Passion. Preparation. Persistence.

Do I need a lawyer to form my company?

On Behalf of | Jul 1, 2013 | Firm News

Yes and no.

When it comes to starting your own company, usually the complexity of the industry dictates whether you should use a lawyer to organize your new entity. Any lawyer will tell you that it is always a good idea to consult a lawyer. But from a practical standpoint, can you start a business without the aid of a lawyer: yes, you can.

The filing fee for an LLC in Texas is $300. To register a business name or DBA (“Doing Business As”) is even less. Most corporate filings can be found on the Secretary of State’s website and are submissible online. Within about 20 minutes, you can have a fully formed entity defined under the laws of Texas. Corporate organization will let you open a bank account, apply for credit, and conduct your business with a reasonable amount of liability security-all with very little initial effort and even less legal knowledge. The system is set up to be user-friendly and provide the bare basics for legal formation.

For 9 out of 10 companies, this is probably enough. However, 9 out of 10 new companies fail within the first three years. Time and time again, owners of companies with sophisticated corporate operating agreements and documentation outlast their peers. Often, the company’s willingness to clearly define its operations through legal agreements find themselves on the best path to success.

Again, this may not be your company. If you are forming an LLC or an S Corp or a partnership to protect a short-term investment, the outlay of cost on legal services may not be worth it. However, if you are forming a company to be your primary source of income, it may very well make sense to engage the services of a lawyer to draft the necessary documents.


Because when you put all of your eggs in one basket, that basket better be well-made. For your protection, security, and peace of mind, engage in a lawyer in drafting the necessary documents to ensure your company the best start possible.

Questions to ask yourself about whether you need a lawyer to start your company:

1. Are you the only owner of the company? If there are multiple owners of the company, you probably need a formal operating agreement. Disagreements will arise in the future. It is a fact of business. Therefore, it is important that you have a solid and valid contract to rely upon. If you are a sole proprietorship, such a formal operating agreement may not be required.

2. What industry are you in? If you are in a heavily regulated and complex industry, it makes sense to hire a lawyer experienced in that field of law. Healthcare, finance, and transportation are prime examples of heavily regulated industries requiring expertise in the laws, statutes, and mandates involved in operation. However, if you are opening up a simple operation such as a yard service or a plumbing company, you may not need the same level of experience in your lawyer.

3. Is this your primary source of income? It simply follows that if something is very important to you, it deserves an extra amount of diligence and care. Even if you’re opening a sole proprietorship, it may make sense to seek the services of a lawyer to provide confidence and stability in your new business.

4. How prone are you to lawsuits? Towing companies get sued all the time. So do contractors. So do doctors. However, interior decorators and florists and tutors may not. It is important to look at the nature of your business and decide how important your liability protection is. If in all likelihood you will face a lawsuit within the first five years of existence, it is advisable to have your company formed by an attorney.


FindLaw Network