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by Steve Baba, Ph.D. Incorporation in any of the 50 states involves a one-page form, the articles of incorporation, and paying a small state filing fee. (Legal) Scams to Avoid: Scam 1 - Form a company for $49. An incorporation service will fill out the form for $49. The catch - You pay $125 a year for resident agent services forever. Over ten years - incorporation will cost you $1,250. The large incorporation services that spend thousands of dollars on display advertising in business magazines make their money this way. A resident agent is not necessary in most states as long as you have an instate address. Even if you need a registered agent, who forwards official mail (tax bills and lawsuits) to you a few times a year, you can find registered agent services for $50 a year. Scam 2 - Pay a lawyer $500 to fill in the form for you. If you need legal advice, it's worth paying a lawyer. If you just need a form filled in, you can do it yourself. How to Incorporate for Free: Method 1 - Go to your state's homepage. Look for information on corporations. If you are lucky, your state, like Maryland, will have downloadable incorporation forms in Adobe Acrobat format. Maryland's homepage is: www.state.MD.us Any state's homepage is www.state.XX.us, with the state's two-letter abbreviation (listed below) in the XX position. Then find the state agency that handles incorporation. Method 2 - Go to your library. Find a book on how to incorporate. Copy the incorporation forms. Warning - There are two types of books on incorporation. Type 1 - Books by incorporation services that sell you resident agent services. (Scam 1) Type 2 - Books NOT trying to sell you resident agents services. I recommend How to Incorporate in Any State by W. Dean Brown. If you purchase the book, they will also email you the forms for free in MS Word format saving you the trouble of copying or retyping the articles of incorporation (generally ten sentences). Warning - If you don't understand business taxes or basic business law and don't want to learn, you may need legal and accounting help. This is not legal advice. Over the past two decades, I have (over) spent thousands of dollars on incorporations. Of course, it was not possible to download incorporation forms on the Internet a few years ago. I have nothing against legal advice, but legal advice obviously costs money. Perform your own cost-benefit analysis. The benefit of legal advice is generally proportional to the size (what you can lose) and legal-risk (probability of losing) of your business. My other Web sites, which
are not related to incorporating: State Abbreviations: Alabama AL, Alaska AK, Arizona AZ, Arkansas AR, California CA, Colorado CO, Connecticut CT, Delaware DE, District of Columbia DC, Florida FL, Georgia GA, Hawaii HI, Idaho ID, Illinois IL, Indiana IN, Iowa IA, Kansas KS, Kentucky KY, Louisiana LA, Maine ME, Maryland MD, Massachusetts MA, Michigan MI, Minnesota MN, Mississippi MS, Missouri MO, Montana MT, Nebraska NB, Nevada NV, New Hampshire NH, New Jersey NJ, New Mexico NM, New York NY, North Carolina NC, North Dakota ND, Ohio OH, Oklahoma OK, Oregon OR, Pennsylvania PA, Rhode Island RI, South Carolina SC, South Dakota SD, Tennessee TN, Texas TX, Utah UT, Vermont VT, Virginia VA, Washington WA, West Virginia WV, Wisconsin WI, Wyoming WY, |