Barking up the wrong tree: when you do not hire a business lawyer, reality bites

What is it about?

In 2012 Scot and his co-owner, both experienced groomers, planned to open their own grooming business. Scott talked with his accountant about the best legal entity for their situation, and the accountant advised Scott that an LLC would be the best choice. The accountant steered Scott to Legal Zoom, an online legal resource that helps people form business entities, including LLCs. A few years after starting their business Scott and his co-owner reached an impasse: Scott wanted to expand the business; his co-owner didn’t. Scott talked with an attorney and learned that the standard form LLC operating agreement from Legal Zoom didn’t cover this kind of situation. How is an LLC formed? What are the consequences of a flawed LLC formation? What kinds of duties do accountants owe business owners?

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