Do I need a lawyer to help start my small business?

The truth is, it really varies based on several different factors.  Whether you need a lawyer depends largely on the type of business you are starting.  In general, the simpler your business, the easier it will be for you to start it on your own.

A sole proprietorship is the easiest form of business to start.  You do not have to register this type of business with the state; however, you may still need to register an assumed name (also known as a Doing Business As or “DBA” name), register with the county or municipality where your business is located, obtain business licenses, and obtain tax identification numbers (for example, if your business will charge sales tax or have employees). Some people are more comfortable working through these issues on their own (i.e., what business license(s) do you need?), but especially in large metropolitan areas, the administration can be complex and other people want help.  

Partnerships and limited liability companies (LLCs) are more complicated because they have to register with the state and certain documents need to be drafted, like partnership agreements or operating agreements.  These agreements can become complex, particularly when multiple parties are involved, so it is advisable to use an attorney under these circumstances.  However, even in a relatively simple organization, such as a single member LLC, I still recommend preparing an operating agreement (although it is not strictly required) because it is one of the important indicators that your business is a separate entity.  I definitely do not recommend using a one-size-fits-all operating agreement (like from the internet) in any circumstance.  Each business is unique, and a generic agreement will inevitably lead to problems down the road.

Corporations (there are S- or C-corporations) are even more complicated.  They have to register with the state, bylaws and other documents must be prepared to establish the entity, and they have a far more complicated ongoing legal requirements than other business entities.  If you determine to be an S-corporation, you must notify the Internal Revenue Service of your determination within a certain amount of time. In addition, there are very specific requirements that vary by state that must be completed in order to keep your organization in good status.  Operating a corporation is very complicated and you will definitely want an attorney to assist you.

In addition to the above, an attorney can help you review or draft any contracts you may need, help you determine whether you should register any trademarks, and generally assist with matters of strategy.  Plus, when you allow an attorney to take care of all the legal matters, you can have more time to focus on growing your business!