• Tanya S Osensky

You don't need a lawyer to register a new company, but you might want one

Registering a company is easy. Anyone can do it without a business lawyer.


But the registration is just the first, simple step. That’s the formation of the company.


What most people don’t realize is that the company is not in effect until the second step has been completed, which is the organization of the company. This step is completed by the owners by having their initial organizational meeting and signing operating agreement and the organizational resolutions.


At about that same time, they will want to obtain a federal Tax ID number (or EIN) and most likely a state Tax ID number. There might be some other things, like permits or licenses, depending on the type of business and where it will operate.


These, too, are fairly straight forward things. Many examples of organizational resolutions are available online and it’s easy to get tax ID numbers online. Anyone can figure these things out if they really want to.


Many Secretary of State filing departments and state tax offices are helpful. They will not give any legal advice, although they will explain what to file, where to file and how much to pay.


Also, organizations like SCORE are very helpful. SCORE is a nonprofit organization that provides mentoring to small businesses and startups, it stands for Service Corps of Retired Executives, and it’s a great place to go for help on a variety of concerns that small business owners have. Again, they will not give legal advice.


No, you don't need a lawyer to register a new company. In most, if not all, states, the Secretary of State website has an online form that’s a very simple process. There are also online services who will do the same thing, fairly inexpensively – usually a few hundred dollars plus the state filing fees.


DIY and online services are good choices for solo founders on tight budgets. But even so, I work with a lot of solo founders. They hire me for lots of reasons:


1. Only a lawyer can give legal advice

2. You may want to be absolutely sure that things are done right

3. You may be too busy to figure everything out on your own to save a little money

4. You may want to establish a relationship with a business lawyer right away because you will have questions and needs as the business grows


When you hire a lawyer to form a company, it’s not just the formation service you’re paying for, it’s the legal advice.


Oh, and working with a lawyer becomes much more important when a business has multiple founders. More on that next time!

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