Why You May Need an Attorney to Incorporate Your Business
It costs HOW much to form a corporation? Can’t I just do it myself? What about those online companies on the radio that tell me to form an LLC? Do I really need a lawyer to form your corporation?
If you are forming an LLC because that’s what your brother-in-law did, or you are forming a corporation because you never heard of an LLC, you probably need someone you trust to explain what’s going on and WHY you should make the entity decision.
If you guess wrong or pick an entity without really understanding it, the fallout can be tax penalties, unprotected personal assets, no limited liability and lost peace of mind. You may not understand what it takes to properly form and maintain the entity, or you may not be suited to the level of formality you have arbitrarily chosen.
The difference between a good business attorney and any kind of do-it-yourself option is that we are allowed to make a recommendation. The online services and form books cannot offer any legal advice, such as whether you should be an S-corp or an LLC. (Did you know that only citizens and green-card holders can own S-corp stock? Is North Carolina a state that allows single-member LLCs?)
Forming an entity without legal counsel works best for single-member entities that don’t expect to bring in additional owners or outside capital, hire employees or set up multiple locations (particularly multi-state locations). It may also make sense to set up your own entity if you had an attorney set up a prior entity, and you are following a similar business model, with the same people as before, and nothing has changed in any of their lives. In reality, of course, every deal is different, people change, laws change, and the structure that you used last year may not be the best structure this year for this situation.
In addition to advising you on the proper business entity and completely and properly setting it up, good business attorneys will connect you to other reputable professional service providers — bankers, accountants, insurance agents, financial planners and web designers. We know where to send you for free or low-cost business services to make sure your business plan is sound, or to get training on Quick Books, marketing, sales or hiring employees. We will make sure your ongoing filings with the Secretary of State are current and that the corporation is holding requisite annual meetings. In short, we take an ongoing professional interest in your success.
Bottom-line: if the initial organization is not done correctly and completely, or if you choose the wrong form of entity or state of incorporation, the costs to unravel the errors greatly exceed the savings of “doing-it-yourself.”