Starting your own business is a time of great excitement and anticipation. Companies like make it easy to start selling your products online quickly. In many ways the Internet has made it easier to start your own business, but it has also left traps for the unwary. I practiced law for nearly 10 years and during that time served as outside general counsel to small and large businesses alike.

Anyone, and I mean anyone who is going to start a business, especially an ecommerce business where they are selling goods and/or services, should be incorporated. The Internet has made incorporating easy and relatively cheap, which is both good and bad as you will see. The most important reason to incorporate is that, if properly run, a corporation shields the owner from personal liability for the corporation's debts. Lets say you open an online store to sell widgets. You may or may not know a lot about the products you sell (today many people purchase bulk products and resell them).

Chuck Consumer buys a widget through your estore. When Chuck Consumer gets the product, let's say his three year old eats the widget and has a serious medical problem requiring surgery, etc. Chuck Consumer will go to an attorney who will likely instruct him to sue. They will sue the manufacturer of the widget and the party who sold them the widget. A court may find that the maker of the widget didn't provide proper instructions so that Chuck Consumer wasn't aware that his three year old could be left alone with a widget. Or maybe the court says that the manufacturer was negligent because there wasn't a safety mechanism to prevent such an accident. Or maybe, the court finds that you should have known that a widget could be dangerous if a three year old child is left alone with it and that you should have warned Chuck Consumer about this when he bought the widget.

If your estore is properly incorporated and observes corporate formalities (meaning that you run this as a business and dont commingle your personal and business monies see http://www.clickandinc.com/corporate_veil.asp), even if the a judgment is granted against you, all of your personal assets are not jeopardized and cannot be touched. Thats the main reason to incorporate your business to protect your personal assets from debts and liabilities of your business.

To someone who is not a lawyer, this story I told you seems absurd. "This could never happen," I often hear people say. "A court wouldn't make such a ruling, it goes against common sense," is another thing I hear a lot. The fact is that it happens all of the time. Judges and juries do this every day. We all know the story of the woman who won millions from McDonalds because her coffee was too hot.

The bottom line is that anyone who sells goods or services online or off should be protected. An incorporation provides another layer of protection so long as you run your corporation properly. At our company www.clickandinc.com we provide our clients with the information they need to properly run a corporation and follow the correct corporate formalities. Anyone who tells you that just by filing the articles of incorporation you are protected-- is wrong. You are incorporated, but not necessarily shielded from personal liability. When it comes to incorporating online, like anything else in life, you get what you pay for. Sure you can pay $25 to be incorporated, but unless you know what to do with the stack of forms that the incorporating company sends to you, you will have wasted $25.

If you want to get proper assistance in completing the necessary documents you will have to pay more than $25. You should be able to get a complete incorporation for under $300 (not including state filing fees). That fee should include completed bylaws, completed initial minutes of the board of directors and shareholders, completed stock certificates, completed federal forms for obtaining a federal identification number (which you need to open a checking account) and S corporation election, and instructions about how to properly protect yourself from personal liability. You wont get that for $25 and if you pay more than $300 you are getting taken. Like anything, else be careful of people who nickel and dime you to death and want to sell you things that you dont really need.