Entrepreneurs are a unique kind of person. They’re go-getters and are usually excited to see exactly what they’re capable of. They want to push themselves to their limits.
Sometimes though, those limits are actually forming the company they want to run. A lot of legal paperwork goes into forming any company. Not everyone knows how to form an LLC, or whether an LLC is right for them.
That’s why entrepreneurs looking to find their start in business should hire a lawyer first. Lawyers are experienced in forming many kinds of business, and they know how to work with many kinds of people. Their clients leave the offices excited and prepared for their futures, whatever may be in them.
Hiring a lawyer is also more than a way to prepare for the future. It sets people up for success early on and gives companies a formal edge against their competition.
Keep reading below to learn why you should hire a lawyer to form your LLC!
Lawyers Know What to Plan for
Do you have a plan for your business in case you end up getting a divorce? Even though it’s not something anyone wants to think about, provisions should be made in case it happens. Divorces end more small businesses than most people would think.
By talking with a lawyer before formalizing your LLC, they will go over provisions like this and many more. Lawyers plan for the future when drawing up an LLC, and they make sure it can keep going regardless of any legal issues.
Divorce is only one of the many unfortunate examples of things that can unexpectedly end a business. But the thing that ends businesses the most is simply a lack of preparation. By hiring a lawyer, you’re one step closer to securing your business’s future.
Your Lawyer Will Explain What You’re Signing
Legal documents are so full of jargon and confusing sentences that they can look like another language. Most people can’t take the time to read privacy policies when they use an app on their phone. How can they be expected to understand the mountain of documents associated with starting a business?
Luckily, lawyers speak the obscure language found on legal documents. They know how to explain LLC forms in a way that makes sense to the people running it. That way, you’ll know exactly what you’re signing.
You won’t accidentally form your tech company as a manufacturer, or anything like that. You’ll avoid many needless mistakes with a lawyer than if you try to form an LLC on your own.
It’s Their Job To Ask The Tough Questions
One of the most overlooked benefits of hiring a lawyer is that they force you to confront what it’s like to run a business. The make sure you understand the reality of running a company by asking you tough questions. Beyond asking about what you’ll do with the business, they’ll want the nitty-gritty details.
That’s because there are different things to file for if you expect to grow quickly, or want to stay small. The lawyer needs to know if the LLC will be family-owned or not, and who will play which role if it is. They’ll need to know if you plan to hire union employees or not.
While all of this should already be answered in your business plan, sometimes it isn’t. By hiring a lawyer, you force yourself to answer these questions before they become an issue.
Hiring a Lawyer Establishes a Relationship if You Need One Later
One of the biggest advantages of hiring a lawyer comes down the line. Most businesses reach a point in their lifecycle where they will need to hire a lawyer. Sometimes you may want someone to look over a contract, or you may need to file a copyright claim on something.
If you hire a lawyer to form your LLC, you’ll be creating more than a company. You’ll also establish a professional relationship with someone who has a valuable skillset. As the person who formed your business, they’ll know it better than a random lawyer you might find online.
That means thorough, quicker, and more meticulous work for you when you need it. It’s always better to work with the people you know than to risk getting someone new. Especially when it comes to something as vital as legal work!
Lawyers Know How To Form An LLC, You Can Focus On Running It
By hiring a lawyer to file the actual forming documents, you’ll be able to pay attention to other things. Rather than spending hours sifting through documents on your own, you’ll be able to actually focus on building the business. That means you have more time to interview candidates, prepare marketing materials, and anything else.
That allows you to capitalize on the early excitement you may have for your new LLC. You won’t burn out by facing the reality of paperwork and legalese that comes with running a company. Instead, you can focus on what you want to do: making money, making a name for yourself, and changing the world.
Formal Company Structure Means More Productivity
Early on, companies may lack a formal structure between employees and managers. This will always come as a cost to your overall productivity as people get confused about their roles. But if you file as an LLC formally, you’ll have a definite organization style to refer to when people get confused.
LLCs have a clear owner, which means managers and employees will always understand who leads them in the end. The person who signs the documents will have the power to make dramatic changes in the company if it needs it. That sort of power helps people understand their role in the company and can boost productivity as a result.
Do You Need a Lawyer to Create an LLC?
While it’s true that South Carolina doesn’t legally require you to hire an attorney to form a Limited Liability Company (LLC), opting to go it alone can be a classic example of being penny wise and pound foolish. The initial filing of “Articles of Organization” with the South Carolina Secretary of State might seem straightforward, and indeed, you can do it yourself online or by mail, or even through various online services. However, the apparent simplicity of this initial step often masks a labyrinth of legal complexities and ongoing responsibilities that can have significant long-term implications for your business.
