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Home Q&A Forum Why hire a lawyer for LLC formation?

Small Business

LLC

Texas

Asked on Oct 25, 2023

Why hire a lawyer for LLC formation?

I am a small business owner looking to form a Limited Liability Company (LLC). I am aware of the various steps involved in forming an LLC, such as filing paperwork with the state, but I am unsure of the legal ramifications and potential risks associated with this type of business structure. I am seeking advice from a lawyer to understand the legal implications of forming an LLC and to ensure that I am taking the necessary steps to protect my business and my personal assets.

1 Attorney answer

Answer

Small Business

Texas

Answered 257 days ago

Michael C.

ContractsCounsel verified

Business Lawyer
Licensed in Minnesota
Free Consultation

Here are some of the key reasons why it can be beneficial to hire a lawyer when forming an LLC: - Expertise navigating legal requirements - Forming an LLC involves meeting specific legal and regulatory requirements under state law. A business lawyer can help ensure you take all the necessary steps to properly create and register your LLC so that it obtains legal recognition and protections. - Assistance with operating agreement - Lawyers can draft a customized operating agreement that outlines the ownership structure, member responsibilities, profit/loss distributions, voting rights, and other rules governing your LLC. This agreement is important for establishing how your LLC will operate. - Advice on tax implications - LLCs can choose different tax treatments (like being taxed as a sole proprietorship, partnership, S-corp or C-corp). A lawyer can help you understand the tax implications of these options. - Ongoing legal advice - After forming the LLC, you may need guidance on legal issues like liability protection, employing workers, licensing, contracts, intellectual property, etc. A lawyer can provide trusted counsel. - Compliance with regulations - Lawyers stay up-to-date on all current LLC regulations and can help ensure your LLC remains compliant as laws evolve. Non-compliance can result in penalties or loss of LLC status. The bottom line is that an experienced business lawyer can help you avoid potential mistakes when forming an LLC and provide ongoing guidance to maintain the legal protections an LLC provides. Their expertise makes the lawyer fees worthwhile for many small business owners.

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