Need for an attorney?

luckmuttluckmutt subscriber Posts: 1
edited June 2006 in Business Planning
My wife, myself and my best friend are going into business for ourselves.  We`re tired of working for other people.  She currently works in the field of business that we`re opening.  We`re forming a corporate entity that will have a contract with a nationwide company.  Should we hire an attorney to set up our LLC or S-corp?  We are located in CA.  I`ve gone onto nolo.com and mycorporation.com and seen that we can do it ourselves.  We will all eventually be leaving our jobs to work for ourselves so I want to make sure everything is legitimate and we have proper protection.

Comments

  • NuevolutionNuevolution subscriber Posts: 30 Bronze Level Member
    Your best bet. is to form a corporation and assign positions (ranks) officer, CFO and so forth. This will help you more than an LLC. I am in California myself..
  • RichRich Las Vegas, NVadministrator Posts: 582 Site Admin
    edgar,
    thank you so much for jumping in with quick advice! that`s what`s so astonishing about this StartupNation community. Ask a question and Shazam! there`s a quick pearl of wisdom for the answer.
    wondering though (now that i`ve buttered you up!), why do you say S corp is better than LLC?!
    we use LLCs all the time for the entities we create. great liability protection and great tax treatment. it`s the newest and most fast-growing form of structure out there.
    not meaning to step on you - i really want to hear what`s behind your strong opinion.
    luckmut, as for whether you can file online, we have a resource at this website that helps you do that AND learn about selecting the right structure.
    however, consulting an attorney and an accountant is a really smart thing at these beginning stages. you`ll get insights that only a pro can provide. to be thrifty about it, once you`ve got the professionals` advice, you CAN save money by doing the actual filing aspect online.
    good luck and START IT UP!!!
  • luckmuttluckmutt subscriber Posts: 1
    Edgar and Rich,
    Thank you for such quick responses.  We are preparing to make a huge leap from the comforts and supposed security of work for others.  I found Start Up Nation yesterday and I`m an instant fan!  I, too, am interested in hearing about Edgar`s preference for S-corps.  They seem to me quite a bit more involved and paperwork intensive.  Does this added work increase protections?  Is the S-corp more beneficial for certain types of business?  I`m a little green with these issues.  I`ve done a fair amount of reading and gotten more confused!
    Thanks again!
  • NuevolutionNuevolution subscriber Posts: 30 Bronze Level Member
    Hello Rich.. hahaha I know that by answering a quick question I was going to leave alot of room for questioning "like Vinny said in Godfellas, you better know what you are saying because you may fold under questioning."I never said S corporation was a wrong approach. i was refering to the LLC part of it.. An LLC (Limited Liability) is treated like a Partnership,  although you get all the tax benefits and the luxury of being treated as a Corp. The issue is not on the formation of the company.. I mean they are all going to be vested.. But the true lies behind the scenes. What I mean is, how are they going to know who is putting in more than the other? How are responsabilities going to be disbursed through out the company? What if someone puts in more work than the other? What if things don`t work out as a LLC? what is he going to do? Disolve and start a new one? Amend all the corporate paperwork?I think his best bet is Form a "FULL C Corp". and claim taxes as an S Corp.and disburse the profits in three ways at the end of the year.At least like that you know that if you assign someone a specific task; example: CFO.. he will put in as much as the other partner. If not you can always vote him/her out.
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