Why a start-up should use an attorney to help form their business structure from “This Week in Startups”

Here’s a question I often get: should I use an attorney when first form my company, or should I go with a web-based service, or should I do it myself?

Typically, I’d recommend that you use an attorney. Web-based products tend to shoehorn young companies into a corporate structure that doesn’t make sense and they typically do not leave you with follow-up advice on the corporate formalities for maintaining personal liability protections (if you do use an online service, make sure you sign up for one that promises a local attorney). And I do not recommend a DIY approach, there are still ins and outs of corporate formation and governance that I have to research. It’s better to pay a little up-front and get it right than to get it wrong and have to pay more to cleanup a legal mess. Finally, hiring an attorney comes with the added value of bringing that person into your startup’s network. Attorneys are well connected to other professionals and talent that may prove more valuable than the actual amount you spend on the legal work. Let the company founders focus on what they are good at instead of a lot of the admin that comes along with starting a company. With payroll outsourced you won’t have to worry about the legalities of your payroll system. And your attorney can cover you for the rest of your legal infrastructure within your business so you’re compliant with state and federal laws.

But don’t take it from me to hire an attorney, listen to Jason Calacanis’s advice in this episode of “This Week in Startups.”

Like Jason recommends, use a startup attorney to help get you going, or else be comfortable paying significantly more in legal fees for potential cleanup work down the road.

For more information on this subject click here.


Peter J. Smith is a partner at the Apex Law Group. For more information on this post, feel free to leave a comment or email peter at peter@apexlg.com

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