Do You Need a Lawyer to Incorporate?

There are so many do-it-yourself kits and guides for how to incorporate that a lot of small business owners assume that they don't need a lawyer to do it.

Unfortunately, this is one of those times when assuming makes an... well, it makes you look bad.

It's true that some people will be able to navigate the incorporation process without a lawyer, but most of those DIY kits make the process look like an easy cut-and-paste job. If you fall into that mindset, you may just be begging for problems in managing your business down the road.

Here's why:

Incorporation documents aren't just a one-time activity. They lay out the structure and purpose of your company going forward.

If you start the business with someone, your incorporating paperwork will dictate how much of the business each person owns and what to do if someone wants to sell. Your governance structure and bylaws are also in that paperwork.

You could always make changes later if needed, but that's easier said than done.

To change a company's bylaws or articles of incorporation, certain procedures must be followed and the changes must be filed with the state. You'll be charged for the additional filing.

Do-it-yourself kits aside, a dedicated business person could research how to incorporate a business and put together the paperwork without an attorney.

That might be a good idea if you don't have the funds to get a professional. But hiring an attorney to help you incorporate is about more than just launching a business.

The real thing companies lose out on when they don't consult with a lawyer about how to incorporate is the relationship with a business attorney. That relationship is invaluable down the road when real legal issues come up, such as taxes and employment.

Additionally, if you incorporate without help and things go wrong, it can be hard to undo the problems you've (inadvertently) created for yourself.

You may end up having to start from scratch, this time with an attorney to help. That's a waste of time and money that could be saved through the upfront cost of hiring a professional.

If you need to save money and have the time to do it right, incorporating without an attorney can be done. But if you want your company's incorporation documents to stand the test of time, it's worth investing in a lawyer from the start.

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Related Resources:

• Checklist: Starting a Corporation (FindLaw)
• Incorporating Your Business: Pros and Cons (FindLaw's Free Enterprise)
• You Just Incorporated Your Business. Now What? (FindLaw's Free Enterprise)