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Accountant or Attorney 1st?
- Thread starter rlee53
- Start date
Lawyer first. The accountant doesn't have anything to set up until you are a true business entity recognized by the corporation commission. Banks won't talk to you until you have a tax ID number.
--Scott
--Scott
accountant...you want to talk through the business types (sole, Scorp, etc.) to see what works for you. Most also have an attorney they can recommend for the incorporation if needed. The tax side is more important because it could change your business plan or whether you go into business at all...
ZCP
ZCP
DonPhillips
Structural
I agree - accountant over attorney, unless you are forming a partnership or something complex. In addition to the EIN for taxes, you need to decide on accounting method, amortization schedules for purchaes, your cash flow model, etc. Filing with the state to register the corporation is pretty straightforward and does not need an attorney, unless, as I stated, you are planning a partnership where you want to protect yourself.
Don Phillips
Don Phillips
GregLamberson
Petroleum
Accountant absolutely unless you are starting with a controversial premise, for example, if you are starting a business based on work performed for a previous employer and there may be infringement issues.
Otherwise, go to the accountant. A good CPA can guide you with best business structure depending on your situation, i.e. to provide you the most advantages while paying the least amount of taxes. I happen to have 2, an LLC (Limited Liability Company) and an S-corp (long story on why I have the 2, but they serve different purposes).
The CPA, or at least mine, can also file all of the paperwork for you. Or, once you find out the structure and the State you want to form it in (and it may not be the State where you live), you can go to a formation company, such as The Company Corporation and they will set it up for you and your CPA can handle it from there.
Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:
Otherwise, go to the accountant. A good CPA can guide you with best business structure depending on your situation, i.e. to provide you the most advantages while paying the least amount of taxes. I happen to have 2, an LLC (Limited Liability Company) and an S-corp (long story on why I have the 2, but they serve different purposes).
The CPA, or at least mine, can also file all of the paperwork for you. Or, once you find out the structure and the State you want to form it in (and it may not be the State where you live), you can go to a formation company, such as The Company Corporation and they will set it up for you and your CPA can handle it from there.
Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:
I would say NEITHER...until you educate yourself more about the business of starting a business.
There is a wealth of information out there on types of business entities, accounting practices, How-To books, SCORE, ad infinitum. Why not take advantage of the information before you start spending money on purchasing advice?
You really should do the prototyping exercise of running the numbers for a business proposition, investigate types of business entities that may / may not suit your particular situation, and writing your own business- and marketing plans yourself. That will give you the knowledge to speak intelligently to advisors if you need to do so. And a dose of reality of what you are trying to get yourself into. I ran my amateurish business plans in front of some successful friends with businesses and they shot me down in flames over and over again until I got it right. How can you pay for that kind of information?
Case in point: when I started my solo company, I went S-Corp because of friend's advice and research. LLC did not exist at the time. I got freebie spreadsheet templates from the internet for company finances. I played with those things for weeks doing what-if scenarios that really opened my eyes. I pored over IRS documents to understand this mess we call taxes and my liabilities to them. I investigated opening my business in states different from my own, but settled on my own anyway. My state ~required~ me to use a lawyer for this process. He charged me $600+ to give me papers to sign and send to the Secretary of State's office. I saw recently on the internet that a company can be started online quite cheaply and registered in Nevada (that seems to be the "cheapo-startup-state" of the moment). My wife does our books (for a part time salary that our company pays her) on accounting software purchased at an office store. It's very simple for the consulting-only business that I do. We have it checked once a year by an accountant. We have both taken accounting classes just for fun and better understanding. Let me assure you...that ain't hard, either. But as the volume of financial transactions gets greater and greater, that is definitely something you want to hire someone to do for you.
It depends on how much you're going to jump into it right from the start. That will determine how much advice you really need.
TygerDawg
There is a wealth of information out there on types of business entities, accounting practices, How-To books, SCORE, ad infinitum. Why not take advantage of the information before you start spending money on purchasing advice?
You really should do the prototyping exercise of running the numbers for a business proposition, investigate types of business entities that may / may not suit your particular situation, and writing your own business- and marketing plans yourself. That will give you the knowledge to speak intelligently to advisors if you need to do so. And a dose of reality of what you are trying to get yourself into. I ran my amateurish business plans in front of some successful friends with businesses and they shot me down in flames over and over again until I got it right. How can you pay for that kind of information?
Case in point: when I started my solo company, I went S-Corp because of friend's advice and research. LLC did not exist at the time. I got freebie spreadsheet templates from the internet for company finances. I played with those things for weeks doing what-if scenarios that really opened my eyes. I pored over IRS documents to understand this mess we call taxes and my liabilities to them. I investigated opening my business in states different from my own, but settled on my own anyway. My state ~required~ me to use a lawyer for this process. He charged me $600+ to give me papers to sign and send to the Secretary of State's office. I saw recently on the internet that a company can be started online quite cheaply and registered in Nevada (that seems to be the "cheapo-startup-state" of the moment). My wife does our books (for a part time salary that our company pays her) on accounting software purchased at an office store. It's very simple for the consulting-only business that I do. We have it checked once a year by an accountant. We have both taken accounting classes just for fun and better understanding. Let me assure you...that ain't hard, either. But as the volume of financial transactions gets greater and greater, that is definitely something you want to hire someone to do for you.
It depends on how much you're going to jump into it right from the start. That will determine how much advice you really need.
