Many others have already mentioned that for a 1-(+-)4 person "company" admin, payrol, HR, legal etc. can take up a lot of those resources' time (or money, if you get in an employee to do those), which could rather be spent on doing your core (technical) work. I have seen it time and again.
I want to chip in about the general topic of standards and methodologies. Please remember that one isn't (necessarily) better than the other - they are all simply tools working towards a goal and you use whatever tool works best in your circumstances. Now, your GOAL is the important thing: communicating between different members of the company (communication over space) and remembering (communication over time) - which sometimes is important even if you are one person. Using a formal standard to do this should accomplish several things:
- All members speaking the same "language" or format (know what to expect);
- Things should be stored in a physical or electronic medium (well-indexed), not in brains, so that interrogating that source takes only one person out of his task and not two (or more);
- Should enable the organisation to function as an organism distinct from the people that make it up - so that people joining, leaving, or just turnover influences as little as possible;
- Should be adaptable, because the organisation (from the previous point) should be a learning and developing organism.