Small Businesses: Should I Engage a Lawyer When Starting Up?
If you’re getting serious about a startup business and wondering where to begin from a legal perspective, then read on. Because based on our experience helping many new startups get up and running, consulting with an attorney very early on in the process is one of the most important things you can do. Why is this? Because having a solid foundation in the legal principles behind your business can avoid so many problems later on.
Put another way, consulting a lawyer before your get started will help you navigate many issues typically surrounding small businesses, including the following: First, you should know the difference between a sole proprietorship, a corporation, and a limited liability company, and understand how limited liability benefits you. And, if you’re going to have limited liability, you need to know how to manage your cash flow, assets, and compensation in a manner that preserves that limited liability rather than eroding it.
If you’re going to have a partner or an investor backing the business, you and the other owner(s) will need to know a plethora of rights that you’ll have in relation to one-another. This is one of the biggest reasons to hire a lawyer: So you can work up an operating or partnership agreement--that you all thoroughly understand--to govern the business. In fact, disputes among partners are one of the biggest reasons startups fail--and a governing contract goes a long way toward preventing such a failure.
Additionally, if you’re going to hire employees, it’s crucial that you understand such matters as how to keep track of their time records in accordance with wage and hour laws, whether to pay them using W-2s, and other laws that govern employment practices, including workers compensation.
In summary, there is a laundry list of legal issues that you are likely to face as a small business owner, and simply meeting with an attorney to get ahead of those issues can prevent all kinds of problems from arising in the future. By meeting with a lawyer, you will have an increased confidence in the soundness of your business decisions, and by acting in compliance with the law, your business will be better poised for growth and profitability into the future.
So, if you’re starting up a new business, don’t delay in meeting with counsel. Usually, as a preliminary step, a single consultation will put you on the right path forward. The small business attorneys here at Asheville Legal have the expertise and knowledge to guide you through the startup phase of your business. Give us a call today to find out how we can help you.