LLC Lawyer: Everything You Need to Know
An LLC lawyer who has prior experience with LLC filings and maintenance is crucial if you’re considering starting a limited liability company, or “LLC.” 3 min read
2. Advantages of a Limited Liability Company
3. Disadvantages of Forming a Limited Liability Company
An LLC lawyer who has prior experience with LLC filings and maintenance is crucial if you’re considering starting a limited liability company, or “LLC.” An LLC lawyer can help you decide whether or not an LLC as a business structure is right for your goals for the business and can also make sure you file all the necessary documents completely and on time. Despite the stigma that attorneys charge an unreasonable hourly rate, often, consulting one can help your business and save you money in the long run. Thus, instead of waiting to hire an attorney when faced with a serious legal issue, you might consider hiring an LLC lawyer at the beginning to avoid those potential legal problems.
However, there are certain aspects of forming an LLC that you are probably quite capable of handling on your own. For instance, some fairly simple requirements include:
- Writing a business plan and corporations">Articles of Organization
- Choosing a name for your business
- Running an LLC business name search
- Buying a domain name for your businesses website
- Applying for an employer identification number, or “EIN”
- Applying for any licenses or permits the state requires
- Submitting the required Internal Revenue Service (IRS) forms
Other requirements of forming an LLC are more complex, and thus, it is advised that you consult an LLC lawyer. For example, you should consider hiring a lawyer to help with:
- Crafting contracts for use between the business and its clients, or between the business and independent contractors
- Any legal action taken by prior, current, or future employees concerning anything workplace related
- Any legal action taken by a municipality, state, or federal entity that might claim your business has violated the law in some way.
- An environmental violation
- Negotiations related to the sale or acquisition of your business.
Advantages of a Limited Liability Company
A limited liability company can be thought of as a combination of a partnership and a corporation. Similar to a partnership or sole proprietorship, an LLC is a “pass-through” entity, which means that the LLC is not a separate entity for tax purposes and LLC owners only pay taxes on their business’s profits once, on their personal tax return. This avoids “double taxation,” which corporations are subject to.
An LLC is like a corporation in that it provides its owners protection from any personal liability for the business’s debts or legal liability. The business’s assets are separate from the assets of the LLC’s owner. In essence, it shields the owners from being held personally liable for any of the business’s misconduct and also protects the personal assets of the owners — like their homes or their cars — that creditors will only be able to reach in very narrow circumstances. Those circumstances include if an LLC’s owner or shareholder engages in any illegal or unethical activity.
There is also far less paperwork required and more flexibility when forming and maintaining an LLC. You can create customized documents that fit the needs and goals of your business, as opposed to being required to file rigid types of paperwork that are required if you form a corporation.
Disadvantages of Forming a Limited Liability Company
While all the above benefits of forming an LLC make it seem like the perfect business structure, there are some downsides to it. For instance, if you are a start-up company and are looking for investors to help get your business off the ground, it will likely be harder to find initial funding as an LLC. Investors are more attracted to corporations due to the lower risk and ease of buying stocks. LLCs are not structured in a way that allows the owners to issue stock, which means that becoming an owner is far more complex than in a corporation. Thus, if you are a business owner and would one day want to take your company public, an LLC is not the best way to go.
In addition, because an LLC is not subject to double taxation, an LLC owner has to pay self-employment taxes, which can add up.
If you need help finding a lawyer to assist you in forming an LLC, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law, and average 14 years of legal experience, including work with, or on behalf of companies like Google, Menlo Ventures, and Airbnb.