Top 5 Reasons Canned Legal Forms Fail Small Business Owners

By | February 10, 2010

ONE SIZE DOESN’T FIT ALL!

Like people, every business is unique.  Having standard legal documents that are meant to fit every business is similar to a person filling their entire wardrobe with “one size fits all” clothing.  Realizing that starting and maintaining a business is costly, a business owner should not try to save money where legal compliance is involved.

COST!

On the surface, it appears that a business is saving money using template legal forms.  However, templates will not provide a business with tailored and/or compliant legal documents and could end up leading to unavoidable litigation fees down the road.  Litigation costs are always very expensive and typically the main reason why a company declares bankruptcy.

Having an attorney handle the transactional needs of your business allows for each transaction to be tailored to the exact specifications of the business needs and will save money in the long term.

COMPLICATED LEGAL ISSUES!

The law is complicated; lawyers spend nearly a decade in school to become a lawyer and have constant, on-going education throughout their career.  An attorney will explain the complex legal options to you and put all the legal language into clear and understandable “real world” language.

FORMING AN ENTITY NEEDS TO BE DONE RIGHT TO BE EFFECTIVE!

Forming an entity is a great way to protect you and your family from various liabilities however, the process of both choosing an entity type and forming the entity is extremely complex.  If it is done incorrectly limited liability protection may be lost without the company realizing it.  Retaining an attorney to walk you through the process guarantees that the formation process will be done correctly.

FAMILIARITY WITH BUSINESS AND TRANSACTION!

Retaining an attorney to draft your business documents allows for a trustworthy attorney to become familiar with your business and the business transaction.  If an entity finds itself in litigation over a transaction, unfortunately, it cannot call on a canned website to represent them.  The entity will be better off if they have an attorney who is familiar with the structure and purpose of the business.

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