Here is what Fortune said:

To hear local entrepreneurs tell it, Durham is putting the D in diversity. Once known for tobacco and textiles, today it’s part of The Research Triangle, the world’s largest research and development center. The city is home to an array of high-tech, medical and financial services companies, as well as federal agencies and educational institutions.

The locals are a highly educated bunch: Duke University, North Carolina Central University and Durham Technical Community College employ and train area residents. Business support organizations like the Institute for Minority Economic Development and the Women’s Business Center offer the resources entrepreneurs need to thrive.

The city’s strong sense of community helps its assorted enterprises and individuals come together. It’s the kind of place where businesses embrace struggling local schools by donating supplies, volunteering classroom speakers and hosting field trips.

Living, business and construction costs remain low compared to national averages. Another local perk: Durham offers plenty of ways to unwind after a hard day’s work, from kayaking and hiking to performance art and gallery tours.

I’d love to hear from people who have started in Durham and in other places. What has the Bull City experience been like?

Volunteer lawyers will be available to advise on entity formation and start-up issues, contracts, leases, employment, termination, collections and other general business questions that face starting and growing businesses.

The clinic will be held at the Small Business Center, SOUTHBank Building, 400 W Main Street, Durham, NC 27701, from 10 a.m. to noon. Space is limited. Please call for an appointment, 919-686-3448 .

NC LEAP assists low-wealth entrepreneurs with their legal needs in starting or expanding their businesses through pro bono service by North Carolina business and transactional lawyers. Services range from basic transactional legal needs as struggling entrepreneurs strive to establish their business and create jobs, to potential long term client-counselor relations as their businesses grow.

The Durham Technical Community College Small Business Center is a state-funded organization which is part of the Small Business Center Network of North Carolina. The Small Business Center provides small business owners with information they need for success, including advice on marketing, sales, bookkeeping, and management.

Today, I am following up that post with the view from the attorney’s perspective. Almost every corporate attorney I know has spent hours cleaning up DIY-formations. Here’s a sampling of what we fix:

• Selecting the wrong entity. Probably the number-one question I get is C-corp, S-corp or LLC? Astoundingly to me, people often embrace the recommendations of their brother-in-law, mechanic or neighbor and resist the advice of legal and tax professionals (as in “my brother-in-law has an LLC and says that’s what I need to be”). The differences between the different forms of organization in the eyes of the IRS can result in significant amounts of money. And it is very easy to make a wrong choice or check the wrong box on a confusing tax form.
• Failing to complete all steps of formation (no bylaws or operating agreement, failure to make timely IRS filings, failure to name officers, directors or managers, failure to issue stock or hold an organizational meeting).
• Not obtaining an EIN, getting an “extra” one or getting one when you don’t need it. The rules governing when you do and do not need a new EIN are more complex than any rational person would imagine, unless they work for the IRS. Sorting this out can take hours away from your core business.
• Picking a corporate name that violates a third-party’s trademark. Think about all the time and money you will have wasted in promotional materials, signage and branding if you find out downstream that your business name violates another person’s trademark. You also need to protect your company’s intellectual property (business name, trademarks, copyrights, inventions, trade secrets).
• Not addressing and minimizing other risks (appropriate insurance, good form contracts, good business practices, proper use and treatment of assets, etc.).
• Failing to have buy-out agreements. If you do not have an appropriate operating agreement, or shareholders agreement, you’re saying that you’re perfectly comfortable knowing that one morning you might wake up and find that your new partner is the pothead/slacker son of your old partner.
• Not holding annual meetings. Corporations must hold annual meetings of shareholders and directors to name directors, approve major decisions such as bonuses, benefits, leases, name changes, changes to the capital structure, etc. If you’re audited, one of the first things the IRS asks for is the Corporate Minute Book.

In addition to being able to help you select the proper entity and place of filing (Nevada, Wyoming, Florida, Delaware or the Old North State), good business attorneys will connect you to other reputable professional service providers — bankers, accountants, insurance agents, financial planners and web designers. We know where to send you for free or low-cost business services to make sure your business plan is sound, or to get assistance with Quick Books, marketing, sales or hiring employees. We will make sure your ongoing filings with the Secretary of State are current and that the corporation is holding requisite annual meetings. In short, we take an ongoing professional interest in your success.

