Do You Need to Hire a Lawyer to Start a Business?

Starting a business can be expensive, especially if you need to hire a lawyer.. For some start-ups, one of the most avoidable expenses is hiring a lawyer. For others, hiring a lawyer can be necessary. Startomatic is here to help you answer once and for all — do you really need a lawyer to start a business?

The Legal Piece of Starting a Business

The short answer is noyou do not always need a lawyer to start a business. In fact, most new businesses can find the legal help they need online for less than $100. Let’s take a look at three common legal processes you can often DIY if you have the right tools.

1: Selecting Your Legal Entity

Is your business going to be an LLC? A corporation? Maybe you’re not really sure. You may be tempted to hire a corporate lawyer to guide you through this decision.

Do you need a lawyer to help select your legal entity? Probably not. Online tools, like a legal entity selector, can walk you through this decision — especially if you are deciding between a corporation and an LLC. Roughly 90% of start-ups will be just fine with either a corporation or an LLC.

If you decide you need to venture into the labyrinth of more “exotic” legal entities (GPs, LLLPs, PLLCs, etc.), you may be in a different boat. With fewer available resources and more intricate ownership, liability, and tax structures, you will want to make sure you fully understand what you’re getting into, so an experienced business lawyer may be a good investment.

2: Setting Up Company Ownership

For both legal and functional purposes, you’ll need to nail down the ownership of your start-up before completing your legal formation documents. This involves answering the hard questions, like:

  • Who owns what percentage of the business?
  • Who will be responsible for decision making and management?

Making these decisions is not always as straightforward as it may seem; the vocabulary and details will vary depending on the type of entity, and making changes in the future can be costly. That’s why some start-ups consider legal consultation at this stage.

Do you need a lawyer when setting up your company’s ownership? Probably not. Online resources — like this tool — can help you easily understand and select your ownership and management structures.

When should you consider paying for professional advice about company ownership? If you are taking in outside investment from professional investors, or if you need a more unusual and complex ownership structure with preferred shares or equity incentive plans, paying for legal services may be a worthwhile expense.

3: EIN Applications

When you create a company in the US, you can file for an EIN (Employer Identification Number) with the IRS. Does your company need an EIN? Yes.

Do you need to pay a lawyer to prepare and file an EIN application? No. Online solutions (like Startomatic) can help you complete this process with ease. Using an online resource comes at a small fraction of the cost delivered by a corporate lawyer. In fact, Startomatic’s EIN filing service comes at no additional cost — it’s entirely included in your subscription.

Start Your Business with Startomatic

If you’re ready to start your own business, Startomatic is here for you. We’re founders just like you, and we’ve created a one-stop solution with everything needed to launch and run your start-up. Learn 3 more legal processes you can DIY with Startomatic here. Our guides and tools can help you navigate the legal side of starting a new business — while saving thousands on a corporate lawyer. Did we mention that Startomatic is just $99 a month? Sign up today to try us risk-free for two weeks!



Investor @TweenerFund. Previously, Founder @AInsights , Co-Founder @InfiniaML, Distinguished Engineer @Cisco, Writer @OReillyMedia

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Robbie Allen

Investor @TweenerFund. Previously, Founder @AInsights , Co-Founder @InfiniaML, Distinguished Engineer @Cisco, Writer @OReillyMedia