Legal Question in Business Law in California

I am a CPA in California and I incorporate my clients and advertise incorporation as a service. I do not give legal advice although I do mention that there is asset protection for people who incorporate. However, whenever there are two or more unrelated parties I have to defer the work to an attorney so that there is a legal agreement between the parties. My question is, can I do the "mechanics" of corporation and then have an attorney come in and draw up the articles? If so, could I give the client one bill with the attorney's charges separately itemized. I was even thinking about having the attorney speak with me, when I gave a presentation. Do you see any fault with this concept, or could someone argue I was practicing law without a license?


Asked on 9/27/10, 8:33 am

2 Answers from Attorneys

Tony Carballo Carballo Law Offices

Everything you are doing is practicing law. Just the act of advising people as to whether to incorporate requires legal analysis and advice. Helping people fill out the incorporation papers (except acting as a typist only and typing what the client wants) constitutes practicing law without a license. You, of course, can give advice about corporation taxation and accounting issues as a CPA but that is only part of the consideration as whether a corporation, LLC or some other form of legal entity is best for a client. No only are you likely violating criminal statues by practicing law without a license but you are also exposing yourself to civil liability and making yourself subject to suspension by the entity that licensed you as a CPA. Best would be to have the attorney do the incorporation. It is not worth the risk to you and I am sure that what you want is the tax and accounting work from the client and not the relatively small fee related to the incorporation. So just find a lawyer whom you can refer those clients for possible incorporation and get a reduced fee from the attorney for your clients.

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Answered on 10/02/10, 8:58 am

Mr. Carballo is entirely correct. You cannot do what you are doing.

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Answered on 10/06/10, 11:39 pm


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