Should Entrepreneurs Hire a Lawyer or a Paralegal When Forming a Small Business in California?
Planning to start a small business in California? You need the help of someone who is proficient in the business formation process. The best person to trust is a competent corporate attorney. They are the most reliable source of legal guidance when opening a business. There are many startup companies that think they will save more money if they hire a paralegal instead of a lawyer. This is an awful misconception because entrepreneurs are putting their businesses at risk of various legal issues if they opt to do so. An owner of a newly opened enterprise in California recently reached out to Incorporation Attorney. She needed our help because her business faced a ton of problems after she hired an incompetent paralegal.
Business Attorney vs. Paralegal: Understanding the Differences Between Them
If you’re planning to open a small company in California, you need to hire a competent corporate lawyer to help you through the business formation process. Some businesspeople opt to hire a paralegal instead of a lawyer. They believe that they can save money by choosing to do so. They also think that a paralegal is just as capable as an attorney. Unfortunately, they are terribly wrong.
Entrepreneurs should understand that paralegals are very different from corporate lawyers. One of their differences is in the services that they offer. Attorneys can perform a long list of activities for you that paralegals are not legally allowed to provide.
Only corporate attorneys are legally allowed to counsel business owners in the business formation process. When you start an enterprise, there is a vast list of questions that come up. A prudent attorney can answer all of these inquiries proficiently.
A California Businesswoman’s Bad Experience with an Incompetent Paralegal
Andy Gale, a lawyer at Incorporation Attorney, has many years of experience helping people start small businesses in California. A client recently came to him for help. She is a budding entrepreneur and was planning to open a company. She hired an incompetent paralegal to assist her through the process of business formation, and this brought her a lot of problems.
It’s unfortunate that it took around ten months working with the paralegal before the client realized that something was off. The businesswoman had paid the paralegal $2,500 to help her form a business. But she started to notice that the paralegal had barely completed any work for her. The client began to worry, so she contacted Andy for help.
As part of the services that Incorporation Attorney provides, Andy and his team of business formation specialists reviewed the client’s corporate records. What they found out was alarming! She did not perform any further work after that.
The paralegal failed to set up the company for the correct tax election at the Internal Revenue Service. She also neglected to file a statement of information, which is a document required by the state. All businesses in California need to submit this so that the government can identify who the directors and officers of the enterprise are. These are only a few of the many tasks that the paralegal failed to fulfill.
Andy also checked the client’s status with the state, and he found out that her business was suspended. This meant that she could be held responsible for the liabilities of the corporation because there was no corporate shield between her and her company. The client was at risk of various legal problems and could potentially lose a lot of money.
The Two-Fold Problem
Because the California business owner hired an incompetent paralegal, she encountered a myriad of problems. Although Andy and his team from Incorporation Attorney solved the issues, all of these could have been avoided if the client hired an attorney instead. A closer analysis of the case reveals that she had two problems that led to her situation.
Problem 1: The Client Does Not Have the Expertise to Assess the Quality of the Paralegal’s Work
The client did not have sufficient knowledge about the legal implications of forming a business in California. This was a problem because she could not determine whether the paralegal was adequately performing her work or not. The client had no clue if the documents prepared were complete or if they were accomplished correctly.
This is why all those who plan to open a business should hire a corporate lawyer. A business attorney is a professional who is knowledgeable and well experienced in helping clients form an enterprise. Even in situations where an entrepreneur has no idea about the legalities of starting a corporation, he or she can expect that a competent lawyer will accomplish all necessary tasks properly.
Problem 2: The Paralegal’s Incompetency
The client had already spent ten months working with the paralegal before she began to realize that she was being ripped off. The business owner started to suspect the paralegal’s services when she found out that her friends filed a lot more documents when they formed their corporations. She became worried because the paralegal filed only one piece of paperwork for her, the Articles of Incorporation. It was only then that she reached out to Andy Gale of Incorporation Attorney.
There is a vast list of services that corporate lawyers can offer those who plan to start a business. Most of these cannot be provided by a paralegal because they are prohibited by the law. If you want your corporation to be formed by a professional, you should hire a competent business attorney in California.
How Incorporation Attorney Solved the Business Owner’s Problems
They made sure that the business was set up for the right tax election. This is important because for a company to be successful, it needs to operate in the most tax-efficient way.
The second action that Andy and his team accomplished was to contact the Secretary of State and file the necessary documents that the paralegal failed to file. This was imperative for the business to be removed from its suspended status. The client’s enterprise is now legally recognized as an active corporation in California.
Lastly, Andy and his team went through all of her corporate records and completed all the necessary incorporation documents.
Competent Corporate Lawyers from Incorporation Attorney
Andy Gale is an experienced corporate lawyer that helps people who want to start a small business in California. He also assists entrepreneurs in forming corporations and limited liability companies. If you want to know more about Andy’s services, you may call him at +1 (714) 634-4838.