Can You Set Up a Corporation Without a Lawyer?
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The most important decision revolves about the type of business structure you should be setting up. That is really the reason you need a professional's advice.
While setting up a corporation without the help of an attorney is possible, you may want to take a look at all of the variables before deciding to embark on this adventure since there are long-term consequences. Aside from a corporation being a different legal entity than a partnership, LP or an LLP, there are different legal structures within the corporate form as well.
Different Types of Legal Structures for Corporations
You must first decide whether a C-corporation, S-corporation, or an LLC is the right business entity for you. While you can do this research on your own, a professional knowledgeable in corporate formation can give you the ins and outs of the benefits and drawbacks to each type of corporate structure, and be able to help you determine which entity will fit your needs. Each of these entities will have different fees and administrative expenses, restrictions, and tax implications. Where the stakes are high or consequences immediate (i.e., loss of corporate status), the most prudent course is to consult an attorney early on to determine which legal business structure is best.
Steps to Take After Choosing a Legal Structure
After choosing a legal structure, you will have to appoint your directors and file the Articles of Incorporation. While there are many do-it-yourself kits that will allow you to file these on your own, the downside is that these kits will not be able to give you legal advice through the process of filling out the forms. The head of the corporation must also create the corporate by-laws or the rules of the corporation.
By-laws are necessary to ensure that your corporation is protected. While research is available through books, you may feel more comfortable discussing by-laws with an experienced attorney who will be able to guide you depending on the intricacies of your business. Further, if you plan to hire employees, incorporate in one state and do business in another, get funding from outside investors, sell shares of stock, or open multiple business locations, the formation of your corporation will be more complex. For these reasons, getting an attorney’s help in guiding you through the process is highly recommended.
Do-It-Yourself Corporation Kits
If you plan to form a single-owner corporation, and have used an attorney to form a corporation in the past, and want to set up a similar corporation using the same model, then the do-it-yourself process may work for you. As with anything else, including hiring a lawyer, you should research any do-it-yourself kit or book that you use, and make sure you are getting a reputable product. Otherwise, to avoid making mistakes that could be detrimental to your business and more costly in the long run, you should contact an experienced business attorney for advice.