Why get an Attorney to help set up your business? by Sean Sweeney

In the long run, it is cheaper, and you will sleep better at night knowing you are safe. To me, the question is similar to “why get an electrician to work on your house?” You can repair your own electrical problems, and for a small fee you can use those on-line companies to help you set up your own business, but what guarantee do you have that it was done right? How do you know that it is “up to code”? Will it simply have to be redone again later, or worse, will your house burn down as a result?
Leaving the analogies aside, it is a very dangerous prospect setting up your own business entity, as it threatens to defy the very reason you set up the entity in the first place. The most important protection that business entities provide is liability protection for your personal assets. However, it is a tenuous protection, and if the entity is not properly set up and maintained, you may have no protection at all and not even realize it.
New businesses are inherently risky. You are now risking your entire financial future on the ability to make money with your new enterprise. However, in the interest of saving a few hundred dollars, are you willing to also risk your entire financial past, everything you have saved and worked for, if something should go wrong with your business? I do not think so.
Most businesses and people maintain all sorts of insurance coverage ranging from health and auto, to home and business liability, shelling out hundreds of dollars per month. Yet, many people will mortgage the safety and protection of having a qualified attorney set up your business and advise you on how to ensure you maintain your asset liability protection to save a one time fee of a few hundred dollars.
When a companies “limited liability” is pierced because of improper business formation or management, it is known as “Piercing the Corporate Veil.” Once that Veil is pierced, all of your personal assets may be used to pay off any liabilities the company may have. Having your personal assets seized when you thought they were protected by the “self-help internet business formation” is akin to your house burning down due to discount electrical work: You will never forgive yourself for not spending the few extra dollars and having it done right the first time.
Whenever I think of “Piercing the Corporate Veil” I think of the seminal case Smith v. Van Gorkom and my Business Associations professor at Marquette University, Christine Hurt with her husband singing “Van Gorkom” to the tune of Simon and Garfunkel’s “Cecilia.”
Van Gorkom, you’re breaking my heart/ you’re shaking my confidence daily Oh, Delaware, please change your mind/ It’s not a crime to be lame
Van Gorkom, the case must be wrong/ Directors just cannot be liable I’m a director, and I’m in good faith/ I’ve nothing at stake, I’m all that/ I’m all that
(Full lyrics available at Christine Hurt's blog http://www.theconglomerate.org/2006/05/van_gorkum_the_.html )
So unless you want to end up like Van Gorkom, and be personally liable, spend a little bit of money up front and make sure you understand how to keep your liability protection in tact.