Starting a Small Business?: Don’t Go It Alone

After making the decision to start your own small business, it is a smart idea to make an experienced business lawyer an integral part of your team as soon as possible. He or she will help you to determine which type of entity to form, and then relieve you of the burden of preparing the documents and making sure things are set up properly. This can potentially save you huge headaches down the road. While you may think that forming a company is just simply filling out a short form and filing it with the State, it can and should be more involved than that.

Your circumstances and your plans for the business may dictate which entity is best. For instance, a limited liability company may be the right choice if you will have several members in your company and you wish to have different voting rights for certain individuals. The flexibility of an LLC may be just what you need, and you will want to ensure that an Operating Agreement is prepared that correctly sets things up. You may also want a noncompetition provision included in the agreement, so that members of your company are not out assisting or otherwise associated with any competing businesses. If you anticipate that your product or service will eventually attract sophisticated investors, a C corporation may be a good idea. All of these considerations are things that an experienced business attorney can handle. You will have many other things on your plate to deal with, and trying to cut and paste some random form you found on the internet is simply not a good idea. Choosing between an S corporation, a C corporation, a LLC, a general partnership or a limited partnership should be a decision that is made only after consulting with a knowledgeable business lawyer and your tax advisor. And then a proper set of Bylaws, Operating Agreement, or Partnership Agreement should be prepared.

This is not the time to try to save a few bucks and attempt to go it alone and do it yourself– even if a TV commercial or internet ad makes it looks so easy. Attorneys who routinely help small business owners should be able to give you a reasonable flat fee to get the business properly formed, and the potential problems you avoid down the road will more than justify the investment.

About the Author

Richard Delonis is a Michigan business attorney with Szura & Delonis, PLC (Southfield / Metro Detroit). He helps entrepreneurs and small-business owners form and operate Michigan companies, draft and negotiate contracts, and resolve business disputes. He brings a practical, business-minded approach shaped by real operational leadership experience, and he advises clients throughout Michigan, including Oakland, Wayne, Macomb, and Washtenaw Counties.

Frequently Asked Questions: Starting a Small Business in Michigan

1) Do I really need a lawyer to start a small business?
Not always—but getting legal help early often prevents expensive problems later. A business attorney can help you choose the right entity, set up the right documents, and avoid “quick fixes” that don’t fit your goals. If you plan to add partners, raise money, or sign important contracts, early guidance matters.

2) What business entity should I form in Michigan (LLC, S-corp, C-corp, partnership)?
The “best” entity depends on your goals, taxes, ownership structure, and risk exposure. For example, many owners like LLCs for flexibility, while some businesses choose a corporation structure when planning for outside investors. It’s a decision you should make with your attorney and tax advisor.

3) If I form an LLC, do I really need an Operating Agreement?
Yes—especially if there’s more than one owner (member). An Operating Agreement sets rules for voting, profits, management authority, what happens if someone wants out, and how disputes get handled. It’s one of the most important “do it right the first time” documents.

4) What documents do corporations need (besides filing with the State)?
Corporations commonly need bylaws, initial resolutions, stock documents, and a clean record-keeping system (like meeting minutes and corporate books). These basics help protect the liability shield and make your business easier to run, finance, and sell later.

5) Can I use a template from the internet to form my business?
Templates can miss key terms, conflict with your goals, or fail to address real-world issues between owners. Many “cheap” forms create expensive messes later—especially when partners disagree, money is tight, or someone exits the business.

6) Should I include a noncompete or nonsolicitation clause between owners or key employees?
Sometimes—if it fits your business model and relationships. These clauses can help protect the business if a key person leaves and tries to compete or pull customers away. The details matter, and they should be drafted to match Michigan law and your specific situation.

7) When does a C-corporation make more sense for a startup?
If you expect to pursue outside investors, issue different classes of ownership, or build toward a larger scale structure, a C-corporation may be worth considering. The right choice depends on your growth plan, tax posture, and fundraising strategy.

8) How much does it cost to have a lawyer help start a business?
Many law firms offer flat-fee formation packages for common entity types, which can be a cost-effective way to get set up correctly. The price depends on complexity—like multiple owners, special voting rights, investor readiness, or custom contract needs.

9) What are the most common legal mistakes new business owners make?
Picking an entity without thinking through taxes and ownership, skipping the operating agreement/bylaws, using generic internet forms, failing to document owner roles and contributions, and signing contracts without understanding risk-shifting terms.

10) Where can I get help with Michigan business formation and contracts?
Visit our Business and Corporate Law page or contact our office to discuss your situation.

Disclaimer: This FAQ is for general information only and is not legal advice. Business formation choices depend on your goals, taxes, and specific facts.