Whether you need an attorney to start your business depends in large part on what legal type of business you are starting. The simpler the business, the less need for an attorney. Let’s look at the various business legal types:
Sole proprietorship – This business type doesn’t require you to register with a state. You probably don’t need an attorney to start this business type, since no specific paperwork is required, outside of any local business licenses.
Partnership or LLC – These business types must register with a state. Other documents must be prepared, like a partnership agreement or LLC operating agreement. You may be able to register online with your state or use an online service to register your business. If your business is at all complicate, it’s a good idea to use an attorney to help you start these business types.
Corporation or S Corporation – These businesses must register with a state, must prepare bylaws and other documents, and have a more complicated ownership structure. You almost certainly need to use an attorney to help you start these business types. (Note: The S corporation starts as a corporation then elects S corporation status.)
- If you are being sued, it’s too late. Most small businesses put off hiring a lawyer until the sheriff is standing at the door serving them with a summons. Bad mistake. The time to hook up with a good business lawyer is before you are sued. Once you have been served with a summons and complaint, it’s too late–the problem has already occurred, and it’s just a question of how much you will have to pay (in court costs, attorneys’ fees, settlements and other expenses) to get the problem resolved.