What I Learned from Personal Experience
Starting a business can be really confusing. Figuring out the right structure for your business is also really confusing. You can do research on the Internet until you are blue in the face and likely go down a never-ending rabbit hole. Here is a really simple summary of what I learned that helped me answer the question “do I need a lawyer to start an LLC?”
First question, what structure of business do you want to start? Honestly for this one I recommend taking advantage of a free 30-minute consultation with a start-up lawyer and get their advice. You can look around online but will just end up confused. You should also do a quick chat with your accountant. If you think an LLC or C-Corp might be for you, here is a quick helpful read I found on WMN Legal.
If you’ve decided an LLC is the right structure, this is what I would do next (or at least what I did):
- Find a good start-up lawyer to help you draft your Operating Agreement. In many states, you are required to file an Operating Agreement when you file your Articles of Incorporation with the state (for example, in NY it is required but in CA it is not).
- Operating Agreements are complex beasts and there is so much that goes into an Operating Agreement that you absolutely cannot, DO NOT, use a template agreement found online (some legal websites have form Operating Agreements – I repeat, DO NOT USE THESE!)
- For example, how you will govern your business, how different classes of equity are treated, voting rights, how decisions are made, what happens to your company if you die or if something bad happens… (morbid I know but you gotta have this in there)
- This is an incredibly important document and you need to be smart about this!
- Depending on which start-up lawyer you work with, some lawyers will charge you a flat fee for a package to create all your LLC’s organizational documents and also do the filing as part of that package.
- Other lawyers will create your Operating Agreement for a fee and then do the filing for a separate fee. Doing the actual filing can be pretty simple. Depending on what your lawyer charges, you could also look at a company like RocketLawyer.com. For a few hundred dollars, they will handle filing your Articles of Incorporation and you can also add on a service to have a company like RocketLawyer.com get your EIN (Employer Identification Number aka your Tax ID).
- Using a company like RocketLawyer.com to do the filing could be your simplest and most affordable bet BUT you need to have all your other documents, like Operating Agreement, to be compliant.
~ Contributing WMN Member
Disclaimer: The above article was not written by a lawyer and not intended to be used as legal advice. Thinking about starting an LLC? Talk to a real lawyer! See how WMN Legal can help.
Posted In: Legal Tips