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