Table of Contents
- 1. Help to Structure Business
- 2. Employee Issues
- 3. Creating or Negotiating Contracts
- 4. Government Complaints
- 5. Environmental Problems
- 6. Selling or Purchasing a Business
- 7. Personal Liability
- 8. Business Lawyers Prevent Legal Issues
- 9. Real Estate
- 10. Help with Online Business
- Want to Read More Business Advice?
The Small Business Administration (SBA) found that about one-fifth of new businesses fail in the first year. A lot of these failures are due to poor planning and execution.
When you start your own business, or even if you want to become a silent partner, you need to have a business lawyer. In fact, here are 10 reasons why every business owner should have an attorney they can consult with on important business matters.
1. Help to Structure Business
You will need to determine how to structure your small business as soon as possible. You can choose from LLC, corporation, nonprofit, sole proprietorship, or partnership.
This is a big decision because it affects your personal liabilities, expenses, taxes, setup costs, and funding. You need to decide which option is best for profitability, growth, and flexibility.
Your attorney can tell you if a simple LLC is acceptable or if an S-Corporation is more favorable, as there are many similarities between LLC and S-Corp. This is not a decision to take lightly. Talking to local business attorneys will help you make the best business choice, and this attorney can assist you with filing all the necessary paperwork.
2. Employee Issues
There are so many employee-related issues to think about as a business owner including deciding to hire contractors or employees. There are several laws you will need to adhere to when you make this decision. An attorney will help you structure employment properly and avoid issues with the IRS.
Independent contractors need an agreement that specifies your arrangement. You will need an attorney to help you draft this document, so it is appropriate for your business.
You can also discuss all the necessary actions if you need to fire or hire employees to avoid any discrimination lawsuits. There are some questions you can’t ask in an interview. Plus, you will have someone to assist you should an employee file a lawsuit.
3. Creating or Negotiating Contracts
You will most likely need to enter into a few contracts while you are in business. The last thing you want to do is sign a contract that is not good for your business.
Attorneys are specialists at finding problem clauses and finding additional language that needs to be included. For example, if you enter a contract that does not have a dispute clause, you could be in a lawsuit if mediation doesn’t resolve the issue.
On the flip side, if you are in a contract with another party that has breached the contract, your attorney can help you explore your choices and tell you what you can do legally. For instance, you can’t necessarily just withhold money if someone breaches a contract – there may be a clause that does not allow this or could cause additional issues.
4. Government Complaints
If you ever have a government entity investigating or suing your business, you will definitely need an expert attorney at your side. There are several reasons a government entity may investigate or sue your business.
For example, an employee may make a claim against you and the labor department investigates. Also, the IRS may have issues with your tax return. These are all issues that you need an expert for assistance.
5. Environmental Problems
Any environmental issues with your business is a big reason to discuss with a business attorney. These issues include manufacturing, emissions, waste disposal, and creation of raw materials.
You may not necessarily be directly part of the problem. For example, if you buy some land and discover hazardous materials under the surface, you should consult an attorney to file a claim against the seller for cleanup and removal costs.
6. Selling or Purchasing a Business
There are several complex parts to buying a business. You will need how to value the business, create a purchase agreement, transfer licenses and permits, and due diligence.
You will also need to determine how you will purchase the business with funding, including investments and loans. If you are buying a portion of a business, you will have to determine capital contribution. A law firm, like De Bruin Law Firm, can help this transaction move smoothly.
You will need to figure out the value of your business if you want to sell and that includes stock transfers and role negotiations. You worked hard for that business, so you want to make sure you get the most out of it.
7. Personal Liability
Do you have personal liability in your business? If you aren’t sure, you will need an attorney to help minimize your risk. If something happened, you and your family could lose everything if you are personally liable.
You may also want to get advice on what insurance you need for your business and your personal protection. You can decide if a personal or commercial umbrella policy is a good choice.
8. Business Lawyers Prevent Legal Issues
If you get sued, it’s already too late. The damage has been done. Even if you win the lawsuit, you still have to pay legal fees, lose personal time, and experience stress.
A business attorney will monitor your business to make sure you are not at risk. You could make an unintentional mistake that only an experienced attorney could find.
9. Real Estate
If you have commercial space, you will have a lease that is rather complex from the landlord. These documents appear to be non-negotiable but that’s not the case.
Your attorney can add a “tenant’s addendum” with the provisions you want. These provisions will benefit you and can be added right to the lease document to protect your business interests.
10. Help with Online Business
The Federal Trade Commission has several regulations for online businesses and transactions. Since e-commerce is so popular, you will need to have assistance to help you grow, especially after you’ve formed an entity (like an LLC) to operate under.
A business attorney can help you with your privacy policies and advise you on how to avoid lawsuits. You will also need to know all the federal and state laws.
Want to Read More Business Advice?
You now know that it’s important to hire a business lawyer to avoid certain mistakes. Be sure to explore our site for more business advice, from small business tax saving tips to tips for developing leadership.