Cheaper Is Not Always Better When Forming A Corporation Or Limited Liability Company

Use An Attorney That Sees The Big Picture, Not A Company That Is Interested In Selling You Form Documents.

Fornaro Law’s model with corporate structuring of entities and asset protection involves thinking outside of the box and properly structuring entities that make sense. Because each business is unique, the documentation should be unique to their business as well.

Our goal is to establish a long term and trusting relationship with our clients. A corporate client at Fornaro Law is one that will grow with us and will benefit from our 22 years of experience in this area. We see the big picture and help set up a road map for the future.

We all for making streamlined documents that do not overcomplicate a business relationship. Unfortunately, we have seen a consistent use of cookie cutter entity formation documents for corporations and limited liability companies and the creation of stockholder and operating agreements that are available for an inexpensive price online.

One size does not fit all in the world of corporate law. Online companies are not looking at your present or future, as their sole goal is to sell as many documents as possible. Remember, paying a little more now to do it properly can save you big money in the future.

There are important reasons why you should consider hiring an attorney before just forming an entity.

Because Fornaro Law has a very large business and corporate practice, we consistently are correcting and restructuring business documents for people that have formed themselves or have used online companies. Currently, we are preparing for litigation in one case in which the parties did not seek legal advice prior to forming an entity, using an online service and began operation without an attorney. This could have all been avoided at a far cheaper price, just if they would have gone through an attorney first.

Prior to forming an entity online these are the things that you should think about:

  1. Have you spoken to a corporate accountant to determine the best way that the entity should be taxed and how the new entity will fit in your existing and future tax planning?
  2. Are you forming the entity in a state that has the best asset protection or are you forming it in a state just because it is the state that you live in? Illinois is probably the worst place to form an entity for asset protection purposes.
  3. Have you fully discussed with your business partners as to what happens in the event of a death of a partner or a dissolution of the relationship?
  4. Do you have partners outside of the state or the country? If so, where will the resolution of the dispute take place?
  5. If you have multiple investments with the same or different partners, will it be cheaper in the long run to set up a series LLC?
  6. Will establishing a holding company make future work more efficient and less expensive?
  7. Do you have a revocable trust and should it be the member or shareholder of the entity for estate planning purposes?
  8. Do you have an organizational chart for the present and future growth of your business venture?
  9. Is the entity for holding real estate or is it an operating company?
  10. Have you contacted an insurance company regarding the new structure, key man life insurance, disability, liability, workers compensation, unemployment, cyberinsurance or vehicle coverage?
  11. Are you engaging in a business which will require independent contractors or employees or vendors or suppliers?
  12. Have you set up employment manuals, independent contractor agreements, NDAs, non-competition agreements, etc.?
  13. Do you have a banking relationship?

The key to a successful business is to rely on professionals to help you both now and in the future. You will be more secure having an attorney looking out for you from the start.

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