Starting a new business can be an intense time: exciting and rewarding but also a bit intimidating. To help navigate what can look like a legal minefield, business owners should consult lawyers early in the process rather than after any damage is done.
Where Attorneys Help
Incorporation. In some areas of the country in particular, incorporation is a straightforward process. Nonetheless, incorporation requires important decision-making, namely what type of business one is registering. For instance, registering as an LLC rather than a sole proprietorship will change one’s status in terms of tax benefits, potential liability protection, and access to capital. Additionally, changing a business’s type later on can be tricky, and if a business happens to “outgrow” its original designation, consulting an attorney is often necessary.
Paperwork. Unsurprisingly, developing a new business may require significant and varied documentation. Documents required may range from a “Doing Business As” (DBA) document to detailed employment contracts. In addition, depending on the type of business, an owner may require permits and/or licenses to lawfully operate, such as permits for zoning, sales tax, and the fire and health department.
Intellectual property. An attorney can also help to ensure that business owners maintain a level of control over their own creations. Legally speaking, this means protecting one’s intellectual property. For instance, it may be necessary to trademark a business name or logo or to register a patent for a new product.
Business plan. While developing a business plan is not legally required, it can help a new business “stand out” and garner funding by presenting viewers with a solid introduction to the business. Plans often include an organizational structure, a market analysis (often requiring an exploration of relevant regulations), and a financial overview. Attorneys can assist in gathering the information necessary to outline these concepts. Additionally, while it’s often counterintuitive to consider the ends of things at their beginnings, attorneys can assist in developing exit strategies in case a partner bows out; this prevents confusion and dispute down the road.
Finances/Taxes. Obviously crucial to any business venture are finances. For individuals joining an existing business, an attorney may help to determine whether the business will be a good investment. For those starting fresh, some guidance in investments, loan processes, budgeting considerations, keeping the books, and various types of insurance is often incredibly helpful. For instance, many new business owners underestimate the importance of marketing and fail to properly budget for it. Others may not realize the multiple forms of insurance that are necessary (e.g. general liability, product or professional liability).
Renting and Leasing. Many businesses need a “home base” or other form of commercial property to successfully operate. An attorney can help ease the real estate process and navigate the relevant property law, i.e. by reviewing commercial leases (which tend to be landlord-skewed and can be intimidating to new entrepreneurs).
Analyzing Risks. Most business owners (and people in general) are understandably loss-averse. However, at the same time, many may don rose-colored glasses in the exciting atmosphere of forming their own new business. Attorneys can offer experience and a level head by anticipating problems or even “worst case scenarios” safely, before they happen, and advising potential solutions to them.
