Do I Need a Lawyer To Start an LLC?

Forming a limited liability company (LLC) is the process of taking your startup or small business idea and turning it into a legal business entity. Your LLC will give you tax benefits and shield you from personal liability if anything happens to your company.

LLCs provide advantages over sole proprietorships and general partnerships. Their structure gives limited liability protection to the business owner and members, shielding you from personal liability for your business’s obligations. Once you register as an LLC, you can buy or rent a building and open company bank accounts. Unfortunately, your company can also be sued.

There is no legal requirement to hire an attorney to form an LLC. Most states allow LLC formation by registering the business entity on your secretary of state’s website. Small business owners who file the paperwork themselves spend on average $50-$500 to register a new LLC.

However, forming and running an LLC can be complex. That’s where a lawyer comes in. This article provides a brief overview of when to hire an attorney to help with forming your LLC.

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When To Use an Attorney for an LLC

A business attorney can save time and money when business owners create a new business. For around $200 to $5,000, they can handle the items you may not have time to consider, which may include:

• They can create articles of organization that list the registered agent, LLC management, and the date of formation.

• They can create an LLC operating agreement explaining your company’s who, what, when, where, why, and how, as required in some states. An LLC operating agreement is an internal document that allows you to establish company rules, lay out members’ rights and responsibilities, and more.

• They can serve as your company’s registered agent. A registered agent is a person or business entity who receives legal documents, tax forms, and service of process for your company. Service of process is when someone notifies your business that there is a lawsuit pending against your company. Some law firms will act as your registered agent as part of their business formation services. As your registered agent, they will collect your legal correspondence at their physical address. This frees you up to move locations or use a post office box without missing essential documents.

• They can keep detailed records in case of lawsuits or audits.

• They can file fees and register with the correct people.

• They can register your business name and check that the LLC name is available.

• They can complete and file all legal and formation documents.

• They can apply for an employer identification number or business license for your LLC.

• They can keep your LLC compliant with state laws to keep your LLC in good standing.

Some attorneys also offer online services or set fees to help you form your company. Others may ask for a small fee for business law consulting services to ensure you are on the right track.

If your LLC is just a few people or there are relatively simple assets, then you will likely be able to do much of the process on your own. If your LLC involves multiple people or partners, bank financing, complex assets, or other concerns, then you can prevent many issues by consulting with an attorney first.

Bringing an Attorney in After Forming Your LLC

After forming your LLC, there are several reasons why you might hire a lawyer again. For instance, you might want help creating employment contracts and policies within your Human Resources Department. You might need a lawyer to help review your products or services and ensure your intellectual property is protected. When tax season comes, you might need a lawyer to review your income tax and tax returns to ensure you aren’t leaving money on the table.

If you decide to change your business structure, you might need a lawyer. You might also need guidance when it comes to compliance with state laws, state agencies, state fees, or annual fees. Lawyers can help with that. If you decide to lease commercially or purchase real estate, an attorney can help with that, too.

Choosing a DIY approach to many of these services will save you money upfront. Finding out you made a mistake, could have saved money, or could have been better protected in the long run is a concern for new business owners. Decide what you need and can afford. Consider having an attorney look things over when the business is making a profit if you cannot afford it right away.

Making the Call on Attorney Assistance for Your Own LLC

If you need legal advice when creating your business, talk to an experienced business formation attorney to save you time and prevent mistakes along the way. If you prefer the DIY approach, you can use our trusted partner, LegalZoom for LLC formation services.