Rocco E. Cozza • October 15, 2019

Many people search “how to set up an LLC” online, thinking that it is something that is simple to do.  They may have a small business and someone told them they should be protected.  They perform a little research and determine that an LLC is the right entity for them.  (I won’t get into the detail of why it is important to speak with a professional about entity choice, but trust me it is).  Once they make the determination to set up an LLC, they go ahead and do it themselves.  See, in all honesty, most of the state filings to set up an LLC are very simple and take less than 20-30 minutes to complete. But that is the smallest piece to an LLC.

How to Set Up an LLC – What you need to know.

On top of your state filings (articles or a certificate of organization), there are quite a few other documents one needs to have to ensure the LLC provides adequate protection.  Just filing your state paperwork to create the entity doesn’t cut it.  Yes, in theory, you have a limited liability company.  But without the other pieces, it is like a house of cards.  It can crumble at any time.  And it will.

Problem 1 – Poor or No Operating Agreement

For example, a small business owner that formed their LLC online without an attorney got sued.  Not just the business, but the owner as an individual as well.  The owner thought that the LLC will protect him from the claim brought against him as an individual.  When he submitted the claim to his insurance carrier, the carrier asked to see the operating agreement.  The owner, feeling good, sent the carrier his operating agreement.  This was a document that he downloaded off some website thinking that he was covered.  Sadly, the insurance company denied coverage of the individual claim.  This denial cost this person over $10,000 in legal fees to defend the individual claim.

The reason the claim was denied:  the operating agreement was missing key language needed for an insurance policy for the business to cover claims against an owner.  Unfortunately, this business owner, like many others out there, was pennywise and pound foolish.  The owner had spoken to a few attorneys on how to set up an LLC and was quoted around $800-$1,000 to do so.  Because he didn’t want to spend that amount of money for something he felt and was told, he could do himself, he decided to play lawyer.  That attempt to save $1,000 led to a $10,000+ loss.  All because he did not have the expertise to know what he needed.

Problem 2 – Lack of Proper Financial Advice

Another problem I have seen with people setting up an LLC without the help of a qualified attorney is that they don’t get the advice they need.  There are certain things an LLC owner must do to ensure the legal protection shield remains intact.  When I meet with a client to hand over their new created entity, I spend a decent amount of time outlining the compliance items they need to have in place.  Owning an LLC is not as set it and forget it.  There are ongoing obligations to ensure adequate protection.  From creating a wall between personal and business finances to having an organizational and annual meeting, these are just a few of the things one must do.

Let’s take the finances for example.  Comingling finances is one of the biggest reasons a court will “pierce the corporate veil” and allow a plaintiff to get the assets of an individual owner of an LLC.  One transaction can do it.  One inadvertent transaction.  But you need to understand how the money needs to flow in and out of an LLC to make sure that you are putting yourself in the best position.  This is why working with a skilled attorney to set up your LLC is crucial.  They will be able to provide you the advice you need when it comes to finances.

Problem 3 – Lack of Documentation

Another common misconception people have that set their LLC up themselves is there is no requirement for annual maintenance.  They believe that their articles of organization are all they need.  Unfortunately, they are greatly mistaken.  Banks, future partners/investors, landlords, and even the IRS will request organizational and annual meeting minutes to ensure the organization is not a sham entity.

We have talked about the importance of an operating agreement, but let’s now discuss the ongoing documentation an LLC should have.  Because the LLC needs to be treated as an entity separate from you the owner, certain decisions and acts of the organization should be documented.  This process shows that you are maintaining the entity and respecting the separation you must have from it.  This documentation includes:

  1. Meeting minutes, which should be done at least annually if not quarterly
  2. Resolutions authorizing certain transaction in accordance with your operating agreement
  3. Any ongoing state or local business filings an LLC is required to make in the jurisdiction in which it is located

Beware of Doing it Yourself

As you can see, an LLC is not just a set it and forget it entity.  When searching how to set up an LLC, you won’t find a lot of this information out there.  A lot of the do-it-yourself websites want you to feel that it is easy to set-up and you can do it without a lawyer.  Unfortunately, that is not the case and doing so is an extremely risky move for a business owner.  This article is not meant to frighten or scare you into using an attorney.  I am aware that a lot of you out there will not.  I want to merely educate you on the risks involved with the improper set up of an LLC.  Despite “how to set up an LLC” being a topic frequently written about, that doesn’t mean it is something you should do yourself.

But if you decide to do so after learning how to set up an LLC, I still want to help.  I have created a LLC compliance checklist that is available for free download.  Now understand that the checklist is merely educational in nature and in no way establishes an attorney-client relationship.  You should always seek the advice of your own counsel.  But if you would like to download the checklist, just click here.

