Preparing LLC Documents Under New Iowa Law

The post that has probably attracted the most attention on my blog is a post titled "Zoom Past LegalZoom," The reason is simple. Most new business people desire to save expenses when starting a business. One of the places these entrepreneurs cut corners is by using a document preparation company instead of a lawyer for incorporation and/or limited liability company (LLC) formation. In many cases, LegalZoom and other similar companies are less expensive than hiring a lawyer. While searching for LegalZoom information on the Internet, people often come across my post discussing why I believe using LegalZoom is a bad idea.

If you look at the comments on the post, you will see that others don't exactly share my view. Several commented that they were happy with the LegalZoom service. I don't make excuses for my bias though. I am a lawyer and I believe professional advice is better than a document preparation company any day of the week. Particularly if the costs are somewhat similar, which is often the case with Iowa business lawyers.

But if you are starting a new LLC in Iowa, particularly one with two or more members, I am even more adamant in my view that you should seek legal advice instead of cutting corners. As discussed in an earlier post, Iowa changed its LLC law effective Jan. 1, 2009. The law consists of several major changes. Frankly, I just don't see how a document preparation company can be up to speed at this point with those changes. (Unless of course they copied Marc Ward's outline from his recent LLC law seminar). As you can see from one of Marc's recent posts, even Iowa lawyers have differing statutory interpretation of some of the changes.

Typically, a company like LegalZoom will assist you in one thing, and one thing only: getting you the documents you need in order to incorporate or form your LLC. The bottom line though is that purchasing LegalZoom's documents is not equivalent to receiving legal advice, and when it comes to new LLCs in Iowa, legal advice is exactly what you will need. Don't cut corners - at least not this year.