LLC attorney: How they can help your business and how to find one

Bookkeeping

What is an LLC?

A limited liability company (LLC) is a business structure in the United States whereby the owners are not personally liable for the company's debts or liabilities. So for instance, if someone files a lawsuit against your business, they can only take business assets if they win. Your personal assets are safe. Other benefits of an LLC include tax flexibility, an easy startup process, flexibility in how to organize management, distribution flexibility, minimal ownership restrictions, and increased credibility compared to sole proprietorships.

To establish an LLC, you need to file paperwork with the state you are operating in and comply with federal and state regulations to maintain your status as an LLC.

What do LLC lawyers help you with?

Utilizing an LLC structure for your business has many advantages as mentioned previously. However, there is a lot of legal paperwork you need to keep up with and file to establish and maintain one that is compliant with state laws. In addition, LLC laws and regulations vary from state to state. You may run into trouble with your local tax authority or secretary of state if you don’t properly understand your state’s requirements.

Having an LLC lawyer can help you with the following:

  • Determine your business’s eligibility for LLC status in your state
  • Decide which state to register in, especially if your business operates in multiple states
  • Examine whether an LLC is the best business structure for your organization including reviewing tax consequences
  • Filing your application and filling out the articles of organization, a document required when filing in your state to establish an LLC
  • Negotiating and creating funding agreements for your LLC investors
  • Ensure compliance with securities and exchange commission requirements for investor money
  • Outline an LLC operating agreement, a document that provides the foundation of how your LLC will be managed and how decision will be made
  • Maintain important LLC paperwork such as meeting minutes and member agreements
  • Help you understand state-specific LLC requirements and how to remain compliant

An LLC lawyer can be very helpful especially for a new business owner who may not be familiar with the different rules and regulations that come with operating an LLC. It can also be helpful to consult an attorney for owners with a complicated business situation such as having multiple owners, operating in multiple states, and desiring investment money.

Is an LLC lawyer required?

It’s possible to create and maintain your LLC on your own. However, if your business grows or if you’re a new owner, you may desire hiring a lawyer as it can be time consuming to keep up and familiarize yourself with state laws.

Where do you find an LLC lawyer?

There are many business attorneys to choose from as you can tell if you performed a quick google search, but you want one that has experience working with LLCs, is familiar with your state’s laws, and understands your business goals. The following is a list of some ways you can find a LLC lawyer that is qualified.

1. Speak to other business owners in your area

Obtaining recommendations from other people who have created a business recently or obtained legal help with a business matter may often be the best way to find an attorney. If they are satisfied with their lawyer, then the lawyer may be a good fit for you as well. Ensure that they are knowledgable about your industry too.

2. Search local bar associations and online legal directories

Bar associations have online legal directories where you can search for a lawyer based on their focus. You will need to look for attorneys that have experience in business or startup law experience. Legal aid groups and nonprofits can also match you with local lawyers for free or minimal cost.

3. Online legal services

Another way to obtain legal services for your business without paying too much is through online legal services. You can utilize sites with forums to post legal questions at low or no cost and get a response from an attorney within a few hours.

How do I evaluate an LLC lawyer?

From the many options out there, it can be difficult to determine whether the lawyer is a good fit for your business. Here are some questions to help you evaluate a potential lawyer during an initial consultation:

  • Are you licensed in the state where I want to register my business?
  • Do you have experience working in my industry?
  • What is your fee structure?
  • How long will it take to finish this task I’m asking you to complete? (May affect fee especially if they charge hourly.)
  • What is your client base? Are they mostly small business owners?
  • How many years of experience do you have working with small business owners/ startups?
  • Can you discuss LLC tax consequences and options?

What can an LLC lawyer ask me?

When you’ve chosen a lawyer that is a good fit for you, they may ask you some questions. Be prepared to answer questions such as the following:

  • When do you want to launch your business? (if you are new)
  • What states do you plan to operate in?
  • What are some names you want for your business?
  • What’s the current business structure?
  • Have you filed for an employer identification number (EIN)?
  • Do you want to raise investor money?
  • Do you have permits and licenses needed to operate?
  • Do you want to hire employees?
  • Do you have other business partners? Have you discussed duties and responsibilities?

How much does an LLC lawyer cost?

The cost of an LLC lawyer can vary widely depending on what legal work you need them to perform and their payment structure. Lawyers can charge anywhere from $500 to $3000 to file and draft LLC formation papers. Others may charge on an hourly basis with average fees of $100 to $300 for document review or drafting. Many lawyers provide free initial consultations that you may want to take advantage of to understand how the lawyer works and a general idea of whether they will be a good fit for you.

Online legal companies are much more affordable, but you will mostly be filling out paperwork on your own. These companies only assist and so this can leave you more prone to errors.

You may not wish to hire an LLC lawyer due to costs. However, it is important to also weigh in the potential savings you can obtain from having one. By following the laws of your state, you can avoid any penalties and fees. Also, when you file for an LLC, you will have to pay a nonrefundable fee to the secretary of state. If your application is rejected you will have to forfeit the fee. Having an attorney help you fill out the application properly the first time may help you save money on fees. You will also save time that you can spend on other business ventures to improve your profits and growth.

Whether you should hire an LLC lawyer?

Having an LLC lawyer by your side can be very beneficial especially in the first few years of your business. They can ensure compliance as you grow, help raise money, and hire employees.