Do You Need a Business Law Attorney?

Attorneys are not the first thing most small business owners have on their mind when building their company. Usually, they view attorneys as unnecessary and an unaffordable expense. However, an experienced business attorney or corporate lawyer is a money saving resource!

Understanding Business Law and Its Importance

Business law, also known as commercial law, is the backbone of any successful enterprise. It governs the formation, operation, and management of businesses and other commercial entities. This comprehensive body of law covers various aspects, including contracts, taxation, intellectual property, and employment law. For businesses to operate efficiently and effectively, understanding business law is crucial. It provides a framework for resolving disputes, protecting rights, and promoting fair competition.

Business law is essential for several reasons:

1. Protection of Rights: Business law safeguards the rights of businesses, including their intellectual property, contracts, and employment agreements. This protection is vital for maintaining the integrity and value of your business.
2. Promoting Fair Competition: By regulating anti-competitive practices, business law ensures that businesses operate in a fair and transparent manner. This promotes a healthy market environment where all players have an equal opportunity to succeed.
3. Resolving Disputes: Business law provides a structured approach to resolving disputes, whether they involve contracts, employment issues, or intellectual property. This helps businesses avoid costly and time-consuming litigation.
4. Regulating Business Operations: From taxation to employment law and environmental regulations, business law covers various aspects of business operations. Compliance with these laws is essential for avoiding legal issues and ensuring smooth business operations.

How Can a Business Lawyer Help

Partnering with business lawyers early on will be inexpensive compared to the issues and costs that often arise as a result of not establishing a firm legal foundation.

In addition to partnering with counsel on the ground floor, it is prudent to have a board of professional advisors and mentors. Our team here at the Law Offices of Shannon C. Smith partners with accountants, financial advisors, and serial entrepreneurs to create a board for those we serve. From start up to winding down, we are here for you every step of the way.

Corporate lawyers, with their specialized expertise in corporate law, including corporate finance, mergers and acquisitions, and regulatory compliance, are also essential for ensuring that businesses operate efficiently and within legal guidelines.

For those of you starting a business, one of the first services a business attorney can assist with is confirmation your business name is available and assist with the selection of your business structure. A business attorney can also help navigate the necessary licensure from local to federal and obtain all applicable tax numbers, e.g., withholding, sales, FEIN, etc.

Next, owners will need assistance in assessing needed contracts. Once you and your legal professionals have confirmed the relevant contracts, counsel can negotiate and draft any partnership agreements or corporate documents.

Intellectual property law is crucial in protecting creations such as products, brands, and inventions, ensuring that your business’s unique assets are safeguarded.

Throughout the business life, there may arise a need for employment agreements, independent contractor agreements, and employee handbooks – all proactive measures a business lawyer can take to set expectations and avoid potential lawsuits!

The longer the business “life”, the greater the need for business lawyer and an experienced board.

A business is like a car, it requires ongoing maintenance and periodic check ins. That is why we suggest hiring a business lawyer that provides ongoing General Counsel Services to be the ‘mechanics’ for your business.

This enables your business lawyer to anticipate needs, mitigate potential risk, and suggest certain ‘tune ups’. Tune Ups such as revisiting employment agreements, corporate documents, amending existing operating or shareholder agreements.

This preventative maintenance helps keep your business from “blowing a gasket.” But in the event it does, (or an employee does) having an attorney familiar with your business is crucial! Your general counsel lawyer can quickly navigate threatened lawsuits and provide advice.

Finally, should the time come to sell or acquire a business, a business attorney can negotiate the transaction on your behalf, draft the purchase agreement, perform due diligence on assets to be purchased, and take other needed steps.

A business lawyer can also walk business owners through the “winding down” process. An added bonus is finding counsel with experience running an actual business. Law school doesn’t teach you how to run a business and this unique understanding enables our attorneys to anticipate and understand pain points as well as ongoing knowledge of the need for urgency.

