Previously they used the USPS to lure people out of their money. Now they are using your email address. Who is they? It's the organizations that dress up their mailings and emails to make an unawares business owner think that they have to pay an exaggerated amount of money to obtain a certificate of existence or to file their annual registration.
Those companies actually get money from business owners that are unaware of the actual requirements for being a business owner in their state. Your first time filing for a separate entity is a learning experience; that includes filing for the first time in a different state because every state has their own rules and procedures for creating a business entity. The frustrating part is that the disclaimer at the bottom of the mailing informs the addressee that they are not a government entity. Who reads all the way down to the bottom of the page in the tiny disclaimer print? Especially when there is big bold print suggesting that the government is going to take your business entity away if you don't pay $$$. Don't fall for it. Here's what you need to know when you register your first business:
If you are a single owner entity, for the most part, you can create your Articles of Organization or Articles of Incorporation through the Secretary of State's business portal if the entity is fairly uncomplicated. When I say fairly uncomplicated, I mean there are no additional deviations from the state statutes regarding entity creation and organization. Otherwise, pay the money for an attorney.
If you are the only owner for your business, there are templates for Bylaws and Operating Agreements that can get you started. I would highly suggest an attorney for these, however, if you are on a shoe string budget trying to make things happen, the library is a great resource.
Bylaws and Operating Agreements are very important even if you are the only owner because they may be required for other business activity, like getting a business bank account (which you need) or a small business loan or renting an office space. Most importantly, you can't think small forever. There will come a time where you will buy another business, take on a shareholder or another member for your business, or have to use the document with court proceedings. It's better to start out right with something as opposed to having nothing and paying more for an attorney to fix the issue. After your business has made some money and it is getting closer to annual registration time, consult with a business attorney to amend your business' Bylaws or Operating Agreement to be prepared for growth.
The only money that you need to spend to create a separate entity is the filing fee for your business' entity, the annual registration fee, and any fees for a business license if required in your area. You can also choose to pay for registered agent service. A certificate of existence is not required for you to have a business. A certificate of existence is not the same as a business license. The money paid for a business license is a tax to your state and or county; sometimes even the city. You display your business license; not a certificate of existence.
The fees to create a separate business are paid to the state, county, or local government. Not those organizations asking for exaggerated amounts to request a certificate of existence or file your annual registration. If your registered agent service will file your annual registration for your business, you are paying the filing fee and their service fee for filing your annual registration. This can be helpful if the process overwhelms you and the attorney's fee is out of the business budget.
If you get a scary mailing from an organization telling you you have to pay money to display your certificate of existence or for the labor poster to display in your location, read all the way down to the footer. If they say that they are not a government organization, trash it (after redacting your personal information). Most government documents that are required for your business can be found online and requested online for little to no fee.
When starting a business for the first time, there will be mistakes made. Trial and error is not always a fatal thing for your business (heavy on the "not always"). You can avoid many mistakes by visiting a business attorney that has read about other mistakes and how the courts have settled them in their law school case books or through their law library books or through continuing education courses. If the fee for a business attorney is out of the budget, there are numerous books in the library that can assist. And they are free to check-out. Just return them on time because late fees can add up.
There's nothing wrong with having a shoestring budget to start out with your business. You can be legally complaint without a huge debt. The best resource is your state's Secretary of State website for resources in how to create a separate entity. Then once your business has the money, visit an attorney for clean up, clarification, and modification.
Here's a redacted version of an email received recently that inspired this post.
