Hiring an LLC Attorney vs Hiring an Online LLC Service

Last updated on: May 23, 2022

Opening a new business is not only a happy event but also an exciting one. If you want to relieve yourself of some responsibilities, there are several options that can simplify the process. For example, you can entrust the paperwork to a qualified LLC attorney, whose knowledge and skills will be a serious advantage. However, you can also rely on one of the professional online companies to register your business. Both these options allow you to form an LLC quickly and efficiently, but each of them has some significant differences you should keep in mind.

In this attorney vs LLC formation service review, we will outline the pros and cons of these methods of launching limited liability companies, as well as the cases where one is preferable.

What Does an LLC Mean?

A Limited Liability Company (LLC) is a formal business structure, which combines the features of sole proprietorships, general partnerships, and corporations.

One of the most popular reasons why many people today decide to open an LLC is its limited liability, which guarantees protection of the property of its members. As with a corporation, the owners of an LLC are not liable for its obligations and debts. If the company is sued, then, regardless of its financial status, the creditors’ claims will be limited to the company’s assets. The owners’ personal property, like homes, investments, and cars, will not be affected.

Another significant advantage of an LLC which many entrepreneurs appreciate is the tax flexibility. Most LLCs are taxed as sole proprietorships or general partnerships. In practice, this means that business income and expenses are reported on the owners’ personal 1040 tax returns and/or Schedule C. The company itself does not pay federal taxes and is required to file a tax return on its own behalf. 

However, the owners of an LLC may apply to the IRS to switch to the corporate tax treatment.

An Attorney vs Online LLC Service

Undoubtedly, professional support during the process of starting an LLC plays an important role. The services of an experienced LLC lawyer can be vital. However, LLC formation companies also help get LLC for business and make the company’s operations easier by providing a variety of additional features.

Let’s take a closer look at the strengths of each of these options.

Pros of Hiring an Attorney to Create an LLC

  1. In-depth knowledge is one of the main advantages of hiring an attorney, which is difficult for online companies to compete with. While most services just handle the business formation process, an attorney can consult you on the peculiarities of each state and business structure. This allows you to better understand the specifics of your company and choose the best structure for it;
  2. If you hire an attorney, you can be sure that your business will be established in compliance with all legal requirements. This is especially useful for those who plan to do business in the state that has additional LLC startup requirements;
  3. When your business involves complex legal issues concerning a patent, copyright, intellectual property, or trademark issues, it will be a good idea to hire a lawyer. This will help protect your privacy and provide quality legal support for your LLC;
  4. Experienced attorneys can advise not only on legal but also on tax and financial issues;
  5. Although there are many free contract templates online, they tend to be of a uniform nature. Instead, a business attorney will draft a detailed and personalized document for your LLC. The quality of the paperwork provides a high level of protection for the rights, legitimate interests, and reputation of the company;
  6. If you create an LLC with multiple employees, it’s important to comply with all legal requirements. Unlike online companies, an attorney can help with such things as:
  • The specifics of federal and state labor law;
  • Tax deductions;
  • Requirements for the workplace of employees;
  • Principles of equitable management, allowing the company to avoid possible lawsuits for discrimination.

Pros of Using an Online LLC Service

  1. Compared to hiring an attorney, online company formation prices are more affordable. You won’t have to spend hundreds or even thousands of dollars, plus mandatory government fees. Furthermore, some of these companies allow you to save money by including free features in their service packages. For example, an online LLC formation service like IncFile provides you with a free LLC and free registered agent service for one year; 
  2. The process of ordering services through the website is very simple and takes about 15-20 minutes. As a rule, you only need to enter basic personal and business information, as well as choose a set of services you want, and pay. An online company will take care of the rest. This approach not only guarantees that your business startup proceeds smoothly, but it also saves you time and energy;
  3. Top online companies of the industry create dozens of businesses every day. Because of their extensive experience, they have well-established working procedures. The turnaround time offered by most of these services is directly related to the state. Sometimes, you can even get your LLC formed in just a few days;
  4. Client support is a strong argument for online companies. Unlike lawyer’s fees, it is absolutely free of charge. At the same time, the quality of service in some companies is quite high. For example, Northwest Registered Agent’s customer service is widely known for its customized and professional approach. Each of its clients is provided with a personalized corporate guide they can contact directly throughout the entire process of starting a business. Of course, their help is not as comprehensive as that of attorneys, but the representatives are well-versed in business matters;
  5. Finally, hiring an online company gives you access to a variety of additional features, which can be either paid or free. Many services offer help with such relevant issues as:
  • Annual reports;
  • Foreign qualifications;
  • Amendments;
  • Licenses and permits;
  • Templates library;
  • EIN;
  • Online dashboard, etc.

Which Is the Best Option for Your Business?

