While many of my clients spend time thinking about setting up a new business, others are a bit more impulsive. This morning I received a call from a client who wanted to set up an LLC immediately. They had tried to use an online site, but they got bogged down in the forms and language. As he explained, about halfway through, he just gave up trying to sort out the forms. He remembered that his brother had worked with me to set up his company, so he gave me a call.
Why Are You Setting Up an LLC?
Setting up an LLC has become a bit of overused advice. It seems that almost everyone just assumes that they need an LLC. Buying a house? Set up an LLC to own it. Creating a side-hustle business? Yup, you need one too. I’m not here to dissuade anyone from starting a business, but it’s also helpful to think about why you are doing it. Sometimes, an LLC may not be the right corporate form for you. A sole proprietorship might be all you need.
My new client was defaulting to an LLC because that’s what his friend said he should do. Is his friend a lawyer? Nope. Is his friend an accountant? Nope. His friend works in IT and has never owned a business. I’m not sure what qualified him to recommend a corporate form. But he listened to his friend and was rearing to go.
Who’s Going to Help You?
While you may have a romanticized version of running a business all by yourself, the truth is, you’ll need a team of people to help you out. There are a variety of different areas of business and it’s highly unlikely you are fluent in all of them. For example, after talking to my client, I reminded him that he would need to get a Tax ID for his business. He didn’t know how to do it or who to call. So we set him up with an accountant for an initial meeting to go over tax issues.
Then we discussed his banking for the business. He uses an online-only bank right now, but I suggested he may want to talk to someone (a live person) in a local branch of a bank who specializes in small business banking. There are lots of ways a small business banker can help you out. One of the most beneficial ways can be if you get in a tight spot and need a line of credit.
If you are thinking of starting a business or already started your business and want to make sure your legal documents are in order, let's set up a Legal Strategy Session to discuss the process and what documents would be best tailored for your company.