Benefits of Hiring a Business Attorney

Hiring a business attorney can be a game-changer for your business. Here are some of the key benefits:

1. Expertise: Business attorneys possess specialized knowledge in business law and can provide invaluable guidance on various aspects of business operations. Their expertise can help you navigate complex legal landscapes with confidence.
2. Risk Management: A business attorney can identify potential legal issues before they become significant problems. By developing strategies to mitigate these risks, they help protect your business from unforeseen legal challenges.
3. Contract Review: Business attorneys can meticulously review contracts and agreements to ensure they are fair and protect your interests. This includes everything from partnership agreements to employment contracts and independent contractor agreements.
4. Dispute Resolution: When disputes arise, a business attorney can help resolve them efficiently. Whether it’s a contract dispute, an employment issue, or an intellectual property conflict, having a legal professional on your side can make all the difference.
5. Compliance: Ensuring compliance with relevant laws and regulations is crucial for any business. Business attorneys can help you stay on the right side of employment law, taxation law, and environmental regulations, thereby avoiding legal issues and penalties.

Choosing the Right Business Entity

Choosing the right business entity is a critical decision that can impact your business’s liability, taxation, and ability to raise capital. Here are the most common business entities:

1. Sole Proprietorship: This is a business owned and operated by one individual. It’s the simplest form of business entity but offers no liability protection.
2. Partnership: A partnership involves two or more individuals who share ownership and operation of the business. While it allows for shared responsibility, it also means shared liability.
3. Limited Liability Company (LLC): An LLC provides limited liability protection for its owners, making it a popular choice for many small businesses. It combines the benefits of a corporation with the flexibility of a partnership.
4. Corporation: A corporation offers limited liability protection for its shareholders and can raise capital more easily through the sale of stock. However, it is subject to more regulations and higher administrative costs.

When choosing a business entity, consider the following factors:

1. Liability: Assess the level of liability protection each business entity offers.
2. Taxation: Understand the tax implications associated with each type of business entity.
3. Capital Raising: Consider the entity’s ability to raise capital, which is crucial for growth and expansion.
4. Management Structure: Evaluate the management structure that best suits your business needs and goals.

Drafting Contracts and Agreements

Drafting contracts and agreements is a cornerstone of business law. These documents establish clear expectations, protect your rights, and help prevent disputes. When drafting contracts and agreements, consider the following:

1. Clear Language: Ensure that the contract or agreement is written in clear and concise language. Ambiguities can lead to misunderstandings and disputes.
2. Specific Terms: Include specific terms such as the scope of work, payment terms, and termination clauses. This clarity helps all parties understand their obligations and rights.
3. Dispute Resolution: Incorporate a dispute resolution clause, such as arbitration or mediation, to handle conflicts efficiently and avoid lengthy litigation.
4. Intellectual Property: Include provisions for protecting intellectual property. This is crucial for safeguarding your business’s unique assets and innovations.

Protecting Your Business and Personal Assets

Protecting your business and personal assets is essential to prevent financial loss and reputational damage. Here are some strategies to consider:

1. Incorporating: Incorporating your business can provide limited liability protection for its owners, shielding personal assets from business liabilities.
2. Insurance: Purchase insurance to protect against various risks, including liability, property damage, and business interruption. This can provide a safety net in case of unforeseen events.
3. Contracts: Use well-drafted contracts to establish clear expectations and protect your rights. This includes employment agreements, independent contractor agreements, and other essential documents.
4. Intellectual Property Protection: Protect your intellectual property by registering trademarks, copyrights, and patents. This ensures that your unique assets are legally safeguarded.

By understanding business law and its importance, hiring a business attorney, choosing the right business entity, drafting contracts and agreements, and protecting your business and personal assets, you can operate efficiently and effectively, achieving your business goals with confidence.

Hiring a small business attorney from the onset will help save and make your business money. While you certainly do not need an attorney for every faucet of running a business “an ounce of prevention is worth a pound of the cure”.

Smith Law’s team of business attorneys provide ongoing general counsel services and have the applicable experience and understanding of being business owners. We know the value of having experienced legal counsel from the beginning. Owners should view business attorneys as a teammate and an asset.