What Does a Business Incorporation Lawyer Do?
Choosing the Right Business Structure: A business incorporation lawyer will help you decide which legal structure is best for your business, based on your goals, risk tolerance, and plans for the future. Common business structures include:
- Sole Proprietorship: Owned and run by one individual, with no separation between the owner and the business.
- Partnership: A business owned by two or more individuals.
- Limited Liability Company (LLC): A flexible structure that offers personal liability protection for owners and can be taxed as a partnership or corporation.
- Corporation (C-Corp or S-Corp): More complex structures offering liability protection for shareholders, with different taxation and regulatory requirements.
Filing Incorporation Documents:
- The lawyer will prepare and file the necessary documents with the appropriate state authorities to officially create your business. This may include:
- Articles of Incorporation or Certificate of Formation.
- Operating Agreement (for LLCs) or Bylaws (for corporations).
- Partnership Agreements for partnerships.
- The lawyer will prepare and file the necessary documents with the appropriate state authorities to officially create your business. This may include:
Obtaining Permits and Licenses: Depending on the nature of your business and the jurisdiction, there may be specific permits, licenses, or certifications required. A business incorporation lawyer will help identify and obtain these necessary documents to ensure you can legally operate.
Registering for Taxes:
- The lawyer can help your business get an Employer Identification Number (EIN) from the IRS, which is required for tax purposes and to open a business bank account.
- They will guide you on what types of taxes your business is subject to, such as sales tax, payroll taxes, and income tax, and how to handle those responsibilities.
Drafting Business Contracts:
- A business incorporation lawyer will draft and review essential contracts, including partnership agreements, operating agreements, shareholder agreements, and employment contracts. These documents define how your business will operate and protect your interests and the interests of your partners, employees, and investors.
Complying with Regulations:
- A business incorporation lawyer ensures that your business complies with state and federal regulations. They will help you navigate legal obligations, including employment laws, consumer protection laws, and industry-specific regulations (such as health regulations for food businesses, or environmental laws for manufacturing).
Liability Protection:
- One of the key reasons for incorporating a business is to protect the owners from personal liability for business debts and legal issues. A lawyer will ensure that the structure of your business offers proper liability protection.
Intellectual Property (IP) Protection:
- If your business deals with intellectual property (such as logos, patents, trademarks, or copyrights), a business incorporation lawyer can help you register and protect these assets.
Raising Capital:
- If you need to raise capital for your business, the lawyer can assist with structuring investments, drafting investment contracts, and ensuring compliance with securities laws.
Exit Planning:
- A business incorporation lawyer can help you plan for the future of your business, whether through a sale, merger, or succession planning. They will draft agreements and handle the legal aspects of any transactions.
When Should You Hire a Business Incorporation Lawyer?
Starting a New Business:
- If you're forming a new business, especially one that requires a formal legal structure (LLC, corporation, etc.), hiring a business incorporation lawyer is essential to ensure the process is done correctly.
Changing Your Business Structure:
- If you’re transitioning from a sole proprietorship or partnership to an LLC or corporation, a business incorporation lawyer can help you navigate the complexities of the change.
Legal Disputes or Challenges:
- If your business faces legal challenges—whether from competitors, customers, or employees—a lawyer specializing in business law can offer expert advice and represent your interests.
Complex Contracts and Agreements:
- If you need help drafting contracts for employees, partners, or customers, a lawyer can ensure that these contracts are legally binding and protect your business.
Tax and Compliance Issues:
- If you’re unsure about tax obligations or your business’s compliance with federal or state regulations, a lawyer can provide essential guidance.
How to Choose the Right Business Incorporation Lawyer
Experience:
- Choose a lawyer with specific experience in business incorporation and corporate law. This ensures that they understand the nuances of forming a business and can guide you through potential legal pitfalls.
Specialization:
- Look for a lawyer who specializes in business law or corporate law, particularly one who has experience with startups and business formation. They should be familiar with the laws and regulations in your jurisdiction.
Reputation:
- Research the lawyer’s reputation by reading reviews, asking for referrals, or checking with your local bar association. You want someone known for providing solid advice and offering great client service.
Fee Structure:
- Some business incorporation lawyers charge hourly rates, while others may offer a flat fee for specific services. Understand the lawyer's fee structure before signing any agreements to ensure it aligns with your budget.
Consultation:
- Many lawyers offer free or discounted initial consultations. Take advantage of this to ask questions about their experience, approach, and how they would handle your business incorporation.
Costs of Hiring a Business Incorporation Lawyer
The cost of hiring a business incorporation lawyer depends on several factors, including the complexity of the business, the type of business structure, and the lawyer’s experience. Typical pricing models include:
Flat Fees:
- For basic business incorporation, lawyers may charge a flat fee, which typically ranges from $500 to $2,500 or more, depending on the services included (e.g., filing Articles of Incorporation, creating an LLC Operating Agreement, etc.).
Hourly Rates:
- If the lawyer charges an hourly rate, the typical cost is between $150 and $500 per hour, depending on the lawyer's experience and the complexity of the work involved.
Package Deals:
- Some law firms or online legal services offer comprehensive packages that include the filing of incorporation documents, EIN registration, and advice on tax and compliance. These packages typically range from $1,000 to $3,000.
Top Business Incorporation Law Firms
Here are a few reputable business incorporation services or law firms that can help you with starting your business:
LegalZoom:
- A popular online legal service that offers business incorporation services. LegalZoom helps with LLC formation, corporation formation, and provides access to legal advice for an additional fee.
- Website: www.legalzoom.com
Rocket Lawyer:
- Another online legal service that provides business formation services, including access to business lawyers for consultations and document reviews.
- Website: www.rocketlawyer.com
UpCounsel:
- A platform that connects entrepreneurs with top-rated business lawyers for incorporation services, contract drafting, and other business law needs.
- Website: www.upcounsel.com
LawDepot:
- Offers templates and guidance for business formation, along with lawyer consultations for incorporation and other business legal needs.
- Website: www.lawdepot.com
McDermott Will Emery LLP:
- A national law firm with experience in helping startups and large companies navigate business incorporation and corporate governance.
- Website: www.mwe.com
Conclusion
Hiring a business incorporation lawyer is essential to ensure your business is set up correctly from a legal standpoint. Whether you’re starting a new business or changing your business structure, a lawyer can help guide you through the process, protect your personal assets, and make sure you comply with state and federal regulations. With their expertise, you can set your business up for success and avoid potential legal issues down the road.
