Learn how our business formation lawyers in Colorado Springs at Maceau Law can help you in the formation of a new or growing business:
A business formation lawyer is a lawyer who legally assists business owners as they actualize their businesses. A large aspect of a business formation lawyer’s job is aiding the business owner in choosing what classification their business should be under.
A good business formation lawyer will have the experience to know what best suits your business needs and goals. He or she will also be able to fully explain your options and best course of action.
The type of business chosen will impact the way it is taxed, operates and its liabilities. The following are the most common types of businesses established:
Types of businesses
Limited Liability Company (LLCs): A limited liability company is formed by individuals whose liability is limited to the amount of their investment. Sometimes, LLCs are used in place of a partnership in order to limit liability associated with the business.
Corporation: A corporation is a type of business structure that is a separate legal entity from its owners. Larger corporations usually have a board of directors who make decisions pertaining to the business. The corporation pays corporate income taxes, and the owners are protected from the liabilities associated with the corporation. However, when opening a subchapter corporation, the taxes can be paid at individual rates. This is possible because subchapter corporations are often small businesses that are only incorporated to gain the liability protection offered to a corporation.
Sole Proprietorship: A sole proprietorship is the most common structure for new businesses. It is unincorporated and owned and operated by one individual, meaning there is no legal distinction between the business and its owner. The benefit of this type of business is the ability to solely enjoy the profits gained from a business. The negative aspect of this type of business structure is that the owner has to personally endure all the losses of the business. Taxes for a sole proprietorship are paid by the owner through their personal income tax return.
Partnership: A partnership works much like a sole proprietorship but has more than one owner. Partners in the business all have equal responsibility for the taxes and liabilities pertaining to the business. Moreover, they have equal rights to the profits associated with the business.
The above is a general list of the types of business structures most often used. However, each state has different specifications pertaining to businesses within their state. Therefore, there are many subcategories to the above structures that allow for a wide variety of options that can meet the needs of each type of business.
VIDEO: Why hire a business formation lawyer?
To encourage a successful business, beginning correctly is imperative. Classifying a business improperly can lead to a business being sued and going under because they were not created in the right structure. It can mean the difference between a successful business venture and a disaster. A great business formation lawyer can guide business owners as they make the initial decision of classifying their businesses.
Watch the video below to learn about about why you would hire a business formation lawyer:
What to look for in a business formation lawyer:
Individuals who are seeking the help of a business formation lawyer should inquire about the lawyer’s experience. For example, a lawyer who has extensive experience setting up limited liability companies will understand all the aspects of legally beginning that type of business. Individuals should make sure that a lawyer is experienced in their specific type of business.
- Team attitude:
Business formation lawyers are often seen as part of a team when it comes to beginning a new business. Therefore, a good business formation lawyer will possess an attitude that the client matters and be available for them. In other words, when a new business owner calls their business formation lawyer, they want to actually be able to talk to them on the phone and not be negated to voicemail. Clients want to feel that their lawyer is on their team and fighting for the business to succeed.
How much does it cost to hire a business formation attorney?
Of course, fees will vary based on location and the type of business being formed. However, most business formation lawyers charge between $200 and $300 dollars an hour for their expertise. In some cases, lawyers will work for a project fee. Although this amount may seem high, getting a business started correctly is crucial to its success. Therefore, the money spent is a valid investment.
According to Forbes.com, there are around 543,000 new companies beginning on a monthly basis in America. Even in the economic downturn, it seems individuals still possess the entrepreneurial spirit that so characterizes Americans. Because new businesses are prevalent, business preparation lawyers are in high demand. The above information will guide business owners as they procure the services of a business formation lawyer.
Contact our business formation lawyers now
Feel free to give us a call at 719-633-2222 to schedule a free consultation with one of our experienced business formation lawyers at Maceau Law. Our service area includes the Colorado Springs, Pueblo, and Castle Rock areas.