You have decided to start a new business. Congratulations! Where do you go from here? Do you hire a business lawyer or do you need an accountant? An accountant will certainly help you with your taxes when you are ready to do so. But how do you decide what kind of entity you should be? You’ve heard of limited liability companies, but you’re not sure this will work for your business. Everybody seems to have an S-corp. This is what you need? What you really need is to find a good business attorney. A good business attorney will help you understand the myriad decisions you will need to make for your business and help get you started on the right track.
Depending on the type of business you have and the number of investors in your business, you will need to talk to a business attorney about entity formation, copyrights or trademarks, insurance, and other ways to protect your personal assets. The money you invest in a good business attorney at the beginning of your business will save you a lot of money in the future. Here are some ways a business attorney can help you:
1. Entity Training. In California, we like to advise our new business owners to form an LLC, a limited liability company (unless it is not available for your type of business, such as a licensed contractor). The main reason is simple: experience shows that most small businesses will not hold annual meetings or keep minutes. Failure to comply with corporate formalities as a corporation can have devastating effects. A creditor can “pierce the corporate veil” and a court could find you personally liable for the corporation’s liabilities. With an LLC, failure to hold meetings and keep minutes is not considered a reason to pierce the corporate veil on an LLC. A good business attorney will talk with you about the type of entity that is right for your business and help you set up the business correctly.
two. Trademarks. If you work hard to find a name or design a logo, don’t you want to protect it? By applying for a trademark with the US Patent and Trademark Office, you can protect that name or logo. And a business lawyer will help you understand the importance of doing this first, rather than waiting until you’ve established your business. The worst thing you can do is spend a lot of money marketing your brand, only to find out that someone else has registered that name, or a similar name before you.
3. Contracts. Contracts for all small businesses are a must. Some people feel like they can download contracts from a website, but do you know who wrote the contract? Do you know who it was written for? What state law applies? It is not a good idea to start your business with an Internet contract. Let a good business attorney prepare the contract you need for your business. Intellectual property. Is your business a media, design, or other type of creative business? If so, you will have a much easier time dealing with trademark and copyright protection registrations if you have an attorney. Even if your attorney doesn’t normally handle IP, they will have referrals for you so you can find the right IP specialist for your business. Typically, these will be people the lawyer has worked with before and can recommend based on previous experience.
Four. Sure. Insurance is required for a business, but it is not enough. You must have a business entity to protect your home and personal property. Hiring an attorney for your small business may not seem like a requirement if you are not facing any legal battles. This is not true! You want an attorney who is familiar with you and your business, so that if you end up in a legal mess, they will be able to work it out. Hopefully, before it ends up in court.
5. DBA. Some people use a DBA for their business name. This is nice to have and a business lawyer can help you with the required filings.
It is crucial for new business owners to hire a good business attorney to help them set up their business. You want your business to succeed, so make sure you start with the advice of someone who understands what your business needs.
