A business startup attorney serves many important functions when a business is newly forming and can guide the business owner in legal matters throughout the lifetime of the business. If you want to learn more or are ready to get your business started on a firm foundation, consider contacting Goings Legal by scheduling a Discovery Call to discuss your new business.
Signs You Need a Business Startup Attorney
Some indications that a business owner might need to consult a business startup attorney include when the new business owner:
- Does not know how to structure the business
- Is considering hiring employees
- Needs to raise venture capital or obtain seed funding
- Has been asked by another person to join a business
- Has intellectual property to protect
- Is interested in leasing or buying commercial space
- Needs legal advice or guidance
Tasks a Business Startup Attorney Can Help With
A business startup attorney can assist with any or all of the following legal tasks for a new business.
Setting Up a Legal Entity
There are several types of legal entities that business owners can choose from when structuring their business. The type of entity affects how protected owners are from personal liability and dictates the business’s tax structure. The options include:
- Sole proprietorship: A sole proprietor is the default form of business ownership if an owner does not take steps to create a different structure. There is no legal distinction between an individual owner and a sole proprietor. Therefore, the owner is personally liable for all business debts and liabilities. The owner is taxed individually.
- Partnership: Partnerships are formed when 2 or more people run a business together as owners. Similar to sole proprietorships, partnerships do not require any filings to form and have no legal distinction from the owners. There are also different types of partnerships that can limit each partner’s liability. Partners often enter into a partnership agreement.
- Corporation: A corporation is most likely what you think of when you think of companies. Corporations are legally distinct from the owners and require registration with the Secretary of State. Bylaws lay out the rules and procedures for the company, such as when shareholder meetings will occur, how to take certain actions, and how the business could be dissolved. Corporations are taxed on their profits, and shareholders are also taxed on their profits. This is commonly referred to as “double taxation.”
- Limited liability company: A limited liability company creates a separate legal entity for the business but doesn’t have as many administrative requirements. LLCs pass through taxes to the Members individually, but the LLC can choose to be taxed as a corporation. The owners will need to file organizational documents with the state and pay a filing fee. An Operating Agreement is an internal document that sets the rules for the business.
Naming the Business
As part of the business formation process, new business owners will need to select a legal name for their business. They must select a name that is available in the state where they plan to operate their business. They can usually search the Secretary of State’s website for names that have already been registered in their state. The new business owners may then wish to check that the business is not a registered trademark. A business startup attorney can help with this process by checking with the United States Patent and Trademark Office.
Drafting Ownership Agreements
A business startup attorney can draft partnership, shareholder, or operating agreements that set out the legal requirements, expectations, and responsibilities of the owners and management. Such agreements may need to be filed with the state, depending on the type of business entity that the owners are establishing.
Advising Owners on Employment Matters
If the business will be hiring employees, the new business owners may need additional guidance from a business startup attorney regarding employment matters. An attorney can help the new business obtain an employer identification number from the Internal Revenue Service and explain how to pay payroll taxes.
Additionally, a lawyer can explain the various rules and regulations that apply to the business. A lawyer can even help with establishing policies and hiring practices that protect the business and assist with creating employee handbooks.
Protecting Intellectual Property
A business startup attorney can help a new business owner protect any intellectual property (IP) that belongs to the company. A lawyer can evaluate the business’s unique needs and assist with the application and registration process to help keep the intellectual property safe. A company’s IP might consist of:
- Trade secrets
Preparing, Negotiating, and Reviewing Contracts
A business may enter into various types of contracts when getting started, including:
- Supply agreements
- Agreements with vendors
- Employment, non-compete, and non-disclosure agreements
- Purchase agreements
- Customer agreements
- Terms of service for websites
- License agreements
- Commercial leases
- Buy-sell agreements
A lawyer can prepare contracts for the business and review any contracts that are offered to the business. One of the most important ways a business lawyer can help is by advising the owner of his or her rights and ensuring that the owner understands all the terms proposed in a contract. The attorney can also negotiate terms so that the agreement better meets the needs of the business.
Providing Legal Advice
A business lawyer can provide legal advice as legal issues arise. For example, a business lawyer may be able to:
- Explain zoning laws so the business stays compliant
- Review privacy policies and offer suggestions for improvement
- Advise business owners of the tax consequences of business transactions
- Create joint ventures with other businesses
- Respond to government data requests
Litigation is often expensive and can jeopardize the business’s finances and reputation. A business startup attorney can help his or her clients minimize the chances of facing litigation. The attorney can provide legal advice and guidance, create clear agreements with others, and ensure that the business is aware of any legal obligations.
What To Look for in a Business Startup Attorney
If you are searching for a business startup attorney, some characteristics to look for include:
- Experience with your particular legal matter
- Knowledge about legal issues that you may confront in your line of business
- Positive reviews from satisfied clients
- A good fit
Contact a Business Startup Attorney
An attorney can help with all the legal matters that a new business can face. The right business attorney will help start your business by guiding you through what is often a legally complex process. Goings Legal provides efficient and cost-effective legal solutions for startup companies. If you would like help for your new business from a business startup attorney, schedule a Discovery Call to speak with an experienced startup attorney.