Congrats! You’ve decided to set up a Limited Liability Company (LLC).  I’m sure you’ve heard by now, the filing portion is fairly easy and accessible from the state websites. However, there are some real dangers in setting up your own LLC that could come back to haunt you (and cost you money) in the future!

Here’s a quick list for you:

– Wrong Choice of Entity – LLC might not be the best formation for you (now or long term – based on business plan)

– Trademark Infringement – You may end up committing trademark infringement and not even realize it. The State simply “okaying” your name is NOT letting you  know you’re not infringing on someone else. This could lead to a lawsuit, paying out and rebranding down the line.

– Operating Agreement Required – State offices may provide the Articles of Organization (Articles) to file but they don’t provide template for (many times) required operating agreement document.

– Intellectual Property Left Out – Again, while States give you the Articles to file, they don’t provide lawyer drafted documentation for intellectual property and asset transfer doc to transfer these assets (such as a logo, business name, photographs, etc.) into the LLC.

-Loss of Liability Protection – Simply filing the Articles does not give you protection, you have to earn it.   States don’t provide advisement on limited liability protection best practices.

-Lack of Advisement – To the point: States advise you. They are merely giving a document for you to fill out – which can lead to issues.

Whether you come to Eden Law for LLC help, we strongly suggest not trying to DIY your LLC. We get it, you’re an entrepreneur. So are we. As entrepreneurs we are hands on and want to “Do it all” ourselves. This is one area that we strongly suggest you don’t because you may end up personally liable and without the protections you thought you had.

About the author

As an experienced intellectual property attorney and entrepreneur, Rachel is the managing partner and senior attorney of Eden Law. She advises clients on all aspects of intellectual property, including registration and protection. She has worked with small-business entreprenurs battle against large corporations for successful wins in copyright and trademark matters.

Leave a Reply