Pay a lawyer to convert partnership to LLC or do it myself?
I recently started a partnership (4 months ago) and now I want to convert it over to an LLC. We are starting to generate profit and we would like the limited liability protection. I've been thinking about having a lawyer do the filling this time around (I formed the partnership myself with my co-founder).
I've contacted a couple lawyers (all in the San Francisco Bay) and I've gotten quotes of around $1,500-$2,000 on the high end and one said he would do it for $750. We have the money to pay for it (we are generating profit), but at the same time I do not want to spend $2,000 if I don't have to.
As far as doing it myself, an old co-worker recommended this: http://www.legalzoom.com/. I made an account just to see what the process was like, it looks like it just takes you through the steps by asking you question.
I was also thinking of maybe picking up this book: http://www.nolo.com/products/form-your-own-limited-liability-company-LIAB.html. I used Nolo before in order to learn how to do a partnership, and it was pretty straight forward.
So, do you all recommend I pay a lawyer or do the filling myself? Reason I'm leaning towards paying a lawyer:
- I'll be establishing a relationship with a lawyer during the process, so if anything regarding legals comes up in the future I know who to turn to.
- Would like to make sure it's done right the first time.
- We have some products already out in the wild (mobile apps/games) and we need to transfer all of these to the LLC. We also have some company equipment (iPad/iTouch/mobile devices) that need to transfer over. I'm thinking this might make it more difficulty to form the LLC, since we are not starting a fresh new company.
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Do you ever plan to raise Venture Capital? If so, a LLC or S-Corp will not work for you. I have no affiliation with Scott Walker, but check out his videos and blogs on your situation: http://walkercorporatelaw.com/ - He knows all of the gotcha's you are trying to avoid and even the items you have not thought about. Great blog and video series full of information especially in CA. – Tawman 13 years ago
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Raising Venture Capital is definitely something we might look into. Though, we don't want to do a C-Corp until we actually have VC money, since there is such a large amount of overhead in running a C-Corp and at the moment we would like to focus on the product. From my preliminary research and from talking to lawyers, I've found that it's not a hard switch to go from LLC to C-Corp. – Edgar Miranda 13 years ago
1 Answer
Pay a lawyer. Even if you do the filing yourself. Having an actual lawyer look over the filings can save you a lot of pain in the future and help you chose between the different types of corporation structure. As you mentioned it will give you the chance for some face time with a lawyer so you can be sure to find one you like.
Since you have actual products that would be transferred to the LLC or C/S-Corp having a lawyer is probably best. Without an expert opinion you could be opening your company and self up to some major legal issues.
Good luck!
