Entrepreneurs who are just starting out, or those who have already started running a small business, may question if they need different professionals such as a business lawyer, or a tax accountant, or if they can just handle things on their own. There are, in fact, many legal tasks business owners can take on themselves, such as choosing a name for the business, creating legal partnership agreements, applying for an employer identification number, licenses, and permits, and creating contracts.
As a small business, there may be little or no extra capital to pay lawyers, or it may seem like more of a hassle than a benefit. However, working with a lawyer or law firm can help protect you and your business from massive legal penalties, fines, or other problems that could be detrimental to your success.
What Does a Business Lawyer Do?
Business lawyers specialize in giving advice on starting and managing a business while protecting the business and its assets and ensuring compliance with laws and regulations. Their primary role as a general counsel is to help guide you through complex laws, draft and review agreements and contracts, protect your intellectual property, and other tasks to keep your business operating efficiently and effectively.
Reasons You May Need a Business Lawyer
Here are five signs you may need a business lawyer to help you protect yourself and your company.
Developing or Signing Contracts
If you’re developing or signing contracts, a business lawyer can be a beneficial asset. These could be employee, independent contractor, or partnership agreements, non-disclosure agreements, trade agreements, service agreements, employee contracts, and others that are important for doing business.
Working with legal counsel to clearly spell out terms such as deliverable descriptions, pricing, payments, penalties, limitations on liability, a force majeure clause, dispute resolution clause, and other terms that are tailored to your business can help prevent issues down the road.
And, having a lawyer review any contracts before you sign them can help you understand exactly what you’re signing, therefore protecting you and avoiding any legal ramifications for breach of contract.
Businesses can be liable for taxes, fines, and other penalties if they don’t properly prepare for tax considerations. Examples of steps business owners would need to take include:
- Obtaining a tax ID
- Choosing a legal entity
- Understanding and taking advantage of tax incentives
- Outlining stock options
- Paying sales taxes
- Paying payroll taxes
- Knowing the difference between employee vs. independent contractors
- Completing income and deductible expenses documentation
While some of this can be completed on your own, it can be beneficial to work with a business lawyer to ensure you’re following the right steps, getting and filing the right information, and all processes are completed appropriately.
Intellectual Property Protection
Intellectual property can be a product, technology, or service and includes things like website designs, content, logos, and other creative properties. Patents, copyrights, trademarks, service marks, and trade secrets can offer protection for those valuable business assets.
Having protection in the event someone tries to steal or take credit for this work can be beneficial for your business. You will also be protected in the event that you’re accused of stealing someone else’s work.
Major Business Transactions
Buying out another company, changing vendors or long-term product suppliers, switching distributors, or completing other major business transactions can go much smoother with the support of a business lawyer. Mergers and acquisitions can also go more smoothly when a business lawyer can help ensure the terms are fair for your business.
Corporate attorneys can look at both old and new contracts to ensure you won’t be entering any legal trouble or breach of contract.
Filing a Business License and Other Legal Documents
When starting a business, entrepreneurs have a number of legal actions to take, documents to file, and fees to handle depending on their state and type of business. This can include getting a business license, filing an LLC, partnership, C-corporation, or S-corporation, and filing documents such as articles or organizations, partnership agreements, corporate bylaws, operating agreements, and others.
There are many important reasons to work with a business lawyer. Your business is one of your most critical assets, and there are steps you need to take to protect it. Working with a business lawyer can help prevent errors that could affect or delay the business becoming established, as well as help you understand basic business legal processes and functions to protect yourself in the future.