If you are planning on starting a business, one of the things you will decide before registering it with the state is the type of business structure to choose. A business structure refers to how a business is legally organized. The type of structure you choose can have an effect on how your business is regulated, taxed, and more.
A limited liability corporation is one structure that is very popular because it combines the best parts of corporations, sole proprietorships, and partnerships into one business structure. An LLC offers owners liability protection, private asset protection, and certain tax advantages as well as a flexible management structure.
Any person who is starting a business or owns a business as a sole proprietor should think about forming an LLC, especially if you are worried about limiting personal liability for debt or judgments.
While hiring an attorney is not legally required to form an LLC, an experienced entity formation attorney can advise you on the benefits of incorporating and whether forming this type of business entity is a good fit for your business. In addition, an attorney can assure that you meet all of the legal requirements needed to properly register your business as an LLC.
Avoid mistakes and save money
Many people starting a new business are concerned about spending the money needed to hire an attorney for LLC formation — so they often decide to take the DIY route instead. While online DIY entity formation services are available, you will not have the opportunity to ask questions that can materially impact your ability to maintain control of your business in the future. That’s why enlisting the services of an LLC formation attorney can save you time and money in the long run, especially if your new business involves multiple people.
In the state of California, there are numerous forms that need to be completed. If the documentation submitted to the state is not accurate and/or contains errors, this could result in a significant delay in starting your business. An experienced LLC formation attorney will help minimize problems and ensure that your LLC paperwork is complete and filed correctly the first time.
Furthermore, an LLC formation attorney can confirm whether your profession allows for the use of an LLC. In California, certain licensed professionals are prohibited from forming an LLC (e.g., law firms may not incorporate as LLCs in California).
In setting up an LLC company, it is essential to discuss the requisite licensing for your planned business activity before opening your business. An experienced attorney can help gather licensing information and determine what is required at the state and local levels of government.
Set a foundation for your business to grow on
A skilled LLC attorney can help you write an operating agreement that establishes the rights, obligations, and duties of the members of your LLC; in other words, how your business will be run and how all members will share in the profitability and capitalization requirements.
Creating an organizational structure that is clear about who is in charge will help your business run without any hitches. An LLC attorney is valuable when developing the specifics of the organizational structure for your business.
At the Leo Law Office, located in San Diego, we provide business formation and corporate legal services. We will assist in the formation of your new business and provide continued guidance and support as your business moves forward.