There is a reason professional service providers such as CPAs, EAs and lawyers have to go through continuous education and testing to be licensed to practice. And if you’re unlicensed, you tend to stay away from things you aren’t an expert in.
For example, unless a licensed attorney has an LLM designation, they usually stay away from detailed tax matters, and CPAs and EAs should probably stay away from giving detailed legal advice. The same holds true for entity document preparation services.
I received an email from one of these services recently. On the website, they had an FAQ section explaining all of the different entities they could form: corporations, LLCs, sole-proprietorships, d/b/a’s and general partnerships. For each, they listed the pros and the cons. For instance, for LLCs, some of the pros were flexibility, ease of formation and lack of yearly requirements like meetings. Some of the cons were flow-through taxation, self-employment taxes and that investors don’t like to invest in LLCs because of the flow-through and lack of requirements corporations have.
Read full article here: https://www.accountingweb.com/community/blogs/craig-smalley/be-wary-of-entity-document-preparation-services?source=050619
