How long does it take for a lawyer to incorporate and organize a startup?
Assuming just the typical documents are made such as shareholder agreement, bylaws, stock purchase agreement, IP agreements, etc.
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If it's in the US, it should take about a week. At least, that's been my experience. Lawyers tend to recycle their work so an experienced lawyer should have everything in place. – Frenchie 12 years ago
2 Answers
This question seems to get asked a lot, usually with the qualifier that it is only the typical documents or standard terms. But the reality is that there is no standard... each organization is different. Even when lawyers operate off of precedents (as they do in practically all circumstances), each set of precedents needs to be modified to the particular needs of the company, including diverse capitalization requirements, vesting, governance, tax strategies, IP assignment, liability, indemnification and other matters. Plus, you don't know what the founders want until you discuss it with them, and they have rarely, if ever, thought through all the issues in advance. A good lawyer isn't just preparing the documents, but is thinking through and researching any issues that come up in relation to a particular set of founder's circumstances.
My experience is that in 95% of cases it takes me 5-10 hours to draft the various documents and review to make sure everything is in order. That is separate from any time spent on consultation, organization and research of issues. In the other 5% of cases it it is more than 10 hours... and sometimes much more if a client has very particular circumstances.
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And then you need to add the time it takes to file the documents and hear back from the various governmental agencies involved. – Frenchie 12 years ago
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I understood the question as how much time goes into creating the documents, not how much time elapses between starting the project and the formation being complete. There isn't a lot of bureaucratic waiting when forming a company in the US, at least not in Delaware. You can have stamped evidence back in less than an hour for the payment of an expedite fee, and my experience is that even without an expedite fee the stamped certificate comes back within 24 hours, and often just a few hours after filing. The incorporation filing itself is the least of what typically goes into a formation. – David Raynor 12 years ago
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ok, very good; upvoted. – Frenchie 12 years ago
I'll second David Raynor's comments, but note that the time for the attorney to prepare the documents isn't the only relevant time. The relevant documents need to be filed with the relevant Secretary(/ies) of State, documents and stock certificates need to be signed, etc...
The fastest I've ever been able to accomplish all that was 2 days, but it cost extra because of all the fees to expedite filing, get a corporate seal, etc.... A week is more typical, but it can be longer depending on how backed up your state's Secretary of State is (California, for example, takes about 3 weeks just for the filing.)
