Incorporation

How do you become incorporated? Well, the first question you want to ask is why you want to become incorporated in the first place (and then probably just see LegalZoom.com).

Here’s the sitch. You have an ice cream shop you own personally. You’ve got 20 grand in a bank account in Eat Yellow Snow.com. You personally own your own home, have a fully paid-for car, and have a really nice XBox setup.

Some stooge slips on a banana peel in your store and woop woop woop woop sues you for negligent banana peel pick-up. The stooge has a great lawyer, draws an angry jury, and you lose. Big. You owe a hundred grand to cover the stooge’s pain and suffering. Because you didn’t watch this video and listen to Shmoop, you not only lose the 20 grand in your company bank account...but you have to sell your house to pay off the lawsuit.

If you’re lucky, you’ll keep your Xbox. It all depends on whether you net, after your mortgage from your house sale, enough money to pay off the stooge and his lawyer. Ah, if only you had incorporated. If you had, all you would have owed was the 20 grand from your bank account. You could have closed up shop and gone into surfboard waxing. Or whatever. But you’d still have your home with the nice Xbox setup.

So how do you make this magic happen?

Well, the process used to cost thousands of dollars and require a real lawyer. Today, most people just go to legalzoom.com, fill out a few forms, pay about 300 bucks, and voila. They’re done. Most people officially register their companies in Delaware, because that state offers extremely cheap taxes, easy filing systems, and is set up to accommodate corporate filings at scale. So you, as the new filer, get the benefit of Walmart pricing for the process.

Along with that Walmart pricing comes the freedom to wear sweatpants in public. You just keep doing you.