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Given that 90% of businesses fail in their first year of business it’s important to guard against the risks. Of all the costs of a start-up, getting good legal advice is a priority. It sets you up for success and protects you in the event of failure too.
Are you starting your own business? There’s so much to think about. Don’t forget these 7 reasons why a business attorney is essential when starting your business.
Need a Business Attorney?
You might think it’s obvious what a business attorney is but you might be surprised at how wide the brief is.
A business attorney focusses on legal matters that affect a business in the same way that criminal defense attorneys specialize in defending their clients against criminal prosecution. It’s one of the specializations in the legal profession.
You might expect an attorney to represent you in court. You’d be right but they do much more than that. They might also advise you on business matters such as business transactions, taxation, and intellectual property.
A business attorney may engage in legal research on your behalf. They may write legal documents for you. They may negotiate with others on your behalf.
Choose a good business attorney and they can be very helpful when setting up a business for the first time.
1. What Business Structure?
One of the first decisions you will need to make when setting up a business is what business structure is appropriate. The options make a difference as to how your business will be owned, taxed and even managed.
The simplest form of business structure is a sole proprietorship. That is where one owner has sole ownership and legally the business and the person are the same.
If there are business debts they are your personal debts. If someone sues the business, you are personally liable.
This form of business entity can be owned by more than one person. In that case, it is called a general partnership but the legal liability is practically the same.
The legal liability of business owners can be limited. This is done by forming a limited liability partnership, limited liability company or even a corporation. In these cases, the legal liability of the owners is limited to the amount of money they have invested.
There are yet more options. In the case where some partners have full liability and others do not the business, the business entity is called a limited partnership. Nonprofit corporations have their own rules.
A business attorney can help you decide which of these options is right for you and your business.
2. It’s Just a Name
There are legal implications to consider when you name your business. Don’t print business cards or design your web page until you’ve checked the rules with a business attorney.
Some of the rules concern the uniqueness of your business. You can’t use a name that is already claimed by another business.
It might also be risky to have a name that infringes on another business’s trademarks. By the same token, you may want to protect your business by trademarking your business’s name. There are legal rules and criteria you need to meet to be able to do this.
A business attorney can advise and help you with all matters concerning your business name.
3. Focus on Your Business
A business start-up is a challenging time for a business owner. There are lots of things to do. Your focus is likely to be on marketing and operations.
The last thing you want to do is learn about all the legal matters that affect a business. This is can be time consuming and technical. It’s a distraction from the important work you need to do to establish and build your business.
Having the legal issues handled by an attorney frees you up to focus on your business priorities.
4. Protect Your Intellectual Property
As well as trademarks, your business may have other intellectual property that needs to be protected. Your packaging, logo and even marketing slogans have a value. You won’t want your competitors to steal them but getting protection for them is a legal process that needs skill and experience.
Your intellectual property may also include images, the written material on your website and printed materials too. These can be protected by copywrite law.
If your products are invented by you they can be protected from unauthorized copying. Patents are a specialized area of business law that could be vital to preventing other businesses from profiting from your invention.
5. Get Contracts Right
Your business will have contracts with suppliers and service providers. You will also have contracts with your customers. These contracts set out the rights and obligations of the parties to these legal agreements.
Contracts cover financial and property transactions, information, and employment relationships.
A poor contract can lead to damaging disputes. A good contract can ensure that you get paid for your products, work or services.
6. Employment Law Issues
Employing people introduces a wide range of additional challenges for a new business. Federal and state laws regulate the employment relationship. Failure to follow the regulations can lead to litigation and fines.
Anti-discrimination laws, immigration rules, workplace safety regulations, and regulations about pay and hours are all areas of employment law that your business attorney can advise you on.
They can also help you set up the right procedures and policies so you get training and management right.
7. Risk Management
Running a business involves managing risks. Risk management is about preparing for the likely risks and especially the most serious ones. It’s important to be prepared to prevent legal problems arising.
A business attorney can help you with your risk assessment and preparedness.
Talk to a business attorney very early. Do it before you set up your business so you do it right, the first time. Better to be prepared.
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