TygerDawg
GregLamberson
Petroleum
Do some research of course, Nolo is a good source, google them. Great material. You can find out the questions to ask.
But ask an expert early on, a good CPA (and google them also), you need to be looking for at least the following credentials:
Enrolled Agent-enrolled to practice before the Internal Revenue Service; Accredited Business Advisor/ Accredited Tax Advisor/Accredited Tax Preparer; Accredited by the nationally recognized organization Accreditation Council for Accountancy and Taxation (ACAT).
That is what I use and only get charged the fees for tax preparation, the great advice and tax strategies keeps me around. The reason I got an MBA was to be able to manage my own business better. But I still go with the pro's when dealing with business arrangements, accounting rules, pros/cons of structures, taxes. The rules change constantly. And I am solo and just don't have the time required to manage it all. So I farm that part out.
They (CPA) will normally provide you an initial consultation free of charge and will be able to wade thru all of the crap that is out there and there is alot of it. I use Quicken Home & Business and used TurboTax for years and it's fine, but I would still recommend a CPA because, again, I want to concentrate my efforts elsewhere.
And I'm not being arugmentative, there is no right or wrong answer. It depends on your own abilities and if you are like TygerDawg and are diligent, detailed, and do the homework, thats one thing, but if you are like me and don't want or have the time to delve into the details, then get someone who knows. You don't have to know meat, just know your butcher. I want someone looking over my shoulder when dealing the the IRS.
Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:
But ask an expert early on, a good CPA (and google them also), you need to be looking for at least the following credentials:
Enrolled Agent-enrolled to practice before the Internal Revenue Service; Accredited Business Advisor/ Accredited Tax Advisor/Accredited Tax Preparer; Accredited by the nationally recognized organization Accreditation Council for Accountancy and Taxation (ACAT).
That is what I use and only get charged the fees for tax preparation, the great advice and tax strategies keeps me around. The reason I got an MBA was to be able to manage my own business better. But I still go with the pro's when dealing with business arrangements, accounting rules, pros/cons of structures, taxes. The rules change constantly. And I am solo and just don't have the time required to manage it all. So I farm that part out.
They (CPA) will normally provide you an initial consultation free of charge and will be able to wade thru all of the crap that is out there and there is alot of it. I use Quicken Home & Business and used TurboTax for years and it's fine, but I would still recommend a CPA because, again, I want to concentrate my efforts elsewhere.
And I'm not being arugmentative, there is no right or wrong answer. It depends on your own abilities and if you are like TygerDawg and are diligent, detailed, and do the homework, thats one thing, but if you are like me and don't want or have the time to delve into the details, then get someone who knows. You don't have to know meat, just know your butcher. I want someone looking over my shoulder when dealing the the IRS.
Greg Lamberson, BS, MBA
Consultant - Upstream Energy
Website:
Accountant before attorny.
You need money first, before you need to worry about protecting it.
"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?
You need money first, before you need to worry about protecting it.
"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
Have you read FAQ731-376 to make the best use of Eng-Tips Forums?
It's interesting that you all state that an accountant helped you choose between S-Corp, LLC, Sole Proprieter, etc. My lawyer is the one who did that for me.
Part of his practice if focused on setting up businesses. He knows the difference among all of the choices. He gave advice as to which one does what, and protects what, and costs what. And although you can file with the corporation commission yourself, I found that there were a few catches and bits of paper that need to be filed elsewhere, or published in a newspaper, that I wasn't aware of. The lawyer also has all the stock forms that are legally recognized so you can waive the responsibility of having an annual meeting, for example.
If your lawyer can't give you advice as to which business form is right for you, then go to a CPA first. Then again, you should have done enough research ahead of time to know which one is right for you. But even though filing for a business seems easy, definitly consult a lawyer. Just don't pay $600 for one.
--Scott
Part of his practice if focused on setting up businesses. He knows the difference among all of the choices. He gave advice as to which one does what, and protects what, and costs what. And although you can file with the corporation commission yourself, I found that there were a few catches and bits of paper that need to be filed elsewhere, or published in a newspaper, that I wasn't aware of. The lawyer also has all the stock forms that are legally recognized so you can waive the responsibility of having an annual meeting, for example.
If your lawyer can't give you advice as to which business form is right for you, then go to a CPA first. Then again, you should have done enough research ahead of time to know which one is right for you. But even though filing for a business seems easy, definitly consult a lawyer. Just don't pay $600 for one.
--Scott
Be smart and get both at the same time.
I found that my attorney and my accountant needed to work together to get my business set up right.
They are both important, neither one comes first, you need them both so get them both.
Charlie
I found that my attorney and my accountant needed to work together to get my business set up right.
They are both important, neither one comes first, you need them both so get them both.
Charlie
powerhusker
Electrical
I've been in busines for 10 years. I've talked to my accountant several times each year.
But I have yet to talk to a lawyer. (knock on wood)
But I have yet to talk to a lawyer. (knock on wood)
Actually you need to talk to both early. After that, you will bond closely with your accountant. I would say the accountant relationship is much more important than the lawyer side.
Pick and accountant that will actually return your calls. Ask if they can give support to Quickbooks (or whatever program you use). ALso get an undestanding UP FRONT about CPA rates and billable time.
Good luck with your startup. Its the best thing I ever did in my professional life.
Pick and accountant that will actually return your calls. Ask if they can give support to Quickbooks (or whatever program you use). ALso get an undestanding UP FRONT about CPA rates and billable time.
Good luck with your startup. Its the best thing I ever did in my professional life.
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