Cozza Law Group Business Law Blog

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How Business Litigation Protects Companies From Costly Disputes

By Rocco Cozza • April 19, 2026
How Business Litigation Protects Companies From Costly Disputes Although there are many costs involved in doing business, disputes can take a particularly high toll on a company's finances. These disputes might involve contract breaches, copyright violations, premises liability lawsuits, allegations of fraud, and much more. The obvious strategy is to avoid these disputes at all costs. How does business litigation fit into this equation? Can a company use business litigation to strategically protect itself from disputes? These are questions you might want to explore with an experienced business litigation lawyer in Pittsburgh . Business Litigation Strategies Are Often Preventive in Nature Many business litigation strategies are preventative in nature. In other words, companies take effective, early legal steps to eliminate the chances of disputes and legal action at a later date. One example of this is an effective business contract. When drafted properly, a business contract leaves little room for litigation or any other disputes. Many contracts contain arbitration or mediation clauses. These clauses force parties toward private negotiations instead of the courtroom floor. This private “alternative dispute resolution” (ADR) process is inherently cheaper, faster, and more private than litigation. Once a dispute reaches the courtroom, companies must pay much higher legal fees. They also face longer timelines. One of the biggest downsides of litigation for companies is its public nature. Many companies desperately need to keep sensitive information out of the public eye, whether that includes baseless allegations, copyrighted material, trade secrets, or more. Private negotiations can be so quick that they can hardly be called “disputes,” and issues may be resolved in a matter of weeks. In an ideal world, these disputes never even happen in the first place. A strong contract lays out clear responsibilities and privileges for each party, leaving little room for misinterpretation. Another obvious way to avoid business litigation is by choosing appropriate business partners. Another preventative business litigation strategy involves liability waivers. Although these waivers are not as effective as some company leaders assume, they can nonetheless prevent many needless or frivolous lawsuits. Liability waivers are not appropriate or possible in all industries, but they could be worth considering for businesses that welcome large numbers of patrons onto their premises. Business Litigation Strategies May Involve Regulatory Compliance Sometimes, the biggest legal threat to a business is not a partner or a customer, but rather the government. Regulatory compliance is an incredibly important business litigation strategy, and company leaders should consider consulting with lawyers who understand the specific regulations and laws that pertain to their industries. For example, a company that deals with industrial waste or chemicals may need to become highly familiar with the environmental laws. Generally speaking, these laws become more restrictive each year. Company leaders may need to keep a close eye on regulatory changes to ensure compliance. A company in another industry might deal with a substantial number of employees. If this is the case, the company might need to pay close attention to labor laws, discrimination laws, religious rights, and many other factors that can lead to employment lawsuits. Poaching is another issue that could be concerning, as are non-compete clauses. An experienced business litigation law firm may be able to help companies draft policies and contracts that drastically limit the number of employment-based legal issues in the future. For example, a company might have to follow strict guidelines if it wants to create enforceable non-compete clauses in Pennsylvania. Organized Corporate Governance Can Reduce Litigation and Disputes Many business disputes stem from poor, disorganized corporate governance. When the working relationship between shareholders, partners, and the executive suite begins to fall apart, disputes are inevitable. Effective shareholder agreements and organized record-keeping can go a long way in making sure everyone is on the same page. Business Litigation Attorneys Can Help With Risk Assessment Sometimes, dispute prevention starts with risk assessment. If company leaders become aware of a potential legal risk, they might consider a different approach or business strategy. For example, a company might consider entering into a new contract with a supplier. A business litigation attorney may be able to conduct effective legal research into the new supplier to determine the legal risk associated with a new contract. Perhaps the new supplier tends to get into lawsuits with its partners. Maybe the company is already in the process of being sued. Whatever the case may be, an experienced lawyer can help company leaders assess the legal risks associated with certain actions before moving forward. Most Disputes Never Reach the Trial Stage Since parties usually understand the downsides of going to trial, they tend to settle their disputes outside of court. This means that disputes rarely escalate into trials. However, this does not necessarily mean that a privately settled dispute is not costly for a company. Instead, a settlement could be disastrous for a company. This is why it makes sense to negotiate effectively, even if you’re dealing with someone who agrees to mediation or arbitration. Business litigation attorneys are often effective negotiators, and they can guide both parties toward mutually beneficial outcomes. If the goal is to reduce the cost of a dispute, a lawyer can push back with effective counterpoints and counteroffers. If the goal is to gain as large a settlement as possible, your lawyer can advocate on your behalf and reject lowball offers. Can a Business Litigation Lawyer in Pittsburgh Help My Company? Whether you are facing a dispute or you simply want to avoid the possibility of legal action in the future, a business litigation lawyer in Pittsburgh may be able to help. These lawyers can help your company take preventative steps, such as creating effective contracts or liability waivers. A business litigation attorney can also help you if your company is already facing a serious dispute or lawsuit. Consider reaching out to Cozza Law Group, PLLC, at (412) 790-2789 to learn more about your next potential steps. You can also find us online .