It is possible to form your own corporation without a lawyer’s help. Every day, many entrepreneurs do exactly that by using online incorporation kits. I have written about such companies in the past. There is definitely a segment of the market these incorporation companies serve.
The most obvious motivating factor for setting up a corporation on your own is to save fees. But there is a potential trade-off. You now subject yourself to the hassles of filing a corporation yourself and the possibility of filing erroneous paperwork. At least if you hire a lawyer you have someone to blame, right?
But the real question to ask yourself is this: "Have I considered how it all fits together?" See this post on incorporating in Iowa for a checklist of steps.
But filing articles of incorporation is only one step in the process. Have you also considered:
- Is a Corporation the right entity for me?
- Shareholder Agreements – Buy/Sell Issues.
- Board of Directors.
- Obtaining an Employer Identification Number (EIN).
- Banking arrangements.
- Issuance of Stock.
- Financing your corporation.
- Whether or not to elect S corporation status.
- Corporate name protection.
- State government requirements.
- How to Avoid Lawsuits.
- Following corporate formalities.
- Signing documents as an officer.
- Assigning existing business to the Corporation.
- Intellectual property.
The above list is just a sampling of the issues you may deal with as you start your business. A good business lawyer should be able to help you with all these issues either by providing you with direct advice or connecting you with someone else (often accountants, bankers and insurance agents) that can help fill in the gaps. Most business people will tell you that hiring a good lawyer is crucial to your business success. Plus, you might actually be surprised at the cost of hiring an Iowa lawyer compared to some of the online incorporation companies.
How do you hire an Iowa business lawyer? I suggest you follow two rules:
1. The attorney must be experienced and competent with business law issues. Since you are in business you probably should not hire the local personal injury, family law or other attorney that does not have experience with business law issues. Choosing a lawyer that is not familar with business law may have serious consequences and may increase the costs because the lawyer may learn on your dime. By analogy, you don’t want a plastic surgeon operating on your heart.
2. Make sure you feel comfortable with the attorney. Don’t make a snap decision based upon hourly rates. Do you trust the lawyer? Did you get your call returned right away? Is the attorney easy to talk with? Does the attorney care about you and your business? Does the relationship feel right? There are many competent and experienced business attorneys in Iowa so make sure to trust your instincts.