I am really interested in the local experiences, good and bad, with attorneys and DIY formations.

Not everyone realizes that business owners are able to file Articles with the North Carolina Secretary of State on their own without an attorney. In addition, there are many services around that can help entrepreneurs form corporations or limited liability companies (LLC). These include online services, forms from books/guides sold in office supply stores, and online forms available from the Secretary of State.

So, do you really need a lawyer to form your corporation?

Yes. Well … maybe…

Let me ask you some questions: Should you form a C-corporation, an S-corporation or an LLC? What do you do after you file your articles? What assets should be transferred into the company and how do you do it? What do you need to do to maintain your limited liability? If you don’t know, or you don’t understand the differences between the available entities, you probably shouldn’t form your own corporation.

If you don’t know, none of these cost-saving services are going to be able to tell you; that’s unauthorized practice of law. They can tell you what’s on the menu, but they can’t recommend what to order. And the problem with a bad choice is not mere indigestion. Setting up your business entity incorrectly or incompletely can lead to tax penalties, unprotected personal assets, no limited liability and lost peace of mind.

Forming an entity without legal counsel works best for single-member entities that don’t expect to bring in additional owners or outside capital, hire employees or set up multiple locations (particularly multi-state locations). It may also make sense to set up your own entity if you had an attorney set up a prior entity, and you are following a similar business model, with the same people as before, and nothing has changed in any of their lives. In reality, of course, every deal is different, people change, laws change, and the structure that you used last year may not be the best structure this year for this situation.

What an attorney adds.

While many people have used these services and are happy with the results, almost every business lawyer I know has a story (or two or three) about incomplete, incorrect or ill-conceived formations done by clients “going commando.”

If you plan to raise money from outside investors, hire employees, open multiple business locations, pay only those taxes that you really owe, or if your business is in a highly regulated field, you absolutely need the services of a competent business attorney. By the time you fill your online shopping cart with your best guesses, you are getting close to what you’d pay for an attorney…and you are getting a lot less for your money the online route.

In addition to being able to help you select the proper entity and place of filing (Nevada, Wyoming, Florida, Delaware or the Old North State), good business attorneys will connect you to other reputable professional service providers — bankers, accountants, insurance agents, financial planners and web designers. We know where to send you for free or low-cost business services to make sure your business plan is sound, or to get training on Quick Books, marketing, sales or hiring employees. We will make sure your ongoing filings with the Secretary of State are current and that the corporation is holding requisite annual meetings. In short, we take an ongoing professional interest in your success.

Bottom-line: if the initial organization is not done correctly and completely, or if you choose the wrong form of entity or state of incorporation, the costs to unravel the errors greatly exceed the savings of “doing-it-yourself.” As they said in Ghostbusters, “Who ya gonna call?!”

If you have decided to form your own entity, particularly using an online service such as Legal Zoom, The Company Corporation, BizFilings, etc., a couple caveats:

1. As with any significant online purchase, research the vendor. Find people you know who have used these services personally (ask around on Facebook, LinkedIn, or Twitter) and ask about their experience. Check with the Better Business Bureau and the NC Department of Justice for complaints on file. What are your options if things go bad? Can you get your money back?

2. This may not be the time to go with the cheapest alternative. The low rates advertised are often “teaser” rates and the companies will try to upsell you at every turn. Make sure you know what you are getting, and most importantly what you are not getting. Understand what you need to have a complete formation, and what comes in each price-point package. How long does it take and how much does it cost to get it faster? By the time you add express services and ala cart documents (shareholders agreement, DBA, tax filing documents), the price may not be that different from an attorney’s fee.

I realize that every profession has its “princes” and its “toads” and the legal profession is no different. There is no shortage of bad experiences with attorneys, and a quick internet search shows no shortage of bad experiences with do-it-yourself strategies. I’d love to hear what has worked and hasn’t worked for you.