Question 1

What is a company formation service?

Accepted Answer

A company formation service handles the administrative process of incorporating a business entity — filing the formation documents with the state, obtaining an EIN, setting up a registered agent, and producing the organisational documents needed to open a bank account and take on investment or clients. It automates the paperwork layer of incorporation without replacing legal counsel for structuring decisions.

Question 2

How much does it cost to form a company using an online service?

Accepted Answer

Formation services typically charge $100–300 plus the applicable state filing fee, which ranges from $50 in some states to $500 in others. Delaware C-Corps are the most commonly formed entity type for venture-backed companies. Annual registered-agent fees add $50–200 per entity per year. Subscription plans covering compliance monitoring and template libraries run $200–800 per year.

Question 3

Do I still need a lawyer if I use a formation platform?

Accepted Answer

For routine formation of a straightforward entity with no complex structuring, many founders use a platform successfully without a lawyer. For anything involving equity arrangements between co-founders, IP assignment, investor terms, multi-entity structures, or sector-specific regulatory obligations, a qualified attorney is not optional — it is the only way to avoid expensive structural mistakes that are difficult to unwind later.

Question 4

What is a registered agent and do I need one?

Accepted Answer

A registered agent is a person or company designated to receive legal and official government documents on behalf of a business entity in the state where it is registered. Every incorporated business in the US must maintain a registered agent with a physical address in the state of formation. Missing a document forwarded to a lapsed or unreliable registered agent can result in a default judgement or compliance failure.

Question 5

What is the difference between an LLC and a C-Corp?

Accepted Answer

An LLC offers pass-through taxation, flexible profit distribution, and lower administrative overhead — it is the common choice for small businesses and sole operators. A C-Corp has a more rigid structure but is required for venture capital investment, stock option issuance, and some regulatory contexts. The choice affects tax treatment, fundraising options, and exit mechanics. This decision warrants qualified legal and accounting advice, not a template.

Question 6

What ongoing compliance does a company need to maintain?

Accepted Answer

Annual report filings, franchise taxes, registered-agent renewals, and — for C-Corps — board meeting minutes and stock-ledger maintenance. The obligations and deadlines vary by state and entity type. Missing annual reports in most states results in late fees; extended non-compliance leads to administrative dissolution, which can void your liability protection retroactively. A compliance calendar with automated reminders is essential.

Legal & Formation marketplace

Ledgy: Equity Management

Cake Equity