The notion that “not required” equates to “not beneficial” is a critical distinction when it comes to business formation. Setting up an LLC is more than just checking a box; it’s about laying a robust legal foundation for your entrepreneurial venture. Without a comprehensive understanding of the legal landscape, you risk making costly mistakes, exposing yourself to unnecessary liabilities, and hindering your business’s future growth.
The Deceptive Simplicity of DIY LLC Formation
Many aspiring business owners are drawn to the LLC structure because of its perceived ease of formation and the limited personal liability it offers. This protection means that, in most cases, your personal assets are shielded from business debts and lawsuits. However, achieving and maintaining this protection, along with navigating the myriad of other legal requirements, is where the expertise of a business formation lawyer becomes invaluable.
Consider the analogy of building a house. You might be able to pour the concrete slab yourself, but without an architect, structural engineer, and skilled contractors, you risk a shaky foundation, code violations, and ultimately, a house that crumbles under pressure. Similarly, while you can file the basic paperwork for an LLC, a lawyer acts as your architect and engineer, ensuring your business’s legal framework is sound, compliant, and optimized for your specific goals.
Key Benefits of Partnering with a Business Formation Lawyer in Greenville, SC
Engaging a knowledgeable business formation lawyer in Greenville, SC, offers a multitude of advantages that extend far beyond simply filing a document.
1. Choosing the Right Business Structure for Your Vision
An LLC is a popular choice for good reason, offering a blend of liability protection and flexible taxation. However, it’s not a one-size-fits-all solution. A lawyer will delve deep into your unique business goals, industry specifics, financial situation, and long-term aspirations. They’ll analyze whether a sole proprietorship, partnership, S-corporation, or C-corporation might be a more advantageous legal structure for you.
This analysis goes beyond just liability; it encompasses critical tax implications. For example, while an LLC defaults to “pass-through taxation” (meaning profits and losses are passed through to the owners’ personal income without being taxed at the business level), a lawyer can advise on the potential benefits of electing S-corp status, which can sometimes lead to self-employment tax savings. They’ll clearly explain the pros and cons of each structure, empowering you to make an informed decision that aligns with your financial strategy. Without this expert guidance, you might inadvertently choose a structure that results in higher taxes or limits your growth potential.
2. Drafting a Robust and Tailored Operating Agreement
If there’s one document that stands as the bedrock of your LLC, especially if you have multiple members, it’s the Operating Agreement. While South Carolina doesn’t legally mandate an operating agreement, failing to have one is akin to navigating uncharted waters without a compass. This document serves as the internal governing roadmap for your LLC, preventing future disputes and outlining how your business will operate.
A lawyer won’t just provide a generic template; they’ll draft a custom operating agreement meticulously tailored to your specific business needs and member relationships. This comprehensive document will precisely outline:
- Ownership Percentages and Capital Contributions: Clearly defining who owns what and how much each member has invested.
- Member Roles, Responsibilities, and Management Structure: Establishing whether the LLC will be member-managed (where all members participate in daily operations) or manager-managed (where specific individuals are designated to run the business), and detailing individual duties.
- Voting Rights and Decision-Making Processes: Setting clear procedures for how major business decisions will be made, including voting thresholds and methods.
- Procedures for Admitting New Members or Exiting Existing Ones: Establishing fair and transparent processes for welcoming new partners or handling the departure of current ones, including buy-sell provisions.
- Profit and Loss Distribution: Detailing how profits and losses will be allocated among members, which can be crucial for tax purposes and member satisfaction.
- Dispute Resolution Mechanisms: Outlining a clear pathway for resolving disagreements among members, potentially avoiding costly litigation down the line.
- Provisions for Dissolution of the LLC: Planning for the orderly winding down of the business, should that ever become necessary, including asset distribution.
A well-drafted operating agreement is a powerful preventative measure, safeguarding your business and personal relationships from potential conflicts and financial risks among members. It provides clarity and a framework for addressing unforeseen circumstances.
3. Ensuring Comprehensive Compliance and Avoiding Costly Errors
Business formation involves far more than merely filing the Articles of Organization. There’s a labyrinth of local, state, and federal regulations that must be adhered to. A lawyer is your expert guide through this regulatory maze, ensuring you comply with all requirements and, more importantly, helping you avoid costly penalties or future legal challenges. This includes:
- Verifying Business Name Uniqueness and Availability: Ensuring your chosen business name is unique and available for registration in South Carolina, preventing potential trademark or legal conflicts.
- Obtaining an Employer Identification Number (EIN) from the IRS: This is essentially your business’s social security number, required for opening bank accounts, hiring employees, and filing taxes.
