How Important Is A Business Lawyer When Starting An LLC?

The world of corporate can be very tricky from time to time. Especially with the changes in rules and regulatory practices, it can be very easy to get into legal trouble if you do not know the right business structure to choose.

From filing the papers to getting the right name for your business (note: you can also discover Aaron Kra’s ideas for your company name), a business lawyer who specifically deals with LLCs can be of great help.

In this article, I will talk about the following things:

• The laws related to an LLC.
• Do you need a business lawyer for LLC?
• How can an LLC lawyer help?
• What are the restrictions when forming an LLC?

Additionally, I will also talk about some of the questions that people also ask when forming an LLC with or without the help of a lawyer. So, if these are some of the things that you want to know, keep on reading this blog till the end…

What Are The Laws Related To An LLC?

A Limited Liability Company (LLC) is primarily a business structure that offers business owners limited liability protection. In such a business structure, the company or business will be seen as a separate legal entity. Therefore, their personal assets will not be affected as a result of their business debt or any other lawsuit. 

According to the Internal Revenue Service (IRS), the type of business structure depends on the state, as different states have varying regulations. However, what remains constant irrespective of state policies is how the structure of an LLC works.

“Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship,” according to Investopedia. Additionally, the owners of the business are called members.

Besides, the IRS states that there is no maximum limit on the number of members. However, there is also the possibility of having a permit called the “single-member” permit, which is typically issued to companies that have only one owner.

To be safe legally, you must be aware of the laws related to forming an LLC. Besides, the IRS clearly states that there is a certain set of special rules that are dedicated to an LLC.

As an example, a domestic LLC with not less than two members is considered a partnership under federal income tax provisions until it files Form 8832 and, by that act, chooses to be treated as a corporation.

Conversely, for income tax purposes, a single-member LLC might be classified as “an entity” from which it is disregarded as separate unless it files Form 8832 and an election to be treated as a corporation is made.

How To Know If You Need An LLC?

This is a question that most people keep searching for the answer to. Not every business structure is for everyone. For instance, in one Reddit thread that I came across, where the author wanted to know if they should register as an LLC, a user answered:

“I would recommend you become an LLC when you think you’ll be working with other companies.”

Additionally, LegalZoom mentions that not everyone needs an LLC. Some might stick to sole proprietorship, while others would need to form a corporation. They state that there are several companies which are “organized as LLCs because an LLC offers many of the same liability protections as a corporation but with a less rigid structure and fewer administrative requirements.”

What Are The Restrictions When Forming An LLC?

Typically, there are no restrictions when it comes to forming an LLC. As long as you have a business and that is in compliance with every regulation mandated by the government, you are free to organize your company as an LLC.

However, in some states, the members need to be at least the age of 18 in order to be eligible to structure their business as one.

Do You Need A Business Lawyer For LLC?

You do not necessarily need a lawyer to form an LLC. However, it is best to get legal help when you are new to the corporate world. These legal professionals are the ones who can help you when it comes to making the process smoother.

Considering the fact that there are a variety of decisions that you will have to make, having a lawyer by your side will ensure that you take the right step. These attorneys will be able to provide you with reliable legal advice.

Experts generally recommend that entrepreneurs seek the advice of a lawyer if their LLC is going to be more complicated. If you don’t know whether it would be better to have a member-managed or manager-managed management structure, or if you should take an S corp, a lawyer will help you decide the advantages and disadvantages of each one.

Additionally, a lawyer will be able to help you with several things, from filing a patent to operating a business that is in a difficult regulatory environment.

Read Also: What is a MSB License: Know the Legal Authorization for Your Business!

What Is An LLC Lawyer?

An LLC lawyer is a professional who specializes in every step of forming an LLC. They help you with processes like:

• Formation.
• Compliance.
• Legal matters with the structure.

These lawyers are the ones who have the knowledge to help you decide whether your business should be an LLC or you should stick as a traditional corporation.

Apart from that, these legal professionals also help you ensure that you know how to:

• File articles to organize.
• Remain in a positive situation with the state policies.
• Draft an operating agreement for an LLC.

Additionally, from which bank account you should open to which business licenses you should seek, these lawyers will be able to provide you with the best advice.

How Much Does An LLC Lawyer Cost?

The price of an attorney for an LLC is very fluctuating. However, you should be prepared to spend $0 (assuming the first consultation) up to more than $1,000 per hour for complicated work.

Additionally, some services may be with fixed rates like $300–$1,000 for contract drafting or $500–$1,500 for website terms and privacy policies. Several essential elements that affect the price of a lawyer include the lawyer’s proficiency and location, the complexity of the legal issue, and the lawyer’s charging system (hourly, retainer, or flat fee).