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

1: Selecting Your Legal Entity

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

  • 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

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

Now: Co-Founder Startomatic.com Previously: Co-Founder InfiniaML.com, Founder AutomatedInsights.com