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Small Businesses and the Importance of a Strong Team of Advisors

“With so many online incorporation services in the market, why should I retain a business attorney to help me incorporate and operate my start-up?”

The rise of legal tech companies has certainly caused many entrepreneurs to question the benefit of a business attorney when incorporating and operating a start-up. Despite these concerns, the importance of retaining experienced legal counsel has not diminished. One of the most important functions of a business attorney is to help entrepreneurs select the correct business entity (e.g., corporations, limited liability companies, limited partnerships, and limited liability partnerships) based on a variety of factors including, (1) cost and ease of formation, (2) anonymity concerns, (3) ability to raise capital, (4) operational efficiency, including the management and control of the entity, and (5) other tax considerations. Thinking through some of these complex factors during the early stages of a company can save a lot of time and cost further down the road as the company experiences growth, investment, and expansion into new markets.

As legal counsel to a number of business owners, we are believers in the philosophy that a team approach can ensure that financial and risk objectives are accomplished in a coordinated and consistent manner. To facilitate this philosophy, we highly recommend that the client’s other advisors, including CPAs, accountants, financial advisers, and insurance brokers, are utilized in the early planning stages.

This team-based approach recently gained the approval of Chip and Joanna Gaines, the successful business duo and stars of HGTV’s widely successful series, “Fixer Upper”, when they gave this advice to other entrepreneurs:

“Joanna advises ‘just surrounding yourself with good, sound people that can help you see the big picture.’ I think of bankers, I think of attorneys, I think about both of our parents, who were always quick to give us a bit of advice,’ Chip added. ‘That, coupled with just great employees early on who were willing to stick it out and fight with us through thick and thin, were certainly the keys to our success.'”

If you’re considering forming a business entity for the first time or you’re seeking guidance in the operation of your business for the first time that you’ve been operating for years, our experienced attorneys will help guide you through the myriad of state and federal laws, as well as other practical considerations often faced by business owners in the operation of their business entities.

Ben Schwefel is an Associate Attorney at The Loftin Firm. For questions relating to a business, nonprofit, or estate planning matter, contact Ben at 760-814-9649.