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Why should I hire an attorney to form my LLC?

A: The short answer is that you don't have to.  Indeed, with internet-available resources, prospective business owners can quickly and with minimal cost obtain standard form documents to form an LLC.  However, while financially attractive, such an approach comes with two dangerous costs.

First:  significantly increased risk.  Even the formation of a relatively simple single-member or multi-member LLC can involve important legal and tax issues that are far from obvious to persons not specifically trained in LLC law and tax.  These may include, for example, issues about member dispute resolution, social security tax minimization and allocation of profits and losses.  Misunderstanding or omitting key operating agreement provisions risks not only future lost time and assets, but the potential complete failure of a business venture.

Second: the loss of operational flexibility.   As noted, the most appealing aspect of the LLC is its contractual nature.   Members can structure each unique business as finely as desired to match their goals and risk tolerance.  Generally, this can only be achieved through counsel with an experienced legal advisor.  By definition, a standard form agreement cannot completely achieve the specific goals of varied business owners - and drafting alternative provisions without a proper precision can expose members to endless negative unintended consequences.

Using standard legal forms is dangerous because contracts are prepared for specific purposes and one size does not fit all.  Allowing attorneys to review and prepare the contracts that will have a big impact on your business will save you money in the long run.

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