Why You Need a Business Attorney
Why do you need an attorney in the early stages of starting a business?
A knowledgeable business attorney is critical in the early stages of your business. Your lawyer can provide advice in:
Your new business may be in a very competitive or heavily regulated industry. Therefore, knowing the landscape before you make the leap is an important first step.
A lawyer can help you get the legal documents you need, such as incorporation documents, trademark, copyright, and patent registrations, business licenses, and tax applications. In fact, there are many situations where you must have an attorney complete this paperwork, or else the registrations are void.
No one wants to break the law, especially ones you don't know apply to you. A lawyer can help advise you on the laws applicable to your industry and how to navigate the rules and regulations. You want to run your business in a way that doesn’t create a tax liability. Also, you need to pay your taxes on time. Your attorney is can help you with these tax matters.
You must take necessary steps to control risk in your interactions with your suppliers, users, customers, employees and the general public. Your attorney can help negotiate contracts with important vendors and customers, as well as draft standard contracts that can protect you on a daily basis.
When starting a business, you will learn quickly that there are negotiations with 3rd parties almost constantly. An attorney can help you negotiate license agreements, raise capital, and draft contracts with suppliers and customers.
When it’s time to seek advice of an attorney?
I recommend speaking to an attorney before you ever begin taking steps to open your business. The advice you receive on the front end could be invaluable. In fact, many attorneys will offer a free initial consultation to address some of your questions and to help you budget in the process. That said, there are certain legal issues that you can resolve on your own. However, you will need an attorney to resolve more complex issues such as:
Forming a legal entity with multiple shareholders
You will need an attorney to form a legal entity with multiple shareholders. While articles of incorporation can be filed without the help of an attorney, the management and the administration of the entity can be burdensome, and failure to abide by the formalities can void the protections the entity provides. Furthermore, understanding the tax implications can be very complex, and trying to figure it out on your own can result in thousands of dollars in penalties.
Filing a patent
Filing for patent rights can be a time-consuming and expensive affair. Patenting your product may take years and failure to claim the right aspects of your invention could make your patent unenforceable. It is absolutely essential that you consult a patent attorney to help you evaluate a product and understand its patentability.
Business owners are legally prevented from representing their own business in all but the smallest disputes. The attorney can deal with lawsuits such environmental lawsuits, harassment lawsuits, lawsuits filed by customers or employees, government investigations for legal violations, etc. However, it is important to have a relationship with a lawyer long before litigation arises, as it may be too little and too late to do anything about it.
Purchase or Sale of a Business
Purchasing or selling a business will require an attorney. Typically, either the buyer or seller will retain an attorney, and he or she will typically use a clause saying that you have waived your right to seek representation if you choose to proceed without an attorney. This will prevent you from later arguing fraud or other causes of action that could have been prevented if you had just retained an attorney.
If you wish to acquire new businesses or wish to sell your business at some point, your attorney can help you with the entire process including negotiating sales agreements, lease agreements, buy-out terms, payment schedules, etc. Again, it is important to establish a relationship with an attorney long before you think about selling or acquiring a business, as it can take years to finalize a sale.
Various local, state, and federal governments and agencies levy five basic types of business taxes – income tax, self-employment tax, taxes for employers, sales and use taxes, and excise taxes. These payments are all expected on different days, on different schedules, and in different amounts. Your business attorney can help you understand the tax procedure and ensure that the taxes are paid in-full and on-time.
In some states you register your business name with the Secretary of State or state agency, whereas in other states, you register your business name with the county. Each separate county has its own form and fees for registering your business name. Moreover, the requirements for permits, licenses and registration will depend on the type of business you plan to start. Your attorney can help you determine which registrations are necessary.
An attorney can help you in a variety of legal matters, including employment contracts, compliance, taxation, intellectual property protection, insurance needs, etc. You just need to find an attorney who is experienced and has expertise in commercial law.
How much will it cost to hire an attorney?
Be sure to budget for the expense of hiring an attorney before you begin. Hiring an attorney to fix something that could have been prevented can easily cost ten times the amount it would have cost on the front end. Depending on the size of your business, expect to spend anywhere between $2,000 for single-owner businesses to more than $50,000 for business that are seeking outside investment and/or intellectual property protection. Most traditional, brick and mortar-style businesses will spend between between $5,000-$7,500 on average on start-up legal expenses. However, depending on the type of business, that number could be more or less.
If you need an attorney, or if you want to learn more about the steps that you need to take to start your business, simply enter your contact information in the sidebar, and we will follow up with you within 24 hours.