Forming an LLC Online: You Get What You Pay For

Update (November 17, 2010): I have decided to start identifying by name providers of corporate and LLC online formation services who, in my opinion, have delivered inadequate service to my clients. (The clients used those providers before retaining me.) The inadequate provider referenced, below, in this post is Rocket Lawyer, which has been added to the Hall of Shame page.

Update (April 27, 2011): I had a cordial conversation this afternoon with Rocket Lawyer’s VP of Sales & Business Development. He acknowledged that, last year, Rocket Lawyer was using a filing service (filing operations are outsourced) that did not meet the company’s expectations. He reported that the current filing service is performing at a much higher level and that Rocket Lawyer is paying closer attention to ongoing support of its customers.

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Almost a year ago, I suggested (in Can I form an LLC without a lawyer?) that entrepreneurs seeking to save money when forming a limited liability company would be better off buying a book from Nolo than using an online LLC formation service. I now believe that more than ever.

A new client is frustrated. An online service formed his LLC well over a week ago, but he still has not received the Articles of Organization endorsed by the Secretary of State – which he needs to open a bank account. Furthermore, he is having trouble finding out from the service when the endorsed Articles will arrive. Talk about a lack of personal service….

When I form an LLC for a client, my filing service in Sacramento e-mails the endorsed Articles to me as soon as they are available, and I promptly forward them to the client.

Lesson learned: If you save money by forming an LLC online, you get what you pay for.

Related posts:

• Online Incorporation: It’s Time to Call Out Inadequate Providers
• When Is It OK to Incorporate Online?

Check out all posts about LLCs.

Photo credit: Mark via stock.xchng

Dana H. Shultz, Attorney at Law  +1 510-547-0545  dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.