minimum capital requirements
|Officers, directors, employees and agents are statutorily indemnified
|Can adopt a corporation formed in another state
|Meetings may be held anywhere
One important thing to remember in choosing is that companies are only authorized to do business in their state of formation. That means that if you incorporate in Wyoming, but your physical business is located in California, the state of California will require you to file additional paperwork to “foreign qualify” your Wyoming corporation as a California corporation before it can operate as a business at home. Yes, it can be confusing. And expensive. That’s why the majority of small business owners file their companies in their home state, unless they have a very specific reason to incorporate in Wyoming or Delaware.
For more information about which state to choose, please visit our state page.
Ready to order your new company? Click here!
Friday, August 2nd, 2013
Our main business is forming LLC’s and Corporations so we’ve seen how an LLC formation can go wrong in many ways.
Here are a few we’ve encountered (and sometimes had to clean up either from people or our competitor’s clients):
- I filed it myself! – I think the Do-It-Yourself mentality is crucial for a startup with limited resources. However, I think the legal filing that actually creates your company and potentially protects your personal assets (houses, cars, bank accounts, etc.) is an area you might consider going with a pro. Sure, it’s pretty easy to file an LLC in many states, but this is only one step, there are crucial steps you need to follow after the filing that fully form your LLC. In our experience, these after-formation tasks rarely get done.
- No Operating Agreement! – OK so you’ve filed your LLC and you’re done right? Most people think so – until the IRS or a process server with a lawsuit shows up. The Operating Agreement is the core document of your company that details things like the ownership percentage of each owner, the operating rules, how profits are handled, how disagreements are dealt with, liability protection clauses, etc. Even worse, you might have a blank Operating Agreement sitting around in an Minute Book or on a hard drive – which is pretty much useless.
- Didn’t Hold an Organizational Meeting – Even if you have an Operating Agreement, did you hold an Organizational Meeting to determine ownership percentage, how much cash/property you’re putting into the business? You should hold this meeting which will complete the details of your Operating Agreement, then give each member (owner) a signed copy.
- Making the S-Corporation Election – Having your LLC taxed as an S-Corporation certainly has some advantages in the right circumstance, but filing this election (using form 8832) can change how your LLC is run and managed dramatically. For instance, you will probably have to do payroll for yourself (and other members) once the election is made which is complicated and burdensome for a small LLC with limited resources – say hello to monthly deposits, quarterly taxes (both Federal and State).
- Selected Wrong Type of Entity on IRS Employer Identification Number Application – Related to the point above, picking the wrong entity type on your FEIN (which determines which tax forms you will use) is not an un-fixable mistake but we see this happening all the time and is something better done right the first time.
How to Prevent These Problems:
- Use a professional LLC formation service like ours or an attorney if you feel that you need legal advice.
- Make sure you get a personalized Operating Agreement with your LLC formation (we provide this, in editable digital format as well).
- Make sure to hold that Organizational Meeting! We give you step-by-step instructions and personalized documents “ready for signature”.
- Consider talking to a tax advisor before filing your S-Corporation Election.
- Make sure after doing the above, that you select the right type of entity when applying for you EIN (1 member = disregarded entity, 2 or more members = partnership, etc.)
Any other issues we should be aware of? Let us know in the comments!
Friday, July 26th, 2013
I will be the first to admit that the incorporation industry does not always have the best business practices or clarity. We’re based in Nevada and frankly, some of the other firms that operate here should be shut down or have their owners put in jail (and some have!).
Here’s a list of common scams, lies, deceptions and falsehoods to avoid if you’re looking to incorporate or form an LLC using a service in our industry:
- Hidden State Fees: massively inflated state fees. So a company claims to be only charging “$49” to file your company and then hides another $20-50 in the “State Fees” – compare the TOTAL price! The real state fee can be easily verified on each state’s website.
- We’ll do it for FREE! Come on you’re smarter than that. This scam typically involves tying you into a “Legal Service Plan” or other type of monthly billed service whereby you will exceed the cost of incorporation by many times. Don’t fall for it.
- Lower Service Fees by adding higher shipping fees: Add in $39 in shipping fees and suddenly you’re paying much more for that $49 service. Some companies charge that to the state, back from the state and then finally to you!
- Exploding Fees: you’re enticed with 6 months or a year of “Free” or “Discounted” registered agent fees then POW! Those fees explode in the next year or so. We’ve seen “Free” go to as high as $289/year!
