When to hire a small business lawyer
Whether you are just starting out in business or you have an established company, a small business lawyer will help you navigate the legal hurdles that come with owning and legally protecting your own business. [Not sure what a business attorney does? See: What Does a Business Lawyer Do?]
While it may feel daunting at first, hiring a lawyer for your small business will provide a sense of relief knowing your personal assets and your business are legally protected. A small business attorney will also provide the legal support and expertise to ensure that your business is in compliance with applicable laws and regulations.
If you’re unsure about your business formation
The first question a small business lawyer may ask is: did you form the right business entity and do you have your formation documents drafted? They will determine if you have the proper entity set up for your business and work with your accountant to advise you on tax considerations.
New business owners often use an expensive third-party service, such as a registered agent, to form the business. These companies almost always provide their customers with template formation documents, which need to be customized to each business.
A small business lawyer will tailor these very important formation documents to your specific business, and ensure they provide the legal protections you are missing (but may think you have).
It is important to remember that your formation documents should accurately reflect how your business operates.
Formation documents must include provisions that:
Outline the management of the business,
Determine your record keeping,
Determine financial distributions and allocations,
Outline the meeting requirements,
Include indemnification clauses,
Determine whether members or stockholders may transfer their membership interests or stock, including any restrictions on those transfers,
What happens in the case of your death or incapacity, and
How your business will be dissolved and liquidated.
Considering unforeseen circumstances in your business
It is not unusual for entrepreneurs to start a business and have these issues be furthest from their mind. However, these are very important circumstances and provisions to consider. You do not want to leave your loved ones with the burden of trying to figure out what to do with your business in the case of your death or if you become incapacitated.
Working with a business partner
These provisions are even more important if you are in business with partners. Even beyond these standard provisions, if you want to remain friends with your partners in the long run, do yourselves the favor of hiring a small business lawyer to help spell out, in writing, the specifics of any negotiations and agreements you have reached and the expectations of your roles in the business.
For expert legal review of business contracts
Did you pull your business contracts off the internet? Agreements found online are problematic for various reasons. Almost always, they are not specific to the state where the business is operating, and they leave out important provisions that are specific to the business and the goods or services provided, or they omit necessary legal protections to the business.
A small business lawyer will review your contracts and identify any legal agreements you’re missing. will be? They will work to understand your business, then draft tailored agreements that you can feel confident actually protect your interests.
Contracts drafted by your small business lawyer may include:
Service Agreements,
Employee offer letters or agreements,
Leases,
Shared Employee Housing Agreements,
Vendor agreements, and
Liability waivers.
When you’re planning your business’ future
Where are you hoping to go with your business? Do you want to hire more employees, sell your business, or purchase another business? Are you looking to buy or lease commercial space?
A small business attorney will set you up for success by working with you to achieve your business goals. They will advise you on the legal implications, potential risks, and the best plan to move forward with your business.
For instance, if you want to offer equity to your employees, a small business lawyer will explain how that can be done, depending significantly on the structure of your business, and will find a solution to achieve your goal while being in compliance with the law.
Hire a small business lawyer to remove legal guesswork
While you will have to spend some money upfront to hire a small business lawyer, you will save money and peace of mind in the end. The sooner you involve a small business lawyer with expertise in business law, the less the lawyer will need to fix, the better your business will be protected, and the more likely you are to save on future legal bills.
KLH Advisors will help evaluate your business structure, review your existing contracts, and work to understand your business and provide actionable legal advice as you grow.
