Beitchman & Zekian Blog

Legal Information in Plain English

Archive for June, 2010

An Ounce of Prevention is Worth a Pound of Cure

That’s the way the saying goes and it is true with respect to business formation regardless of the size of your business.  As an attorney who works with people in structuring their business entities as well as advising them with regards to the legal, day to day operations, I see too many clients taken in by DIY legal companies the creation of too many shoddy Limited Liability Companies (LLCs) and corporations.

Sure it costs $395.00 including the state filing fees to set up a corporation or LLC using DIY forms, but you miss out on the discussion about what kind of entity is best for your business purpose.  You also do not get the follow-up by an attorney to ensure that you have all the necessary corporate documents needed to do simple things like open a bank account, issue shares or interest in the company, or lease an office and/or equipment.

It may be a bit of an expense to hire an attorney to file and document your company properly, but even if the attorney’s fees are 3 times the amount of the DIY fees, it is preventative in nature.  When clients walk in with a DIY LLC/Corporation I have to tell them that it will cost them about twice as much to redo and/or fix everything that was done incorrectly (plus any late fees or penalties) as they would have paid me at the outset to set up their company.

When it is something this important, it is worth spending a little more at the start to get it done right.  If you’d like to discuss the organization of your corporation or LLC, please contact our office at (818) 986-9100.