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Business Formations

Do You Need a Lawyer to Form a Business?

Written and reviewed by Andrew R. Schneidman, Esq. · Last reviewed

Online filing services can create a legal entity in minutes, and for the filing itself, that is often enough. The question worth asking is not whether the entity gets formed, but whether the business is actually set up to operate the way its owners intend.

This guide covers what formation services provide, what they leave out, and where an attorney's involvement earns its cost.

Can you form a business without a lawyer?

Yes. Filing formation paperwork with the state is a straightforward, well-documented process, and most single-owner businesses with a simple structure can complete it without a lawyer.

The state's own filing system, or a formation service built on top of it, can produce a validly formed entity for a modest fee. Nothing about that process requires a law degree, and there is no reason to pay attorney rates for a task that is genuinely mechanical.

What do formation services like LegalZoom actually provide?

Formation services file the public formation paperwork and often generate a generic operating agreement template, but they do not advise on entity choice, tailor the operating agreement to the owners' actual arrangement, or review the contracts the business signs afterward.

That distinction matters because the filing is the least consequential part of setting up a business. A formation service will form whatever entity you tell it to, on whatever terms its template defaults to, without asking whether that structure or those terms actually fit two co-founders with different roles, a silent investor, or a plan to bring on a partner in two years.

Where do template formations create problems later?

Template formations create problems when the generic operating agreement does not reflect what the owners actually agreed to, most often around unequal ownership splits, decision-making authority, and what happens when an owner wants out.

A template operating agreement typically assumes equal ownership and simple majority decisions, which works until it does not match reality. Two founders who agreed verbally to a 60/40 split, or to one founder having final say on hiring, often discover the template says something else entirely, and only notice when a disagreement forces them to read it closely for the first time.

The fix at that point is a renegotiation among people who no longer fully trust each other, instead of a conversation among founders who were still on the same page. Choosing a business structure and what to do after you form your LLC cover the decisions that go into getting this right the first time.

What does an attorney add that a filing service does not?

An attorney adds judgment: which entity actually fits the business, an operating agreement written to match what the owners agreed to rather than a generic default, and a second set of eyes on the contracts the business signs in its first year.

At Schneidman Law, that judgment is available on a flat monthly fee rather than a one-time project rate, which means the same attorney who helps form the business stays available as it signs its first contracts, hires its first employees, and runs into the questions that formation alone never answers.

Andrew’s take

Forming a business correctly is more than filing an online application with the state. It involves strategy, a proper operating agreement or bylaws, and real discussions with the owners. Handling those things up front can save thousands of dollars and countless headaches later.

Frequently asked questions

Is it a waste of money to use a formation service and then hire a lawyer?+

No. Using a formation service for the mechanical filing and then having a lawyer review or draft the operating agreement and early contracts is a reasonable, cost-effective sequence. The filing itself rarely needs a lawyer. What follows it usually does.

What is the risk of skipping a lawyer entirely?+

The risk is not that the entity fails to form. It is that the operating agreement and early contracts do not reflect what the owners actually intended, and the gap only surfaces once a disagreement, an investor, or a sale forces everyone to read the documents closely.

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