If you're finally taking a leap out of the rat race and going into business for yourself, you may be wondering about the bureaucratic and regulatory hoops you'll need to jump through in order to bring your business to life. Do you need to incorporate your business, and if so, what business structure should you choose? Is this something you can do on your own, or will you need a small business lawyer? Read on to learn more about when to enlist an attorney's help in incorporating your sole proprietorship, LLC, partnership, or another small business.
What Is Required for Business Incorporation?
Each state has its own set of policies and procedures that govern business licensing. In most states, the Secretary of State or equivalent executive office issues business licenses and otherwise administers and supervises businesses within the state. To incorporate a business, you'll usually need to provide a set of documents (including articles of incorporation, a charter, and information on your principals and designated agent) to the Secretary of State's office, which will then issue you the relevant incorporation documents.
After you've incorporated, your registered agent will serve as the liaison with the Secretary of State in the event you need to provide additional information in the future. The registered agent will also be the person to accept service of legal documents if your business is sued or audited by the state. It's important to take note of all relevant deadlines, since failing to file or update documents within a certain time period can result in the suspension or cancellation of your business license.
How Can an Attorney Help?
For many, putting together the necessary documents to incorporate isn't terribly complicated, especially if you're a sole proprietorship and don't need to worry about dividends or distributing profit among partners. But an attorney can be incredibly helpful when it comes to deciding what type of business structure offers the most advantages, especially after the enactment of the Tax Cuts and Jobs Act. Certain businesses have more favorable tax structures than others, so if you're interested in growth and want to preserve as much profit as possible, choosing one of these structures can mean more money in your pocket.
In a similar vein, if you're going into business with others, it's crucial to explore your various liability-limiting options. If the business goes south, you don't want your personal assets to be "on the hook" for a partner or co-owner's actions, so evaluating the protections offered by an LLC, LLP, or other limited-liability company is a good idea.