1. Do it on your own or have a friend/colleague do it for you.

2. Hire a lawyer or law firm.

3. Incorporate online with an incorporation service.

Read on to discover the pros and cons of each method.

1. Incorporating On Your Own

Advantages:

i. It’s the cheapest method. Note, however, you’ll still have to pay state or provincial fees (the amount varies depending where you incorporate). when resources are limited, you may have no choice but to do it on your own.

ii. You learn a few things about incorporating. If you’re a real hands-on person and like doing everything yourself, then you’ll add “incorporating a business” to your list of experiences.

Disadvantages:

i. It takes time. You need to spend time doing it yourself. Filling out the forms takes time, but the real hassle is figuring out what it is you need to fill out. Also, when incorporating a business, there are steps you must do in a particular order. The number of steps involved and the order to do them depends on which state or province you incorporate. This is a learning process which on your own you’ll have to invest that time.

ii. Problems could arise. You may do it wrong and have no recourse. By no recourse, I mean you have no lawyer from whom you can make a negligence claim. Incorporation mistakes could be costly.

2. Hire an Attorney

Advantages:

i. You get to let the professionals do the work. This spares you time dealing with it on your own. Little hassle other than instructing your lawyer and signing documents. Note that hiring a lawyer for an incorporation may be more work on your part than you expect. The lawyer needs to be properly informed and instructed about your business situation.

ii. You get a customized incorporation – which may be necessary if you have a complex business situation. Moreover, you can get legal advice about setting up your company.

iii. A possible solution or compensation if a mistake or mistakes were made. You have recourse if something goes wrong – lawyers are insured. Note, however, if a lawyer acts on your instructions, then you reduce or eliminate your recourse. This is a professional negligence area which is very fact specific. Although possibly available, it will depend on your case if something goes wrong.

Disadvantages:

i. The cost. Hiring an attorney is generally the most expensive option of the 3 options presented in this article.

ii. You still have to instruct your lawyer with what it is you want based on legal advice. You’ll make time-consuming visits to your lawyer’s office and/or on the telephone.

3. Incorporate Online with Online Incorporation Services

Advantages to incorporating online with incorporation services:

i. It generally costs less than hiring a lawyer, yet your documents are prepared and filed for you based on a questionnaire you complete.

ii. Incorporation services are pretty fast because it’s done over the Internet. An online incorporation service can quickly prepare your documents and file them for you. Note that processing documents at the government end may result in a delay. I’d ask the service how long the delay is expected and whether you can pay for expedited processing if available in your jurisdiction.

iii. Minimal hassle. You don’t have to figure out the incorporation forms you need, how to complete the forms, or where to file them. I can tell you from personal experience it’s not fun trying to figure out what’s required to incorporate a business.

iv. You can take advantage of both the incorporation service and hiring a lawyer advantages. You can have a lawyer review your completed incorporation documents by an online service. This saves you the cost of having a lawyer draft them. Yet, you get legal advice. This is truly a hybrid method to save cost and get legal advice.

Disadvantages:

i. It does cost more than incorporating entirely on your own because you must pay for the service in addition to the government processing fees.

ii. There is a time commitment involved. You need to take the time filling out a questionnaire to provide to the online service. If you don’t know the answers, then you need legal advice and/or advice from an accountant. As you can see, regardless which method you use, you will invest some time in the process.

iii. Since an incorporation service isn’t a profession, they don’t have professional liability insurance. This results in limited recourse if something goes wrong. If something goes wrong, you aren’t actually hiring a lawyer so there is little recourse. You can solve this by also getting legal advice and retaining a lawyer.

Next, read about incorporating in Canada, and specifically about a Prince Edward Island incorporation for you business.

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