Build Your New Business On A Solid Foundation: Get Good Legal Counsel At The Start

It’s more tempting than ever to handle the legal set up of a new business yourself. Online forms. Web-based business entity registration. You have enough start up costs, so why not save money on legal fees now when your business is small. You can always hire a lawyer later to fine tune the details—right?

Not exactly.

“In the decades that I’ve been counseling and coaching business start ups I see people make this mistake over and over,” says Peter Ancone, self employment blogger — — and book author and lecturer on self employment. “Setting up a business is more than registration. You need to know what kind of business entity best fits, and will continue to fit, your business model in the future.”

The corporate entity documents you file will define your enterprise as it grows. Whether it’s an Operating Agreement for an LLC, or a Charter and Bylaws for a Corporation, business start ups often make their first mistake by trying to handle these steps themselves.

“When this happens, the owner manager of the start up doesn’t realize what went wrong until it’s too late. These business governance documents will set the procedures, and parameters, for running your businesses,” explains Stephen J. Labroli, Esquire, business law attorney and Partner in the Delaware Valley law firm of Leonard, Sciolla, Hutchison, Leonard & Tinari LLP (


Stephen Labroli practices in the firm’s Business Law and Commercial and Civil Litigation practice groups. He is admitted to practice in both Pennsylvania and New Jersey.

Which business entity form fits your enterprise?

At this point, you should have considered which legal entity your enterprise should be. Below are the types of legal entities you should be considering.

Sole Proprietorship

A sole proprietorship is the most basic type of business to establish. You, alone, own the company and are responsible for its assets and liabilities. Learn more about the sole proprietor structure.

Limited Liability Company

An LLC is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. Learn more about how LLCs are structured.


People form cooperatives to meet a collective need or to provide a service that benefits all member-owners. Learn more about how cooperatives are structured.


A corporation is more complex and is generally suggested for larger, established companies with multiple employees. Learn more about how corporations are structured.


There are several different types of partnerships, which depend on the nature of the arrangement and partner responsibility for the business. Learn more about how these are structured.

Whichever entity you choose, make sure you hire a qualified attorney to form the entity. I have seen many enterprises end up with a truckload of troubles because they failed to spend the money needed to obtain good legal advice.