It may be tempting to incorporate your business without the guidance of a business attorney when you’re under a great deal of financial stress. After all, you’re not required to hire an attorney to structure your business, and you could really use that money for other things. However, deciding not to hire a PA LLC formation attorney comes with significant risks that could cost you much more than the financial expense of hiring an attorney.
Transitioning a sole proprietorship to an LLC or other business structure requires drafting several detailed documents correctly. Without the proper knowledge, it’s easy to prepare and file these documents improperly. A lawyer could save you money in the long run by helping you choose a corporate structure and filing the necessary paperwork.
What It Means to Incorporate Your Business
When you form a corporation, you establish your business as a legal entity responsible for its debts and financial obligations. Running your business as a limited liability company (LLC), C-corporation, or S-corporation will protect your personal assets from being used to pay your company’s debts or legal fees in the event it is sued.
Once you incorporate your business, you must adhere to several corporate formalities. These rules and guidelines often include conducting business under its own name, holding annual meetings with shareholders, separating business finances from the owners’, and keeping accurate financial records.
How an Attorney Can Help With the Incorporation Process
Incorporating your business is an intricate process, which is why it’s beneficial to hire an attorney to help you through each step. Here are the top advantages of hiring a business lawyer to incorporate your small business:
Your Attorney Will Help You Select the Right Corporate Structure
You cannot simply choose to incorporate your business. You will need to select from several types of corporate entities, including LLCs, limited partnerships, and limited liability partnerships. An attorney can ensure you choose the right structure for your business by presenting the benefits, drawbacks, and costs of each option.
Your Business Attorney Will Ensure Your Business Is Registered With the Right Government Agencies
When incorporating your business, you are required to register your small business with a few different government agencies. An attorney can handle these registrations and help you avoid fines for failing to register your business properly.
Your Lawyer Will Help You Follow All Corporate Formalities
Your business is not fully incorporated simply because you filed the proper articles of incorporation with the Secretary of State. Rather, you must follow all required corporate formalities for your business to maintain its status as a legal corporate entity. A lawyer will help you understand all these rules and regulations to ensure you’re operating your business correctly. If you fail to adhere to any of these rules and regulations, you lose your liability protection and could be held personally liable for business debts.
Your Lawyer Will Provide Guidance on Tax Questions
When incorporating your business, you can choose to make certain elections, such as the S-Corp election, with the IRS. These elections can help you reduce your tax liability. An attorney will ensure you take advantage of any corporate tax laws that could benefit your business.
Is Hiring a Business Formation Attorney Necessary?
The greatest benefit of hiring an LLC formation attorney in New York, Pennsylvania, Delaware, and beyond is that they will ensure your business is set up properly and well protected. Your attorney will also be able to provide more detailed legal advice as they were with your business from the start.
To get started on the incorporation process, contact Garibian Law Offices today.