Sramana: If I were a small business and I wanted to use your services to incorporate, what would it cost?
Deborah Sweeney: For a basic filing which would include articles incorporation for your state, it would be $49. Each state has a filing fee, which ranges from $30 to upwards of $180.
Sramana: Do you generally incorporate companies that are operating in just one state?
Deborah Sweeney: People usually incorporate in the state in which they are doing business. Many companies that are multi-jurisdictional have filings in Delaware, Nevada, Colorado, or California. They will choose the state that is most beneficial for them to file in based on tax or employment laws.
Delaware has been perceived as a corporation friendly state. Less information may be publicly available in that jurisdiction, and there are multiple reasons why someone would incorporate in a particular jurisdiction. If a larger entity has a choice of locations to consider, then they typically work with an accountant to determine the best jurisdiction in which to file. With that said, many entities choose to incorporate in their home states even if they offer services on the Web or throughout the US. The alternative is to incorporate in Delaware and then to foreign qualify to do business in another state.
Sramana: You obviously know this space very well whereas new companies are just starting to understand all these requirements. Do you support their decision process or do they need to get an accountant or legal counsel to help them?
Deborah Sweeney: We give them information very similar to what I shared today. It is very difficult to do any more than that without an attorney-client relationship, which we do not have with our clients. A lot is decided by tax issues. Lawyers will suggest accountants get involved in those decisions.
Many businesses start out as S corporations and then they get investors and no longer qualify, so then they have to withdraw their S corporation status. As with any type of business, it fluctuates, which means they can file a conversion to change their entity based on their needs as they exist at the time.
Sramana: What about annuity services and ongoing filings?
Deborah Sweeney: The most obvious is the annual report that almost all states require to be filed. If they have chosen our $99 bundle, then we not only notify them of the states due date but we also do the filing for them. For $99 a year we take care of the filing and can serve as the registered agent. All states require that a corporation or LLC have a registered agent on file and many people don’t want to be their own registered agents. In that instance, it becomes an annuity product.
We also have products to tell our clients when their taxes are due and what other corporate deadlines are coming due. Most offerings fall within our $99 package. We have a business maintenance package where a company may anticipate conducting several filings over the course of a year and they can lock in their cost at $299 for unlimited filings. We have four clear bundles and our customers can choose the one that applies to them the best.