5 Occasions when Business Owners need a Business law attorney
Among the numerous concerns for entrepreneurs and business owners who are starting or already running a business is the question of whether or not they need a business law attorney. For many small businesses, starting a business is already a costly endeavor, so they may opt to stay away from professional legal counsel until a complex problem arises. Consequently, most small and medium business owners only hire a lawyer when faced with a serious legal problem.
Just like you need to talk to a professional accountant before the IRS audits your business, you should talk to a business law attorney to protect yourself from potential problems in the future. Unless things go smoothly, you will probably need to seek help from a lawyer at some point. As such, it is best that you confer to one from the very beginning.
While business lawyers are knowledgeable in numerous issues involving starting and running a business, there are certain instances when you should definitely seek legal counsel:
1. Setting up the business
There are many business entities out there, so the first and most important decision you need to make when starting your business is choosing whether you should start a partnership, company, corporation, or sole proprietorship. Each entity has its pros and cons, and while you can conduct your own research, determining the most appropriate one for your specific business can be a more pleasant and rewarding experience if you consult a business lawyer.
2. Drafting contracts
Starting a business usually involves a lot of legalities that require you to create contracts outlining the ownership percentages for all business owners, how profits and losses will be shared, and the duties/roles of each owner. Working with a business lawyer when drafting business contracts can prove to be beneficial for several reasons:
- First, your attorney can help you change the wording so it better suited for your line of business
- Second, your attorney can include certain clauses in the business contract that help you avoid costly lawsuits down the line
- Third, you attorney can make you aware of likely problems in future and help you take the necessary measures at the start.
3. Hiring employees and writing your company policy, terms, and conditions
There are many legal matters of running a business, so it is important that you establish certain rules and designations to avoid the possibility of lawsuits by your employees or customers. A business lawyer can help set up your new venture and ensure that all regulatory requirements and designations are met.
For instance, your business law attorney can help you draft employment policies in accordance with Title VII in regards to hiring, job assignments, pay, and firing. As far as customer lawsuits are concerned, they can be easily avoided by clearly stating and defining terms used in business contracts and agreements to avoid any misinterpretation of goods or services rendered and personal liability.
4. Protecting your intellectual property
When starting your business, you have to come up with a name, logo, tagline, and other elements that are unique to your brand. Some businesses are based on inventions or innovative designs that may need protection or patenting. All these types of intellectual property can be properly registered and protected with the IPO – intellectual Property Office by engaging the services of a business lawyer.
If the nature of your business is such that you share sensitive information with your employees, you may need them to sign a non-compete agreement to ensure that intellectual property like client lists, trade secrets, and insider knowledge does not leave the company. You may need a lawyer to help you draft a non-compete agreement.
This is one of those obvious instances when you need an attorney to help you settle disputes. Litigation can include your business being sued by an employee or customer for breach of a vendor or supplier contract, or government investigations for some violation. Whatever the situation, once you become aware of the possibility of litigation, you should hire legal counsel immediately.
Your business law attorney can also help you draft a buy-sell agreement to manage the business exit process, or how a co-owner can sell their interest in the business, who can buy it, and how the purchase price of the interest will be determined. Such an agreement can be necessary in the event of bankruptcy, divorce, retirement of a co-owner, or when a co-owner wants to sell their shares.