There is no universal answer to the question “Which is better?”. Depending on the circumstances and specifics of your business, the services of an attorney as well as online companies can have both advantages and disadvantages. To determine which option is preferable in your case, you need to take into account all the nuances and consider everything carefully before making a decision.

To begin with, you should decide on a budget. Many startup owners have limited resources and cannot spend hundreds or thousands of dollars on an attorney. On the other hand, hiring an online LLC formation service is affordable even for small businesses. You can easily find many companies whose prices are less than $100. There are even several services which can launch a new business for free, as long as you pay the state fee.

Another important factor is additional services. Do you want a free Operating Agreement or one year of free LLC registered agent service? Maybe you need help with annual reports? Then your choice is a professional online company. Focusing on business needs, you can choose the service package with the best price and content.

However, the high cost of hiring a lawyer can be justified if the field you have chosen is strictly regulated, and there are many requirements to meet when setting up a business. In addition, a qualified business attorney who understands the legislation can be helpful if your business involves more than one state. 

After all, hiring a lawyer is the best choice for those who want to be absolutely sure of the quality of the company documentation. A lawyer will carefully work through all the necessary materials, taking into account your business specifics, to reduce possible risks and to fully meet your interests.

How To Choose the Right Attorney or Online Formation Service for an LLC?

If you want to hire a professional but don’t know how to find an attorney for an LLC, there are several appropriate ways to do this. 

First, you can ask your friends or co-workers to make a decision based on their recommendations and experience. 

Additionally, consider contacting a bar association or using one of the numerous websites, such as Rocket Lawyer or LegalZoom. They are reputable online services, which offer a whole range of legal services for both businesses and individuals. LegalZoom has a tremendous track record in starting and setting up businesses. Since opening, it has helped register two million business entities. As for Rocket Lawyer, its website states that the company has served a fantastic 20 million customers to date! This is certainly impressive, so you can confidently entrust your company’s legal issues to any of these services.

For those who prefer to consider all options, there is the Avvo online lawyer directory. It is a handy tool that allows you to quickly find an attorney who meets all the criteria you need: price, location, experience, etc.

If your choice for LLC formation is a professional online company, the lack of options is the last thing to worry about. The modern Internet marketplace is overflowing with dozens of offers. Various services promise significant time and effort savings by offering favorable service packages and valuable additional features. It is much cheaper than the attorney’s services, and years of experience and thousands of customers guarantee a high-quality result.

Below we have prepared the top 3 best LLC formation services in the industry. By hiring one of these companies, you will get a good service for forming an LLC under the most attractive conditions.

  1. Northwest Registered Agent: This company is for those who are looking for premium customer support and value a personalized approach. Instead of traditional call centers, its clients get a personal corporate guide to keep direct contact with. Moreover, Northwest provides a full year of registered agent service, which is recognized as the best in the industry. This is the only company that will scan all the documents it receives on your behalf, not just the legal minimum. Its price is $225, but it really is a great investment in the future of your business;
  2. ZenBusiness: Its starter package is only $49+state fee. You will get a quickly formed company as well as one year free registered agent service, and a free Operating Agreement template. This is a good deal at a very low price because the overall value of the services provided is much higher. A registered agent is essential for every LLC, and having an Operating Agreement helps to make its work more stable and comfortable. 

Overall, ZenBusiness is a good option to consider. It has an excellent reputation and thousands of reviews from satisfied customers;

  1. IncFile: This company offers its starter package for $0, which gives you a unique opportunity to order the formation of an LLC for the price of the state fee. In addition to assistance with filing the Articles of Organization, you will also receive a full year of registered agent service and a lifetime company alerts system. IncFile has many great customer reviews and high ratings.

Wrapping Up

Every business is unique and requires an individual approach. Of course, hiring an LLC attorney or an online LLC service is more preferable than a DIY method, but choosing one of these options requires careful consideration. Depending on the situation, each may have pros and cons that should be taken into account when making a decision.

Hiring an online company will be a good choice if you plan to start a small business. For example, opening a new LLC with one member or with several members, but with an equal distribution of ownership interests. It is a simple process that can be handled quickly and efficiently by a professional service. You can save a couple of hundred dollars and get a great result. 

An online company will also be a perfect fit if your budget is limited, but you want to hire a professional to help you set up your LLC. It will allow you to avoid any hassles and significantly reduce expenses, making it possible to allocate funds more efficiently.

On the other hand, an experienced attorney is an indispensable assistant with deep and diverse business knowledge. If you want to open an LLC in the state with strict requirements, or if you have any doubts or questions, you can discuss them during the consultation. A lawyer will help set up your company in such a way that it brings you maximum benefit and meets all the requirements of the law.

Senior Business Tax Writer, etc
Jean Wilson Murray
(323) 789-5289
Senior Business Tax Writer, etc
Jean Wilson Murray

Entrepreneur, investor, financial commentator

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