There is no shortage of resources on the web for people looking to start a business. A significant portion of these resources deal with what type of company structure your business should have. However, if you are committed to making your business succeed, you shouldn’t try and DIY your incorporation or rely on some low-cost, online service. You owe it to yourself and to everyone you will do business with in the future to get professional help with this important step. Here are nine reasons why you should contact a business formation attorney before choosing a company structure.
1. Your Situation is Unique
Your business is not like anyone else’s. Your personal situation is unique to you. Checklists, static articles, and algorithms can never replace the expert advice you get when dealing with a lawyer who has the knowledge and experience to know exactly what you need.
What worked for someone you know or for someone you read about may not work for you because of things you may not even be aware of. You and your business deserve to find the right structure for your situation.
This is particularly true for startup companies that are often on the cutting edge of their industry and have intellectual property concerns and complex investment structures.
2. Save Time
How much time are you willing to invest in making the right business entity choice? It takes significantly more time and study to fully understand all of the legal ramifications of the different types of business entities than it does to research and buy a car or a house.
When you retain a lawyer to help you with your incorporation decisions you save time on research. Your lawyer can efficiently guide you through the process. When you work with a local attorney from the beginning you also avoid having to pay extra money and waste more time having to pay a lawyer to fix earlier mistakes. It is always cheaper and faster to do it right the first time.
3. Get an Outside Perspective
There are a lot of steps involved in starting a business. It is easy to develop tunnel vision .You have a goal and you just want to get things done. But, this kind of intense focus has a dangerous downside. You often aren’t able to see problems heading your way until it is too late.
When you meet with a lawyer to talk about the best legal structure for your business you are getting valuable advice and feedback from an experienced and knowledgeable resource who has a broader perspective than you do. They are also not emotionally invested in your business the way you are.
Getting an outside perspective can help you avoid problems down the road. Your lawyer will help start your business on a solid legal foundation.
4. Learn From Other People’s Mistakes
Even if you have started dozens of businesses, you haven’t worked with as many businesses as a lawyer. Having a lawyer advise you on business entities gives you access to the mistakes dozens of other businesses have made. Your lawyer has seen businesses make all kinds of different mistakes.
When you hire a lawyer you get to learn from the mistakes of others without having to endure the costly consequences.
If you are making decisions about your business structure by yourself you can only draw on your own limited experiences.
5. More Than Taxes at Stake
Often people are getting advice about incorporation from a CPA or business advisor. However, while certain corporate structures can help you be more tax efficient, there are a lot of other factors to consider as well.
You will want to make sure your assets are protected, that your company structure is flexible enough for you and any partners when it comes time to distribute profits, and that your structure will allow you to run your business the way you need to in order to succeed.
A lawyer will help you understand the pros and cons of the different company structures, not just the tax consequences.
6. Establish a Professional Relationship
If you are going to build a business that will last, you are going to need the services of a business lawyer in the future. When you form a professional relationship with a lawyer from the very start of your business, you will have a trusted advisor you can reach out to who already understands your business when you run into different issues later on.
7. Risk Management
Many times businesses that fail to consult with a lawyer during the incorporation stage run into unforeseen complications years later. These complications can range from finding out that they never actually incorporated at all to discovering that the initial operating agreement is defective.
Working with a lawyer from the start mitigates the risk of serious business structure problems exposing the company to serious legal liabilities.
8. Custom Solutions
Lawyers can get very creative when crafting a custom solution to a business structure problem. If you are doing things on your own or you are using an online service you may limit yourself to a handful of options. Often none of the fill-in-the-blank documents will provide the security and flexibility that a custom solution created by your lawyer for your business will have.
9. Peace of Mind
When you work with an experienced, knowledgeable business lawyer, you know that everything is being done correctly. You can focus on the business side of your company while your lawyer handles all of the legal issues. You can have the peace of mind that your business has the right structure and that all of the support documents will protect your interests.
Have a question about starting, structuring or restructuring a business. The lawyers at Walsh Banks Law have the expert knowledge and experience necessary to provide effective legal advice and representation for a broad range of corporate and business related legal matters. To speak with one of our business attorneys about your specific situation call us at (407) 259-2426 or Schedule a Consultation.