Cheapest way to llc/merchant account?


My current startup(which consists of two) is going through incorporation, registering the merchant account and hooking it up with Braintree. I saw Jason L Baptiste's interview on Mixergy where he slightly mentioned how much they spent on LLC/Merchant account costs ... but would really like to get a nice overview of the CHEAPEST way to LLC and merchant account.

Any ideas? Thanks in advance.

LLC Incorporation Legal Legal Documents

asked Nov 1 '10 at 04:14
Emil Hajric
161 points
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3 Answers


Registering an LLC is a very simple process, and I strongly advise against paying someone else to do it for you. Your state's website should have all the information you need. Save your money for something else.

Once you've registered your LLC, you will want to create an Operating Agreement. At this point you will want to get a lawyer involved to make sure everything is in order. The cheapest way to accomplish this is to use a template to create your own Operating Agreement, and then pay a lawyer to review it for you.

I did all of this myself for our LLC, with no previous experience, and it was very simple. For our Operating Agreement, I used the Nolo book Form Your Own Limited Liability Company. The book contains a CD with two Operating Agreement templates (created by a lawyer) that you can modify for your LLC. Once you've got that in-place have a lawyer review it for you.

This is pretty much the same thing lawyers do. They already have pre-made templates they take and modify for each client. But in most cases, they'll charge the client as if they had created that agreement from scratch just for them.

For a couple of other perspectives on this topic, read this other question: Did you use an incorporation service? And if you want more details on how you can do some of these things on your own, see this other question: The process of creating a startup with three cofounders (Warning: very long answer).

answered Nov 2 '10 at 01:47
Zuly Gonzalez
9,194 points
  • I highly agree with Zuly; register your own LLC. My ex-CPA almost convinced me to spend $500 for a lawyer to create my LLC in AZ. It seemed like a lot of money, so I decided to do a little research first. I got on the AZ Corporation Commission website and in about an hour, I successfully registered my own LLC for $50! I can't believe guys charge $500 or more to do this! Outrageous! – Clint 13 years ago


In california you can file your own LLC or S-corp yourself. The fees are around $200. You do not need a lawyer. Sites like legalzoom do not do much but fill out forms available from the secretary of state's office. The annual fees in california are $800. This is a minimum tax the state charges.

As for merchant accounts Braintree is a good choice.

If you have multiple products, it makes sense to have just one merchant account.
This is how i would do it.

Form an LLC for your Parent Company.
MyWebVentures LLC

Sign up for a merchant account for
Next create your sites.

Make sure all sites state that they are owned by
Last, i would regiser a 4th domain name... for customer statements.

This could be called:
This is what i would ask briantree to print on your customers statments.
I would make a simple 1 page site that when your customers visit lists all your projects, so that they can realize what product they purchased and to keep down disputes.

Also, during the credit card processing, remind your vistors that it will show up on their bill as

The reason for putting all your products under a merchant account are:
1. Lower fees in the long run.
2. Only one monthly fee
3. Easier to manage
4. Easier to build payment history and eventually qualify for lower interchange plus pricing.

A side note on brain tree. Those guys are awesome but they typically lock you into their gateway. I would avoid this because it means you use them for your merchant account and gateway.

I am most comfortable using a merchant account + gateway. My apps use And if i switch merchant accounts, all i do is make sure i keep the same gateway username and password for it, and nothing else changes. This lets you shop for lower fees and rates as your transaction volume grows.

Last, some merchants allow for multiple descriptors (what shows up on statements) and merchant sub accounts, but they are hard to find.

I would give a call to ask for Kirk McWorther. I did a lot of shopping for merchant accounts and cannot give enough praise to these guys. Amazing service, honest, and work with you as your businesses grow. Let them know who sent ya! Best of luck.

Frank Basti

answered Nov 1 '10 at 09:21
2,079 points
  • does provide merchant accounts of its own does it not? I've been using their international branch/partner planetauthorize and the rates are decent. Also, it never hurts to use Paypal as a baseline :-) – Henry The Hengineer 13 years ago
  • No, is the gateway. But it works with almost any merchant account. The reason i suggest building your app on top of them, or any other OPEN gateway, is that if you switch merchant accounts (BANKS), then you dont have to change your code. As for PayPal, they are good for small projects that will never grow too large but since they dont allow you to do on site transactions and the potential to charge your customers recurring (different amounts) or access cc data i think they are a poor choice. – Frank 13 years ago


The cheapest way to form an LLC is to buy a book from Nolo and do it yourself. See "Can I form an LLC without a lawyer? "

Given that you have two founders, however, taking the cheapest route is not a smart move because, as that post explains, the Operating Agreement will be incredibly important.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

answered Nov 1 '10 at 13:43
Dana Shultz
6,015 points
  • Well if we're talking cheap cheap cheap, use online resources/blogs about LLCs and grab a couple of sample operating agreements from OneCLE or from Lexis/Westlaw through a friend who has access. – Henry The Hengineer 13 years ago
  • If you have no clue or your state's documentation sucks, then maybe the Nolo book is a good idea. In AZ, I got everything I needed from the Corporation Commission website ( They even have a nice FAQ and easy to follow documentation. I did call to verify something at one point and the staff was actually helpful. The biggest question/decision I had to make was whether I should register a C-Corp, S-Corp, or an LLC. My CPA answered that question. – Clint 13 years ago

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