Having a legal business entity reduces the company’s risk of liability exposure. A business formation lawyer will ask you various questions to determine what kind of business you should form. In addition to these topics, they’ll ask about corporate governance issues, such as minutes, meetings, and how to operate your business. Your business may lose its liability protection if you do not form it appropriately or incorporate it.
What Is a Business Formation Lawyer?
Liability exposure and other vital aspects of business entity selection under state laws that lawyers advise clients on include:
- Sole proprietorships;
- Corporations;
- Partnerships (general partnership or limited partnership);
- Limited liability partnerships (LLPs);
- Limited liability companies (LLCs);
- C-corporations; and
- S-corporations.
What Does a Business Formation Attorney Do?
Business incorporation benefits your company by providing:
- Limited liability;
- Tax advantages;
- Unlimited duration;
- Transferability of ownership;
- Raising capital.
Incorporating a business usually requires the following assistance from the best business formation lawyer near you:
- Choosing a C-corporation or an S-corporation for the company;
- Choosing a corporate name that distinguishes it from others registered in the state;
- Articles of incorporation and appointment of a registered agent;
- Drafting corporate bylaws that lay out the company’s rules;
- Electing directors and officers;
- Issuing stock;
- Developing operating agreements; and
- Creating a partnership agreement (if necessary).
Small businesses that incorporate are usually closely held corporations, exempt from most regulations. However, you should still get a lawyer’s opinion. If the corporation issues stock, a lawyer can make sure the corporation complies with the securities laws and regulations.
When to Hire a Business Formation Lawyer?
When you decide and form your own business entity, there are multiple steps you can take to get started. It may become necessary for you to consult a lawyer once your business has reached a later stage, such as when you decide to hire employees. It is important to keep in mind, however, that if you are uncertain about anything during the process, hiring a lawyer could help you avoid costly mistakes.
How Do I Choose a Business Formation Attorney?
Businesses should contact lawyers and learn about their basic services and rates in the initial consultation to determine whether they are a good fit for them. By understanding the law firm’s rates, you can budget accordingly and ensure that when you need their services, you can afford them.
- Decide what type of lawyer you need;
- Make sure you choose the right size firm; and
- Assess whether proximity to your business is important to you.
Prior to hiring a lawyer, do some preliminary research and determine when you wish to hire and who is the best fit for your business.
Because every business law situation is different, it’s hard to provide a quick answer. It is a great idea to speak to a business lawyer about your concerns.
What Is the Business Formation Lawyer Average Cost?
The best business formation attorneys near you usually charge an hourly fee for their services. This fee is generally determined by several factors. Among them are:
- Legal experience;
- The complexity of each case;
- Rates in your community; and
- The firm’s size.
Law firms providing legal services to small businesses charge different fees. Smaller firms tend to charge less per hour than larger ones. For example, an attorney may charge a higher hourly rate for court work versus a lower rate for research. An hourly rate of $150 to $325 is typical.
Do Business Formation Attorneys Usually Charge for Consultations?
When you meet with the lawyer, you will be charged an initial consultation fee. This first meeting is not meant for legal advice. A lawyer’s initial consultation is usually charged at an hourly rate, at a reduced rate, or for free. This is a great step for getting your questions answered prior to beginning an attorney-client relationship.
