Many Americans dream of leaving their nine-to-five job to start their own business—and in recent years, more people than ever have been doing it. A record number of new business applications were filed in 2023, marking the third consecutive year of historic small business growth and adding to the economic engine that drives the US economy. Starting a business provides a world full of fresh possibilities, both exciting and daunting. Consulting with a business lawyer can help set your business up for success if you are starting a new business.
Why a Lawyer Should Be Involved with Your Business from the Start
Trying to do everything yourself may be tempting, but this is not useful or sustainable for long-term success. You might not know where the pitfalls lie 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 lawyer is before making any commitments or decisions that could have significant legal implications. A lawyer 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 state and federal laws and industry regulations. Failure to meet compliance obligations such as filing paperwork, paying taxes, holding annual meetings, and 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, small businesses face the risk of litigation. Many lawsuits involve contractual or tax issues. Other common small 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 and running. However, problems could arise before the ink dries on formation documents or a first contract. Right out of the gate, a business owner must make crucial choices about setting up and structuring their business.
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:
- Completed intake forms or questionnaires the attorney gave you before the meeting.
- A business plan that provides an overview of your company, including the product(s) or service(s) 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 description of your previous business experience and the experience of your co-owners and investors: first-time entrepreneurs may face a different set of risks and challenges and require different legal strategies than veteran business owners.
- 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.
- A list of vendors you plan to work with: vendor relationships, like employee relationships, need to be carefully managed with contracts, but the details of a vendor contract depend on the role they will play.
The more information you can provide to an attorney, the better they will understand your business plans and be able to offer concrete, tailored advice.
Feel free to ask questions about a lawyer’s experience and knowledge. Identify specific legal concerns and determine if the lawyer has assisted other clients with similar problems.
In short, treat your first meeting with a lawyer 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.
Call Us Today for an Appointment
Once you are prepared, please schedule an appointment with our business attorneys. We look forward to meeting you and beginning what has the potential to be a long and prosperous relationship.
