Do I Need an Attorney When I Start My Business?
It Can Depend on Factors Unique to You and Your Business
It's a question many people ask during startup of a business: When do they need an attorney? Do they need an attorney? Can they start without one and save some money, then get one later if and when a problem arises? Unfortunately, there's not one easy answer to these questions.
Your Business Type and the Need for an Attorney
Whether you need an attorney to start your business depends in large part on what legal type of business you're starting.
The simpler your business, the less you'll need an attorney.
A sole proprietorship is the simplest business form. It doesn't require that you register your business with your state, so no, you probably don't need an attorney to start this type of business. No specific paperwork is required other than local business licenses, and even that can depend on the exact nature of your business and your area's unique requirements.
Partnerships and LLCs must register with the state. Documents must be prepared, such as a partnership agreement or an LLC operating agreement. You might be able to register online with your state or use an online service to register your business, but it might be a good idea to use an attorney if your business is at all complicated.
Corporations or S corporations must register with the state as well. They must prepare bylaws and other documents, and they have a far more complicated ownership structure.
You'll almost certainly need an attorney to help you start any type of corporation, An S-corp starts as a corporation then elects S corporation status with the Internal Revenue Service. If it sounds complicated, it is. You might need help.
When You Might Need an Attorney for Business Startup
The most common reasons for needing an attorney are:
- You need help navigating the many forms and requirements of legal documents that are involved with startup, like incorporation documents.
- Having an attorney can be expensive, but you'll know that startup is being done right.
- Having an attorney frees you to focus on other aspects of startup so you don't have to spend time learning the legal processes.
- An attorney can help with specific tasks like trademarking your name, reviewing lease documents, discussing potential legal structures, and preparing incorporation forms.
- Online legal form providers don't always do it right. Businesses aren't one-size-fits-all, so blanket legal documents don't always work.
When You Don't Need an Attorney for Business Startup
- Some of the forms are simpler than you might think. For example, filing Articles of Organization for an LLC is a very simple task that you can probably handle yourself.
- You can save a lot of money, and you'll learn a lot from the process of doing things yourself.
- You can usually find free help if you need it. State and local governments can help you with forms, and there are business incubation services out there that will provide assistance. Organizations like SCORE can lead you through the process.
- Forms are available on the Internet. BizFilings and LegalZoom offer most documents, which might serve you well if your business is not particularly unique.