Of course, the answer is “it depends.” There is an article in entrepreneur.com that offers some good thoughts in this regard. They break it down into three options: (i) do it yourself, (ii) utilize a formation service, such as an online provider and (iii) hire a lawyer. Let’s start with (iii). This is the most expensive of the options and can run into the single-digit thousands, but it’s also the safest approach, particularly if your company is going to have more than just one shareholder. In that case, you will want customized documents that provide clarity around important matters like ownership rights, governance of your company and future transfers of interests–just to scratch the surface. And if you end up with different categories of investors, such as founders on the one hand and pure financial investors on the other, then you will get into questions of equity vesting and liquidation preferences. You may find off-the-shelf forms that get close, but they will never match what you are trying to accomplish.
On the other end of the spectrum, if it is just you as the owner, and your estate planning is simple, you can probably get by with forming your company on your own or through an online provider. In particular if you form an LLC, it is hard to mess these up. Keep your LLC’s finances separated from your personal ones, and you will be all right. If you form a corporation, however, I recommend hiring a lawyer or using a good formation services that will provide you with all the corporate niceties, which are more important for corporations.
