Whether you are preparing to launch your business, or you have been in business for a while, having a lawyer to advise you can be a smart investment of your time and money. As a small business owner, you should budget for legal services the same way that you budget for other business costs.
Here are five ways a lawyer can help your small business.
Start up: You’ve always wanted to be an entrepreneur and you’ve got a great concept. But have you taken all of the necessary steps to go from the drawing board to Main Street?
A lawyer can help you with a litany of items. Drafting a business plan, helping to obtain funding and determining how your company should be legally structured for tax purposes (i.e., an LLC, a partnership, sole proprietor, etc.), can mean the difference between success and failure.
“Selecting the proper entity structure ensures that the business starts with a solid foundation and is positioned for growth,” says Anitria Stevenson, a small business lawyer in Houston, Texas. “Selecting the wrong entity type can lead to unwanted tax liabilities, less flexibility in operations and even failure.”
A lawyer also can help you apply for the necessary licenses and permits, draft employee contracts and handbooks and assist you with matters relating to labor law. This has become even more important during the pandemic as regulations that once were the norm are being challenged.
Contracts: Contracts are the backbone of every business. Small business owners should always have a lawyer draft, review or negotiate a contract. While you may be tempted to copy-and-paste, the wording should be specific to your business.
A lawyer can assist with employment contracts, vendor contracts, partnership agreements, confidentiality agreements, stock purchase agreements, leases and letters of intent. The list goes on and on depending on the type of business.
All contracts are legally binding, and any small cost upfront can save you a great deal of time and money in the future should disputes arise.
Real Estate: While many businesses today are operating online, many others still operate as brick-and-mortar venues. A Realtor can help you find a space, but the contracts you will be asked to sign often are complex and may benefit the landlord or seller more than you.
A lawyer can review your agreement and help you to understand what you are signing.
“Many small businesses sign onto long-term agreements such as leases without a clear understanding of everything that is included in them,” says Marc Snyderman, a New Jersey lawyer who assists small to mid-size businesses. “A good business attorney will not only review these agreements and make suggestions on the legal issues, but also help you understand all of the business issues that could arise from them and negotiate new provisions.”
A lawyer also can assist with zoning issues or represent you in the event you find hidden defects with the space you are purchasing or renting after the contract is signed. If you are purchasing or selling property, they can advise you on how that might impact your tax situation.
Taxes: A good accountant is one thing, but having someone who can help you with the ever-changing tax laws is quite another. With tax season in full swing, having a qualified lawyer not only can save you money, but also may save you headaches with the IRS.
If you are an existing business that received a PPP loan from the government, a lawyer can make sure you followed all of the Small Business Administration’s guidelines (not an easy feat as they are in constant flux).
A lawyer also can assist you with tax credits and deductions. If you become the target of an audit, he or she can represent you. And, if you face financial challenges, he or she can help you to determine not only whether to file for bankruptcy but also if it’s best to file Chapter 7 (liquidation) or Chapter 11 (reorganization).
Intellectual Property: A lawyer can assist you by acquiring trademark protection for logos, business, service and product names. It’s important to secure a company’s intellectual property early on. Your company wasn’t started overnight. It may have taken years of work. A lawyer can help you to prepare the paperwork needed to protect that idea and represent you should someone try to steal your idea.
Regardless of what stage of business you are in, having the wisdom and guidance of a qualified lawyer is one of the best investments you can make as a small business owner.
This article is intended to convey generally useful information only and does not constitute legal advice. Any opinions expressed are solely those of the author, not Law Champs.
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