What are the variables that I must consider in putting together the accounting and legal fees budget?


3

I am estimating the total amount I need to spend to get things started the right way, but I can't figure out how much I should allocate for accounting and legal services.
My startup will be incorporated in the USA as a LLC and I am applying for seed funding from an angel investor.
So, what should my budget be for accounting and legal fees?

Legal Costs Accounting

asked Jun 12 '11 at 19:09
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Mario Caropreso
36 points
  • This will be very difficult to answer as a definite answer -- but if people provide what the variables are then you will know what you need to consider as you put your estimate together. I recommend editing the question to ask "what are the variables that I must consider in putting together the accounting and legal fees budget" – Joseph Barisonzi 8 years ago
  • Thank you Joseph, I hope to get more answers now! – Mario Caropreso 8 years ago

2 Answers


1

These numbers could be all over the place depending on the accountant or law firm you work with to get the drafted. Get recommendations from local companies, your chamber of commerce and interview prospective lawyer/accountants first to find a good fit. We talked to a couple attorneys first before we felt comfortable that someone actually understood our business, and could provide adequate guidance and assistance to us now and into the future. Then used a family friend for a CPA that we are now outgrowing.

  • Articles of organization, Employee handbooks & employee contracts, Customer contracts < $2,000 - A lawyer should be able to interview you, understand what you need and adjust their base templates for your needs in a day or so.
  • Time / effort for outside tax help and filling each year for a small business. < $2,000
  • Monthly accounting services, book balancing etc. - you should do most of this yourself but you can probably get help for < $500/mo

For your purposes, I would get estimates from local companies. When working on getting capital and working with investors having actual resources and quotes are going to be much better then referencing a forum thread ;)

answered Apr 9 '12 at 12:05
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Ryan Doom
5,472 points
  • Thank you Ryan! – Mario Caropreso 7 years ago

0

Mario,

I think a great way to allocate a reliable number is to contact a few firms or individuals that you would actually use and come up with a median price - then add 20%.

It really would depend a great deal on what type of business you are starting. For example, if you are developing software, the fees will tend to be a bit higher due to the specialized legal requirements. Not much, I wouldn't think with so much information publicly available but somewhat higher. Consider if you will (or your angels will require) patent app, search or other IP due diligence and perfection of your rights.

On the flip side, if you are selling a product that does not require any regulatory approval, it should be very inexpensive.

Unfortunately, without knowing your sector, I cannot be too helpful other than to provide considerations.

answered Jun 14 '11 at 05:46
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Sharon Drew
61 points
  • Thank you Sharon. The type of business I am starting is a web service in the SaaS market. – Mario Caropreso 8 years ago

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