4 Reasons To Hire Company Formation Agents

photograph of a company formation agent talking to entrepreneurs
How important are company formation agents to the success of a company? These legal professionals can make all the difference - read on to find out how:

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Should you hire company formation agents or figure out all the processes on your own?

If it’s your first time launching a company, hiring formation agents probably already crossed your mind. This is true if you have no prior business background or if you’re unfamiliar with state regulations.

As a business owner, the paperwork you need to fill out before starting a business can be intimidating. This makes you more susceptible to forgoing certain documents or filing them incorrectly which could ultimately lead to rejection. 

Fortunately, there is an easier way for you to avoid any of that trauma and turmoil. Company formation through registered agents gives you more time to work on what’s most important to you — growing your business.

In this article, we’ll share four reasons registered business agents should handle your paperwork instead of you doing them yourself:

What are company formation agents?

Simply put, a company formation agent is a company or individual that helps entrepreneurs to incorporate their businesses in a fast and cost-effective manner. Some of the services they offer are:

  • Guidance for business owners in the company formation processes
  • Submitting and filing important business documents
  • Registered office address services
  • Assistance in setting up a business bank account
  • Apostille services
  • Legal clerk services
  • Secretarial services

However, when it comes to specialized business services, not all registered agents are on the same level. The scope of services will ultimately depend on the company. So, it’s best to contact them personally to make sure they offer the services necessary to accommodate your particular needs.   

Why should you hire company formation agents?

  1. They help you save both time and money

If there is one thing all serious entrepreneurs value, it’s time. While it is possible to undertake all of the necessary processes and protocols by yourself, it is also very time-consuming – and fraught with potential pitfalls.

When you hire legal professionals to incorporate your business, you save valuable time in getting your business established. What’s more, you can rest easy knowing that the job is being done right.

What you’ll usually need to do is fill out a simple form and present valid ID/s for verification purposes. The form will ask for certain information such as:

  • Proposed name of your company
  • Type of business entity chosen (LLC or company)
  • Contact information (name, address, and phone number)
  1. They can handle different business setups

All states require companies to have company formation agents before they can launch their business. However, some states do allow you to be your own registered agent. So, you’re probably thinking, why should I hire registered business agents in the first place? 

As a business owner, you’ll want everything to go ahead without a hitch. Starting a business the right way requires days, weeks, and even months of preparation… Unless you’re prepared to hand things over to the experts. 

One of the biggest decisions you need to make is choosing your business structure. This gives other businesses a clear idea of how you operate as a trading business. 

Choosing the right business structure is integral to the long-term success of your business. It can impact your business in the following ways: 

  • Who makes the final decisions
  • Tax advantages and disadvantages 
  • Amount of paperwork you’ll need to submit
  • How profits and losses are shared
  • Legal obligations and costs

* Company formation agents have the know-how and experience to incorporate different types of business entities; from private companies to Limited Liability Companies (LLC), they’ll find ways to help you maximize the potential of your business. 

photograph of company formation agents discussing client documents
Image source: Canva

  1. They have more experience

Once you provide your company formation agent with the necessary information they’ll need, you’re good to go. All you’ll need to worry about moving forward is how you can successfully run your business. When you rely on the services of professionals, you benefit by having necessary documentation handled properly and efficiently.

Going beyond the application process, registered agents also help you tackle all sorts of business matters as your enterprise grows. 

  1. Protection of personal assets

There are many situations where your assets can be in jeopardy no matter how careful you are. 

While listing your business as a sole proprietorship or partnership doesn’t take much effort, you put yourself at risk. You’ll become subject to personal liability, meaning creditors can take possession of both your business AND personal assets.

Alternatively, when you list your business as a company or LLC, you legally separate your assets from the company. This results in creditors only chasing assets that belong to the company. 

While nobody wants to imagine their business failing, in reality, not all business ventures will go according to plan. It’s vital to plan for any unforeseen circumstances so that you don’t put yourself at risk of losing everything.

Incorporating as a company or LLC ensures that losses from an incident or lawsuit protect your personal finances and assets.  

But, like with any perk, there are always exceptions; which happens when there is either a lawsuit filed against you or you’ve personally guaranteed to pay off certain debts. To increase your ‘shield’ against creditors, here are some tips you can follow:

  • Secure a business insurance plan (commercial general liability insurance, professional liability insurance, workers’ compensation insurance, etc.)
  • Do not mix your personal and business money or what’s also called ‘commingling’ assets
  • Keep close tabs on your accounting

Final thoughts

Want to avoid the hassle of learning new processes relating to state and federal regulations? Want to reduce the risk of submitting erroneous annual reports and other vital documents? Then hiring the services of a company formation agent is your best bet. 

They will handle reports, keep your legal documents safe, and assist you with a range of different business matters. A quality registered agent can also offer year-long services like annual report filing, certifying copy requests, and more. This ensures you maintain good standing with state authorities and avoid hefty penalties. 

“Plan for what is difficult while it is easy, do what is great while it is small.” – Sun Tzu

Featured Image: Canva

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