Moonlighting Entrepreneur: The Right Side of the Law

by Trish

Moonlighting entrepreneurs are among the most ingenious folks I know! I include myself in that group, yes.

When building up a moonlighting business, they seek to do most of themselves. Good for them.

A tip about legal advice if you are interested: Hire someone to set up your entity. If you’re going to move forward from sole proprietorship, hire a law firm to help you set up the corp or LLC. I know there are kits that say you can do this on your own for less than 500 dollars. I understand if many of you just go ahead and do that, but think about my approach for just a second.

I hired a law firm in late 2004 to set up my corporation. Best money I ever spent, hands down. Cost me around 800 bucks (with all the registration fees for all the federal and state paperwork included). Fast forward a couple years, I realize my corporation paperwork is missing one piece. My lawyer has moved to practice in Israel. I’m out of luck. In those ensuing years, if I had been audited, I’d be in a heap of trouble. No proof of this certain thing that my former lawyer promised she would get to me (in the hubbub of the law firm breaking up, her moving overseas, etc., it just got forgotten; I know, I was mad, but I got over it). This very important proof to say the least.

So, earlier this year, I got a referral for another local law firm and made an appointment with them to set things to rights. Well, this law firm is much more expensive. It’s already cost me double the price of my incorporation just to get that one piece of paper put back in order. I believe it’s worth it. If it’s this much work to get my corporation in order, can you imagine if something had happened before now? What if I had been served? What if I had been in the middle of a lawsuit?

I do have this current law firm as my legal rep. I will now be protected (both by my paperwork that is now in order and by them in case any litigation does arise in future) and I feel good about that. Yes, it cost a bit of money, yes, not every moonlighting entrepreneur needs a corporation (I may dissolve mine in the near future as taxes increase), but I thought my example would help someone out there who’s dithering over details. Setting yourself up as a corporation doesn’t cost a lot (done right!) and will help in the long run.

Next time, should you hire a CPA? Well, since I’ve gone public about having a lawyer, I’ll just say, yes. Check back to find out why.

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