Preserving Your Money and Property Beyond the Third Generation
June 12, 2024
In recent years, more people than ever are starting their own business. A record number of new business applications were filed in 2023, marking the third consecutive year of historic small business growth. Consulting with a business lawyer can help set your business up for success if you are starting a new business.
Why an Attorney Should Be Involved with Your
Business from the Start
Trying to do everything yourself may be tempting, but this is not recommended for long-term success. You might be unaware of the pitfalls and how to avoid them, especially if you have never owned a business. What you do not know can hurt you in business. The best time to involve a business attorney is before making any commitments or decisions that could have significant legal implications. An attorney can also help a business get through early growing pains and deal with issues that emerge as the business matures. An experienced business attorney can help you protect your new business from a variety of risks.
Regulatory Risks
Regulatory compliance is a major cause of concern for small business owners, and new regulations are being added every year. Small businesses must comply with local, state, and federal laws and industry regulations. Failure to meet compliance obligations such as filing paperwork, paying taxes, holding annual meetings, maintaining licenses, permits, and certifications could result in serious consequences, including fines and penalties, loss of business name rights, tax liens, and even dissolution.
Litigation Risks
In addition to regulatory risks, businesses face the risk of litigation. Many lawsuits involve contractual or tax issues. Other common business legal issues involve employment, intellectual property, real estate, regulation, company structure, and finances or debt.
Entity Structure and Formation
Regulatory and litigation issues assume that a business is up correctly. However, problems could arise if you set up your business incorrectly with the wrong type of business entity or legal structure. The wrong type of business entity could have serious legal and tax consequences. It may be tempting to save costs by filing the business entity yourself, using a non-attorney, or an online business registration service provider, but it may actually be more expensive when problems arise by not setting up your business the right way with proper legal guidance.
A Checklist for Your First Meeting
You do not need to have every detail sorted out before your first meeting with an attorney, but to help the attorney do their job, make your best effort to have the following ready at your first meeting:
● A business plan that provides an overview of your company, including the products or services it will offer and the personnel, equipment, and facilities that you anticipate needing to provide them: the type of business you are starting affects many considerations, such as entity type, zoning, licenses, insurance, and taxation
● Documents related to your business, including any existing contracts, financial statements, or formation documents
● A list of other owners and investors, if any, who will be involved with the business: this information may impact the appropriate business structure and any agreements that might be needed to address buyouts, profit-sharing, decision-making authority, and other rights and obligations
● A plan for hiring workers and paying them; employees add a level of complexity that must be planned for: a lawyer will want to know if you intend to start off with employees or hire a team in the first year; if you prefer to have part-time, full-time, or contract workers; and if you intend to offer benefits to attract talent
The more information you can provide to an attorney, the better they will understand your business plans and be able to offer specific legal advice.
In short, treat your first meeting with a business attorney the same way you would a meeting with a potential business partner, because your attorney can be just as important to the success of your business.
We can help!
Our attorneys can help you with your business planning. For assistance with these and other business law, tax planning, or estate planning matters, contact our office today!
Legal Disclaimer – The information provided is designed for general information only and is not intended to be legal advice, nor does it create an attorney client relationship. Consult an attorney before making any legal decisions based on your individual circumstances.
