Do I Need A Lawyer To Form A Business?

The first thing to consider is what type of business do you want to have. There are there major categories of business, with some additional subcategories (which won’t be discussed here. The first is the sole proprietorship. In our previous blog article we discussed the pros and cons of a sole proprietorship versus an LLC. For additional information refer to that blog.

Another major business type is a corporation. Corporation is formed when papers are filed with the ACC. Among others, the first papers that must be filed are the Articles of Incorporation. The articles must include key information about the corporation such as name, address and contact information. In addition, the Articles must provide a statement of the nature of the business the corporation will be involved in. Along with the articles a Certificate of Disclosure for Business Corporations must be submitted as well. In addition to the articles there are other requirements that must be met. For instance, a corporate records book must be set up. In addition to the record book a corporation should set up by laws. Corporations must publish the articles of incorporation within a set period of time after the ACC has approved the application. This was discussed more extensively in our previous blog on how to form a corporation.

A third major business type is the LLC. Formation of an LLC is governed by Arizona Revised Statute § 29-631. LLC’s allow for management directly by the members, however, members can also opt out and allow a more centralized style management, similar to a corporation if they choose. An LLC is formed by filing the Articles of Organization with the ACC. The articles must include certain information such as the name, address and statutory agent among other things. LLC will be registered with the city they are doing business in and apply for any additional business licenses or other licenses that may be required by Federal law for tax purposes. Once an LLC is formed it generally can continue as long the members want to. This was discussed more thoroughly in our blog How do I form an LLC.

As detailed in the previous blogs on these categories, you don’t need a lawyer to start a business under any of these models. However, as also discussed, there are several pitfalls that can happen in starting up any business. Among them, is ensuring the business entity is set up properly. This is important to shield the owners or members from personal liability for business actions. While a businessperson may be able to complete the necessary paperwork, they may not be familiar with the other attendant requirements at setting the business up correctly. Furthermore, depending on the type of business you want to engage in, a skilled attorney can advise you on what type of organization may best suit your needs. For instance you may not need to go through the formalities of setting up a corporation when an LLC will work just fine.

Although you don’t need a lawyer to set up a business, the same could be true of any area of law; would you want to represent yourself against the state facing criminal charges? Certainly there are many differences between the two, however it illustrates the point, just because you don’t have to have an attorney, doesn’t mean you shouldn’t. If you are thinking about forming a business and have questions call our office today and schedule a free consultation with one of our knowledgeable attorneys to find out if hiring an attorney is the right move for your business.