When to Hire an Attorney to Start An LLC
Hiring a LLC attorney can save time and prevent headaches when creating an LLC. Typically, the costs of hiring a business lawyer range from $200 to $5,000. While a business owner may be hesitant to open his or her wallet, there are benefits to having a lawyer on one’s side during the organization process. A lawyer can deal with administrative issues that a business owner may be too busy or nervous to manage. These include:
Creating the LLC Operating Agreement
An LLC operating agreement explains how a company will be run once it is registered. It is an internal document that lays out the company’s rules, as well as the rights and responsibilities of members. In some states, this document is a legal requirement.
Creating LLC Articles of Organization
Articles of Organization is a document that lists the LLC’s management structure, the date of the company’s formation, and the registered agent. It is essentially an overview of the company’s basic information that is filed with the state.
Acting As the LLC’s Registered Agent
An LLC will need to appoint a registered agent in order to be created. A registered agent is a person who agrees to receive legal forms and tax documents on behalf of the company. They are also responsible for service of process, which means that they notify the business when someone is filing a lawsuit against it. As part of their business formation services, some lawyers offer to serve as registered agents for a client company. This means that they will receive an LLC’s legal documents at their physical address. This is a nice benefit, because it allows a business to move locations without missing or losing important documents.
Keeping LLC Records
An LLC lawyer can help form an LLC and also keep detailed records. This is important in the event the business ever faces a lawsuit or audit. A business owner may be too busy managing the company to keep track of these kinds of details, which is where a lawyer comes in handy.
LLC Filing
An LLC lawyer can also file fees and register information with the correct parties. Again, this saves a business owner the headache of figuring out things on his or her own.
Registering a Business Name
Naming a business is not quite as simple as it seems. A name not only needs to express the company purpose and values, but it must be unique and available for use. This means that it cannot already appear on the Secretary of State’s naming database. Essentially, no two companies in the state can have the same name. This can be a headache for a business owner, and it is a space where a business attorney can help. Let’s say the owner has an idea for a name. He can tell his LLC lawyer the name, and the lawyer will do all the leg work, checking its availability and any similarities to other businesses.
Filing LLC Documents
A LLC lawyer will make sure that all important LLC registration is properly done. This means that he or she will complete and file all legal and formation documents with the appropriate departments, whether the Secretary of State or the IRS.
Depending on the attorney, some firms offer online services for starting up an LLC, while others may have a set fee. Other firms may offer consulting, or advice on particular matters, for a small fee.
If the company in question is small and being run by just a few people, then most likely an owner can incorporate an LLC on his or her own with few problems. However, if the company has many people and partners involved, complex assets, or financing, then it may be a good idea to hire a business lawyer to guide the owners through the organization process.
Finding a Lawyer After LLC Formation
Perhaps an owner is able to start an LLC with any difficulty on his or her own. Great! But let’s say he or she runs into problems down the road, or needs advice related to running the new business. This is an opportunity to bring on board a business lawyer experienced in getting LLCs up and running, as well as ironing out any kinks. A business owner in this position may want to consider the following types of attorneys.
- Employment lawyer: creates employment contracts and HR policies
- Intellectual property lawyer: reviews a company’s products and services to ensure they are protected
- Tax lawyer: reviews income tax and tax returns
- Business lawyer: helps an owner change the business structure to an LLC, S corporation, or another business type. Can also help review business contracts or other business matters
- General lawyer: reviews state law compliance, state fees, and annual fees
- Real estate lawyer: advises on commercial leases or real estate purchases
While handling these matters on one’s own will save money, a lawyer can be a good investment in the long run when problems inevitably arise. That said, a business owner should choose only what he or she needs and can afford. Perhaps they can consider bringing a lawyer on board when the business is making a profit.
In sum, a business owner is not legally required to have a lawyer to register an LLC. However, if an owner is having trouble with the registration process or has other business-related questions, then hiring a lawyer to start an LLC is a good call and can save time and money.
