Top Types of Business Formations in Past Year
Apparently thousands of Americans are not heeding dire warnings that Obama’s tax plan is going to ruin small business owners. (End sarcasm). Last year LegalMatch.com received thousands of requests for business formation lawyers. Our respondents told LegalMatch they were looking to create the following types of businesses:
- LLC (limited liability company): 45%
- Corporation: 17%
- S Corporation: 15%
- Nonprofit: 9%
- Partnership: 8%
- LLP (limited liability partnership): 3%
Don’t they realize there is an impending war on the rich and on business owners?! That this country is going to be socialist before the year is over?!?! (OK, now I am really ending the sarcasm, I promise…)
All jokes aside, LegalMatch.com statistics support the conventional wisdom that LLCs are the most popular type of new business in the country. Limited Liability Companies are a relatively new invention, but a powerful tool if one wants to limit their exposure while running a business.
Are lawyers helping this increase? Lawyers typically operate LLCs when they form their own small firm. The tanking economy is affecting everyone, attorneys included, and more and more attorneys are looking to go it alone. Newly minted attorneys, thousands of whom are regularly churned out every year, are facing stiff competition in a vastly shrinking field. Business is so bad (or is it good?) that an online university offering courses on how to build and run a solo practice has recently opened. Because clearly, the best thing a recent law graduate can do is spend more money on school. (I thought I stopped being sarcastic?)
Obviously new grads aren’t the only ones going it alone; the vast majority may be experienced lawyers or attorneys with a year or two already under their belt. As more and more biglaw firms collapse, we may be seeing more and more fragmenting in the legal community. This could be good thing for clients and attorneys. More lawyers competing may mean lower fees for our services, and more new lawyers getting out of their biglaw basements and acting like real attorneys means more experience and possibly more options down the line. In every crisis there is an opportunity; is now the time for a change?