We use the Internet for just about everything nowadays, it is second nature for most of us. As such, I am never surprised when a new client tells me they formed their limited liability company on line, using an online service. On its face, these services look good – you get a fancy book that contains your articles of organization, pretty blank stock certificates, even a corporate seal – plus they are relatively inexpensive. But once you peel back the embossed layers you find that this online service used the Secretary of State’s form articles of organization, the “operating agreement” which is supposed to address how a member can withdraw doesn’t actually address the consequences of terminating its membership or what it means with regard to the member’s voting or financial rights.

For most new business the risks of using an online service is relatively low if you are the only owner, but if you intend to have more than one owner or plan on hiring employees in the future, there are considerations that should be thought through first. For example, under Minnesota’s Limited Liability Company Act there are certain provisions that may be modified in the articles of organization, provisions that are designed to protect you as the owner of the company. The form agreement with the Secretary of State does not, and more than likely the articles an online service uses will not, address these types of issues.

In addition, if your business will have multiple owners or members, an attorney can advise you on how best to structure distribution of profits or losses among members, how to handle situations if an owner wants to exit the business or what happens if an owner dies or becomes disabled. It is these types of topics that should be addressed upfront so as to avoid arguments, disputes or even litigation down the road.

Thus, if you are starting a business on your own and want to save money go ahead and file the articles of organization with the Secretary of State on your own, quite frankly, I would even go as far as to say save your money and don’t use an online service since they will only use the same form you will use. But if your new business has more than one owner, more than one shareholder or member, I strongly suggest you contact an attorney. The money spent up front could potentially save you thousands down the road.