- “Professional” Registered Agent Service: many services are simply using a mailbox at the UPS Store or a friend’s house! Beside’s not complying with law, if your company is sued or misses an important notice – whoops! You’ve now lost a lawsuit by default judgment and the company is late or in administratively dissolved status because the person wasn’t home that day or the UPS Store doesn’t know how to handle official legal mail.
- Incorporate in Delaware, Nevada and Wyoming to save on taxes! Why this may be true for some companies, for the vast majority it is not and actually might involve higher fees for smaller businesses. Read more about this in our article “Which State to Incorporate?“. Again, there are some great reasons to choose those states, but some act like you need to choose those states and in many cases you do not.
- Free Bylaws or Operating Agreement! This sounds great, until you find out they are blank. Do you know how long it takes to customize one of those? The chances of somebody involved in a busy startup actually doing that is close to zero. The forms should be personalized from the start.
- Free Stuff: Wow, you’re giving out free stuff that’s already free (software, forms, etc.) – amazing!
- Encouraging Multiple Entity Strategies: They’ll tell you you need to have a C-Corporation owned by 2 LLC’s, the LLC’s are then owned by each other and then you start another LLC to lease services and supplies back to your Corporation. While this may be a good asset protection strategy for a high-risk or high-growth company – it may not be appropriate for a small startup that doesn’t have any revenue yet – perhaps start with one simple LLC and go from there. Each of those entities will cost money to maintain, pay taxes, etc. and can get expensive quickly.
- Outrageously Priced Corporate Kits and Seals: $100 for a minute book? $40 extra for the seal? $40 for 10 Stock/Member certificates? This is madness.
- Upsell, Upsell, Upsell: So you’ve ordered your company and suddenly the phone rings off the hook, your email inbox and mailbox are exploding.
Here’s what MyNewCompany.com, Inc. does to bring some sanity back to this industry (and hope others follow our lead!):
- We don’t hide state fees. Verify our fees against the state.
- Regular Shipping is free, FedEx is reasonable and priced at about our cost.
- Pricing is upfront for any recurring service, guaranteed not to change.
- We only use real offices for Registered Agent Services staffed by real people that know how to handle this important mail. This includes scanning, uploading, emailing, phone notification and FedEx of important documents.
- We tell the truth about Delaware, Nevada and Wyoming as shown in the article linked above.
- We personalize your Bylaws and Operating Agreements and give you a digital copy to easily edit.
- You know how to find the Free Stuff – this isn’t rocket science, do a google search for “free accounting software” for example.
- We’re “Startups Made Simple”, not “Multiple Entity Strategies for your One Person Business that will cost 10 times an LLC”. You can order multiple entities from us of course, but we don’t encourage or advise our clients on this one way or the other. Simple is usually best when starting out.
- Our Corporate Kits are $69 or $79. This includes the Minute Book, the Seal, 20 Stock Certificates and shipping.
I hope I’ve given you a good overview of the industry and what to expect. Let us know any other scams or lies in the comments and we’ll update this post.
Thursday, July 2nd, 2009
BusinessWeek has an Article Posted on who is responsible for settling an LLC’s debts after a Dissolution:
Creditors of a valid LLC can collect only from the assets of the company, not personal assets or wages, and garnishments cannot be used against wages unless a money judgment has been awarded in court.
However, this is contingent on the LLC having been properly maintained:
Unfortunately, it’s also possible that you took some action while your company was in business that removed the protection of your LLC, such as signing a personal guarantee with the landlord or mingling personal and company funds.
Fortunately for MyNewCompany.com clients, our LLC Formation Packages include access to the “New LLC Handbook”, which tells you everything you need to know about running your LLC properly so that you can maintain your Liability Protection.
Monday, March 24th, 2008
BusinessWeek has an article about starting a one person corporation. The reader’s question is about setting up a corporation instead of an LLC so he can issue stock to employees.
The basics of the article are:
Setting up a corporation is not as complicated as most think.
Most states recognize a “1 person corporation” (Editor’s note:Â ALL states now recognize 1 person corporations or LLC’s).
As a 1 person corporation, make sure to issue stock certificates and keep meeting minutes.
LLC’s can also offer employees equity stakes in the company, though not as straightforward as corporations. The overall simplicity of the LLC makes this option attractive to small businesses.
Of course, none of this is news to us. Our incorporation and LLC formation packages are perfect for one person companies and include the necessary minutes, stock certificates, a handbookÂ and even a checklist for doing the proper startup procedures step-by-step.
Tuesday, May 30th, 2006
Ideoblog: “The latest report shows that filings for LLCs are up in 2005 from the prior year in almost every state, while they are down for corporations in most states.”
More on this topic here.