I'd say the dos and don'ts of creating a free company have more to do with your philosophy, rather than what methods you take.
First, consider the purpose of your group, and whether it suits a free company. A free company is made for a large number of players to get together to achieve common goals. The advantages of belonging to a FC are having a large pool of people who may help you (In return for your help), reduced prices on teleports depending on the FC's standing with an area, and FC-wide buffs. The latter two are where a FC has an advantage over a linkshell, and are why it's a much better idea to have a large FC than a small one: More members means points go up faster which means standing shoots up and you can afford to use the buffs.
Now, you may be interested in a linkshell instead. For instance, if you're only interested in having it comprised of you and your partner, it's probably best if you just join an FC together and use friends lists. Similarly, if your goal for the group is not progression, but more social in nature (Such as an RP group, or folks who share a common hobby), it would be a better idea to form a linkshell so everyone can keep in touch, while allowing folks to join free companies for progression. Finally, it's easiest to join an existing free company.
Now, that all said, if you plan on trying to make your own mark as the leader of a group, or are unsatisfied with the existing free companies on your server, go ahead and make a free company that you'd be proud to call yourself a member of.