- Advising on Necessary Business Licenses and Permits: Every industry and sometimes even every location has specific licensing requirements. A lawyer can identify and guide you through obtaining all necessary local (Greenville-specific), state, and federal licenses and permits relevant to your industry. Forgetting a crucial permit can lead to fines, operational halts, or even the forced closure of your business.
- Understanding Ongoing Reporting Obligations and Annual Fees: LLCs often have annual reporting requirements and fees that, if missed, can lead to the administrative dissolution of your entity, jeopardizing your limited liability protection. A lawyer will make sure you’re aware of these ongoing obligations.
4. Protecting Personal Liability: Piercing the Corporate Veil
One of the primary reasons entrepreneurs choose an LLC is for the limited liability protection it offers, shielding personal assets from business debts and lawsuits. However, this protection is not absolute. Situations can arise where this protection can be “pierced,” meaning a court could hold you personally liable for business obligations. This often occurs when business and personal finances are commingled, or when the LLC is not treated as a separate legal entity.
A lawyer will provide crucial advice on best practices to maintain the integrity of your LLC and ensure your personal assets remain protected. This includes guidance on maintaining separate bank accounts, proper record-keeping, and adhering to all corporate formalities.
5. Registered Agent Services: Ensuring You Don’t Miss a Beat
Every South Carolina LLC is legally required to have a registered agent with a physical street address in the state. This individual or entity is responsible for receiving official legal documents, such as service of process (summons and complaints), as well as important tax and government notices.
Some law firms offer registered agent services as part of their business formation package. This ensures that you never miss a critical legal or tax notice, which could otherwise lead to default judgments, penalties, or other detrimental consequences for your business. Relying on a professional registered agent service adds another layer of compliance and peace of mind.
6. Addressing Complexities: When Your Business Isn’t Simple
If your LLC involves multiple partners, complex asset structures, unique ownership arrangements, or if you anticipate seeking institutional financing (like venture capital or bank loans), a lawyer’s expertise becomes not just beneficial, but indispensable. These scenarios introduce layers of complexity that generic online services or DIY approaches simply cannot address.
A seasoned business attorney can anticipate potential issues, mitigate risks, and draft agreements that precisely safeguard your interests and the interests of your co-founders. They can navigate intricate negotiations, structure equity distributions, and ensure your business is attractive and legally sound for future investors.
7. Long-Term Planning and Proactive Risk Management
The relationship with a business attorney doesn’t end with the formation of your LLC. A good business lawyer serves as a valuable, long-term resource for your ongoing legal needs, offering proactive advice that can save you significant time, money, and headaches down the road. They can advise on:
- Intellectual Property Protection: Guiding you through the process of securing trademarks for your brand name and logo, and copyrights for original works, protecting your creative assets and competitive edge.
- Drafting Employment Contracts and Policies: Ensuring compliance with labor laws, clearly defining employee-employer relationships, and establishing fair workplace policies.
- Contract Negotiations: Reviewing, drafting, and negotiating various business contracts, such as vendor agreements, client contracts, and partnership agreements, to protect your interests.
- Business Succession Planning: Helping you strategize for the future of your business, whether it involves selling the company, passing it down to family, or other transition plans.
- Mitigating Legal Risks: Proactively identifying potential legal pitfalls and advising on strategies to minimize exposure, thereby enhancing your business’s overall resilience.
An Investment, Not an Expense
While the state of South Carolina doesn’t legally require a lawyer to form an LLC, viewing legal assistance as an unnecessary expense is a common misconception. In reality, engaging a business formation lawyer in Greenville, SC, is an investment in the long-term health, stability, and success of your venture. They provide invaluable guidance, foresight, and protection that can prevent costly mistakes, ensure compliance, and allow you to focus on what you do best: running and growing your business.
Attempting to navigate the complexities of business formation without professional legal guidance can expose you to unforeseen liabilities, legal disputes, and operational inefficiencies that far outweigh the initial cost of attorney fees. By entrusting your LLC formation to a Greenville SC business formation lawyer, you’re not just getting a legal document filed; you’re building a solid, compliant, and secure foundation for your entrepreneurial dreams.
Hiring a Lawyer Will Set You Up Quickly, So You Can Get Right to Business
Knowing how to form an LLC effectively can take years of work and practice. Setting up a company for success means understanding it intimately, as well as the people running it. It means knowing where problems may lie and confronting them immediately.
It also means navigating a bureaucratic maze of legalese and jargon. Most people don’t have the time or willpower to do that. Entrepreneurs just want to get to work, not sift through paperwork.
That’s why hiring a lawyer to form your LLC places you at an advantage.
So contact us, and we will ensure that you’re set up with an LLC that lets you focus on what you do best: running a business. We look forward to hearing from you!
