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At Kahan Kerensky Capossela, LLP (“KKC”), we assist many clients with the process of starting a new business each year, and it's not uncommon for a potential client to call our office and ask if they really need a lawyer to complete the process or can they just use one of the online document preparation services. My general response is that they absolutely do NOT need a lawyer to start a new business; they can obtain all of the documents required to do so online completely free. However, I also point out that if they elect to go that route, they should make sure that the documents they file are completed properly and that they fully understand the requirements in order for them to obtain the limited liability protection that they are seeking. The truth is that the standard documents that need to be filed to form an LLC or a corporation in any state can be found online in a matter of minutes, which leads many potential clients to believe that starting a new business is just about filling in and filing some papers. While filing the necessary documents is an important part of starting a new business entity, the real value a lawyer adds is in questions that the lawyer should ask and the advice that you receive both during and after the formation process. At KKC, we are not looking to represent a client in the formation of their business and then never hear from that client again. Our goal is always to assist in the start-up of the business and also to remain an adviser to our clients long into the future.

When a client wishing to start a new business engages KKC, we typically set up an initial office conference to discuss their business idea, followed by a general review of the different types of legal entities that are available (i.e. LLC, corporation, partnership, etc.). Once the type of entity is chosen, we gather the necessary information to prepare the required formation documents. The reality is that we know the prices that online document preparation companies charge for forming an LLC, and although we are confident that we are adding value, we still need to remain competitive. Therefore, we attempt to make the process as efficient as possible and to complete the necessary formation documents at the time of our initial meeting. While a member of our staff is preparing the necessary paperwork, we take the time and use our past experience to try and identify if there are any other requirements for our client’s new business that they might not have considered. For example:

• If there are multiple owners of the business, what happens if someone dies or wants to leave the business? These can be tough issues to address, but it is always better to plan ahead and have an agreement in place that addresses these issues.
• Is a license or permit required to conduct the contemplated business activity in the State of Connecticut?
• Although we will have confirmed that the desired business name is available with the State of Connecticut, has the client determined whether or not a suitable domain name is available? Nowadays, almost every business has a website (or should), and obtaining a domain name as soon as a name is settled on often makes a lot of sense.
• Will the business have employees? If so, do they have an employee handbook? If not immediately, the client should know to call our office if they do hire employees.
• Where will the business operate? If it is going to initially operate out of the client’s home, have they called their insurance agent yet to make sure that isn’t an issue under their existing homeowner’s insurance policy? If the business will lease space, we strongly encourage our clients to advise us before signing a lease.
• Does the client have a CPA? If not, we are happy to make recommendations. If so, we often try to have a quick phone call to make sure that everyone is on the same page as far as type of entity, obtaining a tax identification number, and determining whether the business needs to collect sales tax.
• Does the client have an insurance agent or relationship with a commercial banker? Both of these relationships are important for any new business owner.

After we’ve had a good discussion about the client’s proposed business, we always make it a point to discuss the proper way in which the client should conduct their business in order to maintain limited liability protection. For example, we advise clients on how to handle funds between personal and business accounts and the record keeping necessary to maintain the business as a separate and distinct entity. Usually by the time we have finished reviewing the above items, the formation paperwork has been prepared, and we are able to review it and execute the documents before the client leaves.

Starting a new business involves much more than simply completing the necessary paperwork that gets filed with the Secretary of the State’s office. Completing the paperwork properly is certainly important, but the advice that a knowledgeable attorney with years of experience representing new businesses can provide is the real benefit of hiring a lawyer. At KKC, we have several knowledgeable and experienced business attorneys that would be happy to sit down with you to discuss your new venture and hopefully build a relationship that lasts well into the future. To set up an appointment, call us at 860-646-1974.