Today my CPA emailed me asking if I'd heard complaints about a cheap incorporation service online that failed to adequately notify its users about the potential costs and requirements for a corporate agent. I have a corporation and don't think I've ever checked into the matter. It is potentially an expensive thing to ignore.

Slothful attention to corporate procedures and regulations is just plain dumb. The whole point of establishing a corporation or LLC is to separate (protect) personal from corporate assets. But, most of us small biz folks don't adhere to good business practices when it comes to these instruments of legal protection. We're too busy trying to get stuff done.

I perceive that people don't pay attention and seldom catch anything that these cheap incorporation services fail to include, let alone do such business owners notice when the cheap incorporation service fails to notify the business owner about potential hazards when incorporating. The problem only appears during an audit or after a law suit. At that point, it's too late.

Most small business owners just want the legal right to use the Inc. in their name to present themselves as a bona fide business. As far as they're concerned they're paying a few bucks to avoid calling their business a D.B.A. It's like renting a little office in town to avoid using their home address or when they use a mail box service to pretend they have a separate business address. They're less concerned about the functionality and nature of the shell than they are the shell itself.

The danger of approaching your corporation or LLC this way is that you risk losing your assets or paying penalties and fines for failing to follow legal procedure. "But, I left cheaponlinecorporation.com do it for me!" is not an excuse and won't protect your assets if you get in trouble. Funny enough, if they had legitimate professionals perform their corporate duties, you may find it impossible to recoup your losses through litigation. Chances are you signed an agreement that indemnified them against your losses because they didn't give you all the details. If you began your business corporate or LLC shell this way, you may want to do a little checkup to see how valid your protections are.