Today’s post refers to the situation clients face when they meet with an attorney for the first time to discuss the incorporation of their business.
Presumably, every client has questions for their attorney. But sometimes the value of an attorney’s work comes not from their ability to answer questions, but instead their ability to ask their client the right questions.
Any business attorney that has experience forming business entities can perform the tasks that you ask of them, and likely do it in a competent fashion. However, how does a client know which business entity is best for their new company’s needs? And for that matter, how does an attorney know which business entity is best for their new client? The answer is, neither party may know whether a business entity is the best fit for the business that needs to be formed. What’s most likely the case is neither party is a licensed tax professional. And the opinion of a licensed tax professional is important to determining which corporate structure is best suited for your client. A company’s corporate structure could make a spectacular splash in the pool of tax savings.
So the very first question your business attorney should ask you is, “Have you spoken with a CPA yet?”
If they don’t ask you that question, politely excuse yourself and find another attorney. Any attorney can form a business for you, but the right attorney will make sure that forming a business is the right choice for you. A CPA’s advice is invaluable when deciding which business formation will save you the most on taxes. In California, the mandatory fees for an LLC are $800 –regardless of whether your LLC makes a single dollar or not. For many, that amount just doesn’t make sense. Sometimes incorporating your business isn’t the right decision and will cost you more in taxes than as a sole proprietor.
If you’re interested in discussing this matter further or if you have questions about filing for the formation of a California business entity, a dissolution, please contact my office at 1-844-695-1487 or e-mail me at firstname.lastname@example.org. I appreciate the opportunity to answer your questions and concerns.
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