It is common for aspiring entrepreneurs and business owners to ask if an attorney is necessary when creating a Limited Liability Company (LLC). While it is quite possible to undertake the procedure, going for an attorney for this task has plenty of advantages.
Incorporation of a limited liability company (LLC) is the path that most entrepreneurs and small business owners take in their ventures since it gives legal self-protection against debts and suits albeit being a comprehensive and restrictive approach. And while it can be as simple as it sounds, one may ask, do I need a lawyer to help me in this process?
This is what you need to understand to make this major decision:
Comprehending the Process of Forming an LLC
Forming an LLC in the United States requires the following essential procedural steps that guarantee that any such business entity is well organized and adheres to local statutes:
1. Selecting A Name For A Business:
Any name you use for your LLC has to be unavailable in other businesses registered in your state.
Before anything else, remember that whatever business you come up with, to come up with a business name: do remember there are certain state regulation specifications regulations that you need to adhere to, such regulations might be in using ‘LLC: or Limited Liability Company within the name and certain words cannot be used since they are associated with more complex business forms}
2. Filing Articles of Organization:
Here you will find the document that all states need to officially register an LLC, the Articles of Organization or Certificate of Organization. The articles provide crucial details such as the name and address of the business and information about its members or managers among else.
It is important to acknowledge that there is a variation of the filing procedures and fee subdivisions for each state hence one should understand the particulars of his or her state.
3. Creating an Operating Agreement:
Insisting on a written operating agreement is not always legally necessary, however, it remains advisable since it stipulates how business ownership and management within an LLC will be carried out.
It gives an understanding of who has what responsibility, and how the profits or losses will be shared, that is the decisions on the addition or deduction of members to avoid quarrels later on.
4. Obtaining an EIN (Employer Identification Number):
The EIN which stands for Employer Identification Number is a number assigned by the Internal Revenue Service to enforce tax compliance among other functions such as starting a business account, hiring employees, and paying taxes, etc.
One can submit an application for the EIN on the IRS web page where the procedures are quite easy and in most cases can be done through the internet.
5. Complying with State Regulations:
Another important element that each member of the LLC should not forget is that adherence to state statutes is necessary to keep the LLC properly functioning. This involves applying for all relevant licenses and permits applicable to professional practice and geography.
Moreover, take note of the annual assessments, annual filings, or other specific purposes such as filing annual reports or paying certain fees to keep your LLC active which becomes non-compliant when such provisions are not adhered to.
When You Might Not Require The Services Of An Attorney
1. Simple Business Structure
If the members of your LLC do not have a lot of complexity in their ownership and management issues, then you can probably be able to form it by yourself. This is mostly true for single-member LLCs or those wherein only a small number of members agree to terms on how the management will be run.
2. Clear Understanding Of The Laws Of The State Where You Operate.
Every state has its requisites that must be satisfied for anyone wishing to form an LLC to do so. However, as long as one is prepared to read such policies, it is possible to go through this process alone without any assistance. Most states have extremely detailed websites that walk you through such actions.
3. Availability Of Online Formation Services
There are so many online companies that help a person to form an LLC as Easyfiling, and LegalZoom in most cases. Such platforms give you the required actions one after the other and ensure that necessary papers that need to be lodged have been done for you.
4. Budget Limitation
Getting the legal advice of an attorney can indeed cost a lot of money. Since you are now starting with little money, it would also be wise for you to do the formation by yourself to minimize the expenditure. Nonetheless, such savings may not be worth it considering the risk of making mistakes in your paperwork.
5. Readiness to Accept Change
There is a certain amount of legal and administrative learning that comes with the process of forming an LLC. If someone is ready to take the time to learn the necessary legal principles and procedures, one can start an LLC on their own without a lawyer.
Advantages of DIY Limited Liability Company
Reduction of expenses: Do not use money to pay for legal services and use that money for other business activities.
Ownership: Have control over the formation process and all critical decisions.
Business education: Obtain the necessary structural understanding and legal information.
Risks to Consider
As much as doing it yourself when forming an LLC has several merits, there are risks:
Mistakes and Errors in Documentation: Errors in the submitted paperwork result in delays or legal complications.
Oversight of the Legalities: Lawyers will offer further advice on legal areas that may vary from state to state which you may not be aware of.
Complicated Situations: If your business has numerous members, people contributing as investors, or features out of the ordinary, professional legal advice may be essential.
When You Should Consider Hiring an Attorney
1. Complex Organizational Structures:
Where there are numerous owners of the LLC, different percentages of ownership, and/or complex ownership arrangements, it is good practice to seek an attorney’s help when drafting wording to be included in the operating agreements as to the management of the LLC and sharing of profits. In the long run, this will help reduce incidences of conflicts and make the magnets operate freely.
2. Legitimate Business Operations:
Certain areas such as healthcare, finance, or food provision have strict guidelines that need to be adhered to. Hire an attorney who will determine whether your LLC is compliant with all legal, business, regional, national, and international norms set so that in the end, you do not land into problems that arise due to law-breaking.
