Why Do I Need A Business Lawyer For My Business?
Do I need a business lawyer for my business? And if so, when and why do I need to hire a lawyer? These are common questions among many business owners, especially those who are starting new businesses. However, these questions don’t have a direct answer. Some business owners decide to continue operating their businesses without an attorney, and then get one when they land into legal issues.
As a business owner, it’s important to note that you might be involved in different legal situations, which will require the services of a business lawyer. In addition to this, you will also need a business lawyer to assist you in navigating through different situations, like acquiring a new property, getting legal advice, and many more. All in all, hiring a business attorney is essential for your business, and will help in keeping it functional and compliant.
So, what’s the first step towards hiring a business attorney?
First, you will need to examine the needs of your business. Whether you want a business lawyer when starting a business will largely depend on the type of business you want to operate. Some businesses will need you to hire an attorney immediately, while others will not.
If you want to start a sole proprietorship, for instance, you will not need to register the business with the state. Therefore, you won’t need to hire a business lawyer when starting such a business. Moreover, there’s no specific paperwork needed, apart from a local business license. This can also depend on the nature of the business, as well as other unique requirements.
For Limited Liability Companies (LLCs) and partnerships, you must register these businesses with the state. You will need to prepare documents, like a Limited Liability Company operating agreement or a partnership agreement. In some states, you can register such businesses online. However, it is advisable to hire a business attorney to help in registering your business if it’s complicated.
Business corporations or S-corporation should also be registered with the state. These types of businesses have an intricate ownership structure, meaning bylaws and other documents must be prepared. A business attorney is a must if you are starting any kind of corporation. For an S corporation, it first starts as a corporation, which then elects an S corporation position with the IRS. Yes, this sounds very complicated—which shows the importance of hiring a business attorney.
With that said, let’s look at the reasons when you need a business lawyer for your business. Note that these reasons apply to both startups and existing businesses.
Any business contract or legal agreement should be prepared in a good format, as well as following set legal guidelines. A professional business lawyer is in a better position to prepare these documents when you want to enter into an agreement with a third party or legalize your partnership.
Business lawyer, Michele Diglio-Benkiran, shares that the legal paperwork should protect your business interests, meaning you can sue anyone who goes against the terms set in the agreement. When you hire an experienced business attorney to prepare the paperwork, they will advise you to know whether or not you need to add extra documents for the paperwork to be complete.
As an employer, you will need an employment contract or agreement for your employees. A well-drafted agreement or contract will protect your business in case a dispute arises.
Acquiring a business license
When operating a business, you will realize that there are certain times when you will need a permit or a license from the government or administration. Hiring a business lawyer at such a time can save you unnecessary stress. At times, you might be required to register your business with an administrative body, which can be a challenge without the assistance of a business attorney.
Preparation of business forms
Corporations, sole proprietorships, or limited liability companies will need to be described professionally in terms of their operations. This will help the business to operate smoothly. Smooth operations are essential as they prevent employers, employees, as well as other partners from breaking the set rules. Any professional business lawyer can assist in preparing the business forms in case you want to define some roles in your business.
Reviewing financial records
A business has two roles—to make money and create revenue. This involved several financial transactions, like expenditures, income, distributions, as well as income tax. However, the most essential thing is to prepare income tax paperwork to avoid getting into legal problems in the future.
As a business, you will need to keep a good and updated record of all your income, expenses, as well as paid tax. Your income tax records assist in showing that your business has paid taxes to the government. At times, your business might be required by the court to present its financial and tax records for accountability. The non-availability or incomplete records can land your business into big trouble. However, with a business attorney at your service, you’ll always have these documents at hand.
In case of a lawsuit
Owning a business doesn’t mean that everything will always go on smoothly. There are times when you’ll be faced with a civil lawsuit. Navigating through a lawsuit without the assistance of a business attorney can be a great challenge.
However, having a business attorney during such a time can work to your advantage. If you have an attorney with whom you’ve been working with, it means that they know your business better, and they can immediately start dealing with your case. Moreover, any professional business lawyer will draft your agreements in a manner that you’ll always have the upper hand in case of a legal dispute.
Different types of businesses come with different risks as well as protection to the owner. In the event of personal liability, it means that any financial obligations for your business can be met with your assets. Hiring a business attorney can assist you to avoid such a situation or reduce the risks.
If you manage a business, personal liability risks destabilizing your financial wellbeing. This shows the importance of consulting a business lawyer in such a scenario.
Today, the state government will decide certain policies for your business—these policies in the form of Uniform Laws. Most states set these laws to fill in the gaps for business where their by-laws, charters, as well as other important documents, aren’t clear. That means, your business might be governed by a set of regulations that you are not aware of in the first place. However, a business attorney will ensure that your business has all the necessary policies in place, thus preventing you from being a subject of the laws set by the state government.
A lawyer will assist you to avoid making mistakes
Owning a business comes with a number of legal pitfalls. As a business owner, you are prone to making certain legal mistakes, regardless of the level of your experience. But, a professional business attorney is experienced in identifying any potential pitfall that may come your way. Thus, they will assist you in avoiding any serious issues, which you might not be aware of in the first place. Some legal issues, like employment lawsuits, can land your business in a big problem. Thus, having a business attorney can help you with such issues.
Yes, you might not need a business lawyer to assist you in navigating every other step of your business. However, a professional business lawyer will help you in avoiding future issues for your business—which is vital for its success. Also, you might be able to deal with certain business matters without any assistance. However, you will need professional assistance when dealing with legal matters. So, the best thing to do is to retain a business attorney who can assist you with a number of legal issues.