You want to start a business in Iowa. Do you really need a lawyer? My answer may surprise you.
Every day, many entrepreneurs do exactly that by using online incorporation kits. There is definitely a segment of the market these incorporation companies serve.
The most obvious motivating factor for setting up a corporation or LLC 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 or LLC yourself and the possibility of filing erroneous paperwork.
But the real question to ask yourself is this: “Have I considered how forming a business entity fits together with starting my business and my goals?”
Filing articles of incorporation or a certificate of organization for an LLC is only one step in the process. Have you also considered:
- Which is the right entity for me? Have I considered the best way to protect my assets? Do I form a corporation or LLC? Do I file for S election status?
- What should be in my Bylaws?
- Will there be multiple owners? Do I need a shareholder agreement?
- Who should be on my Board of Directors?
- Who will be the Officers?
- Will I have employees? Should I have agreements relating to those employees? A non-compete?
- How do I obtain an Employer Identification Number (EIN)?
- What about banking arrangements?
- How much stock do I issue? How do I capitalize that stock? What should the amount be for authorized but not issued stock?
- Are there special issues involving how I intend to finance my corporation or LLC?
- Will I seek venture capital or angel investment?
- Where should I go for insurance?
- How do I protect my corporate business name?
- What are state government requirements?
- What about taxes?
- Am I set up to avoid lawsuits?
- What are the corporate formalities I need to follow?
- How should I sign documents to avoid personal liability?
- Do I need to assign existing business to the corporation or LLC?
- Will I have a lease?
- What about protecting my company’s intellectual property?
The above list is just a sampling of the issues you may deal with from a legal standpoint 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 successful business people will tell you that hiring a good lawyer is crucial to your business success. The time to hire and build a relationship with a lawyer is not after you have been sued. Plus, you might actually be surprised at the cost of hiring an Iowa lawyer compared to some of the online incorporation companies. Most of the business lawyers I know provide good value for the services and advice provided.
So how to you hire a good business lawyer for your Iowa business? I suggest you follow two main 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 has no or limited experience with business law issues. Choosing a lawyer that is not familiar with business law may have serious consequences and may increase the costs because the lawyer may learn on your dime, or worse, create problems for you. 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.