3. Commercial Documents:
Legal documents for your business are always purchased off the shelf as they include contracts and other business papers commonly used in business relations. Where and when needed, an attorney can handle more sophisticated work such as drafting documents like non-disclosure, employment, and partnership agreements which offer significant protection to the business.
4. Dispute Resolution:
When it comes to the conflicts and activities of members or any legal difficulties, it is always advisable to have an advocate who understands the business structure. Such lawyers will participate in mediation or negotiate on behalf of clients hence the parties will avoid the legal process, which is costly and time-consuming.
Advantages of taking an Attorney’s Services during the incorporation of an LLC
1. Adequacy in Legal Methods
Lack of knowledge of laws in the formation of an LLC leads to formation issues. Laws exist for every state and therefore an attorney dealing with business will understand them. They can ensure that every form is filled up as required and all the documents forwarded, eliminating situations of idle time or refusals.
Key Benefits:
- The timely preparation and filing of Articles of Organization
- Assistance in state laws and compliance matters
- Common mistakes are avoided
2. Tailored Operating Agreement
The operating agreement is the blueprint of the management and operational details of the LLC. While the law allows the use of normal templates, an advocate will be able to provide normal templates that will cater to all the situations and requirements that the client will face, thus securing his interests and decreasing the possibility of conflicts in the future.
Key Advantages:
- Terms that are specific to the features of your business
- Well-defined roles and responsibilities among the members
- Measures for resolution of disputes and making of decisions
3. Legal Advice on Business Structure
The choice of the structure of Business is critical for tax & liability, and operational purposes. Personalized legal advice can be provided by an attorney regarding how suitable an LLC is to the business and the objectives it aims to achieve.
Key Advantages:
- Knowledge of the best business structure to be chosen in all situations
- Knowledge of liability issues and tax issues
- Planning for activities in the future and the possibility of some changes
4. Adhering to Federal and State Laws
In addition to state laws, there are other laws at the national level and at the city level that may apply to your LLC. An attorney will assist you in undertaking these legal obligations efficiently and without owing the government.
Key Advantages:
- Help in acquiring required licenses and permits
- Understanding of employment legislation and regulations for the respective sector
- Continuing support on legal compliance to mitigate legal risks.
5. Protection of Intellectual Property
Business involving the production of certain products or services, or having business with certain brands, requires protecting one’s intellectual property such as that of the business. An attorney may assist in the acquisition of trademarks, patents, or copyrights for the business to prevent its assets from infringement.
Key Benefits:
- Attainment of valuable intellectual property rights through their recognition, safeguarding, and commercialization.
- Strategic planning and submission of the IP Applications.
- Countering the claims of the third party through defensive actions.
6. Fewer threats to lawsuits
Starting your own business also means talking to a lot of people and signing a lot of agreements. An attorney can also seek the review of all contracts and other documents that may be binding to your business to reduce factors that would lead to litigation as much as possible.
Assorted Benefits:
- A skilled approach to analyzing and bargaining contracts
- Legally consistent agreements with vendors, clients, and partners
- Considering how to manage and limit the risks and resolve conflicts
7. Peace of Mind
The greatest advantage of hiring an attorney is the fact that, as a business owner, you can relax in the knowledge that your business is safe legally. Delegate the legal necessity of incorporating the business with an attorney, so that you can devote your time to your business.
Assorted Benefits:
- Comfort that the law is being observed and the business interests protected
- Lowering stress and time no longer associated with legal work
- There is backing as the business grows from a reliable counselor
An Alternative of Incorporating an LLC with an Attorney
In case you want another way of incorporating an LLC with an attorney, then using Easyfiling will suffice. Easyfiling gives you a cheap and easy way of forming an LLC without having to pay through your nose to employ an attorney.
Why Easyfiling is the Best Alternative for LLC Formation:
Cost-Effective: Easyfiling.us has very relatively reduced costs for incorporating an LLC compared to employing an attorney, with upfront pricing and no surprises.
User-Friendly Process: There is an easy-to-follow platform that takes you through each step needed and the necessary documents and procedures needed for the incorporation of an LLC.
Expert Guidance: Easyfiling gives users the possibility to enjoy professional assistance and makes sure all the documentation necessary for the LLC formation has been completed correctly.
Quick and Efficient: Using Easyfiling implies that you can form your LLC effortlessly and efficiently even without the long waits that are associated with conventional legal services.
Compliance Support: This is a service that also provides compliance support services so that you are not behind on state obligations such as, but not limited to, annual report submissions, and so on.
Conclusion
Many business owners like you can register an LLC without any assistance. Most of them have basic businesses and are ready to put an effort into learning. However, it is very important to reasonably determine how much risk are you willing to take. If you believe that you can do it, why not do it by yourself? If this is not the case, feel free to get professional help immediately to do everything properly.
Nabin Adhikari
