Careers in law are considered lucrative by many people. For this reason, thousands of students enroll in academic institutions to study law at various levels. While some do it for passion, others enter into la mainly for financial gains. Normally, an individual gets employed in either the public or private sector after their studies. For maximum benefits in practice, individuals might have to break away from their employees to practice as independent attorneys. One needs to form an LLC to practice law without challenges.
An LLC is a limited liability company. This is a form of business embraced by small business owners to limit their liability to business activities.
Advantages of Forming an LLC
An LLC has several benefits to individuals practicing law. These include;
● Limited liability- The main advantage of forming an LLC is protection from business-related activities. With an LLC, members do not risk losing their personal properties to creditors when the business fails to service debts. Additionally, activities carried out are treated as LLC responsibilities and not individuals’. However, the limited liability might be lost through legal action, a situation known as piercing the veil. Avoiding situations that lead to piercing the veil ensures the longevity of the LLC.
● Flexible membership- As an attorney, one is free to join or exit an LLC. Additionally, there is no limit to the number of members that can be in an LLC. One can practice law under an LLC then leave when they achieve their goals. However, the entry and exit from an LLC are governed by terms and conditions set by members. The roles of each member of an LLC are governed by regulations set by members and government policies.
● Proper management- An LLC gives individuals a chance to practice law without worrying about managerial problems. Members can elect a management group to run the LLC while others continue to practice law. Member corporations can be given roles such as tax payments. A member corporation of an LLC can be appointed to be a pass-through entity for taxation. Proper management leads to the heightened credibility of the LLC
and its members. As a result, individual members can grow their reputations in their respective fields of practice.
● Limited compliance requirements- If one intends to practice law independently, an LLC is the best form of registration they should take. Registering an LLC has lesser requirements compared to other forms of business.
Registering an LLC
The following steps are involved in registering an LLC.
1. Choosing a state to form the LLC- Before registering an LLC, one should establish the ideal state in which they could practice. To identify a state, one should pay attention to the kind of law they practice and the availability of clients. State regulations should also be used to determine the ideal state for operating an LLC.
2. Choosing a name for the LLC- An LLC needs a name to identify it from others operating in the same market. When choosing a name for the LLC, one should pay attention to the kind of law practiced and the LLC’s long-term goals. Before settling on a name, one should conduct a trademark search to avoid selecting names that have already been used.
3. Choosing a registered agent- One needs a registered agent in the state of interest to register an LLC. Registered agents are also needed when expanding operations of an already existing LLC into a different state. The main role of an agent is to receive important legal and tax documents on behalf of the LLC.
4. Preparing an LLC operating agreement- An LLC operation agreement contains the regulations that will govern members to attaining the goals of an LLC. It cuts across all LLC applicants, even if one is the only member of an LLC.
5. Filing the LLC with the State- This is the final application step after which one gets the LLC registered. The filed application will be reviewed by authorities for authenticity. Having a registered LLC is not a guarantee that one succeeds in the legal profession. It requires discipline and determination to run a successful LLC. Financial discipline keeps the LLC afloat when hit by a crisis. A humane approach to lawsuits keep the LLC and its members focused on the goal which is delivering justice.