The early days of a new commercial venture are exciting for any entrepreneur, but mistakes made during this time can cast long shadows. This is why you should consult with an attorney if you are planning to start a business. An attorney with experience in this area could help you to avoid common mistakes, and you will be able to rely on their advice because they have an ethical obligation to act in your best interests at all times. Here are four reasons why business startups should consult with a lawyer.
1- Choosing the Appropriate Business Structure
Sole proprietors do not have to complete much paperwork before they open their doors, but they can lose their homes and other personal assets if a customer or employee sues them and wins. Forming a C corporation would protect personal assets, but the profits of this kind of business are taxed twice. Setting up a subchapter S corporation would prevent this double taxation, but doing this is complex and involves completing a lot of forms. An attorney could explain the pros and cons of the various types of business structures, and they may recommend establishing an LLC. Forming an LLC is fairly straightforward, and you will only have to pay tax on your profits once if you choose this business structure.
2- Obtaining Business Permits and Licenses
Once you have decided how your startup venture will be structured, you will probably have to obtain permits or licenses in order to conduct business legally. You will also have to comply with your local zoning laws. This is important because the consequences of failing to meet state or city regulations can be severe. An experienced business law attorney could find out what permits and licenses you will need and help you to obtain them.
3- Protecting Your Intellectual Property
4- Dealing With Liability Issues
We live in a litigious society, which means your business will probably be sued sooner or later. An attorney could suggest steps that you could take to avoid lawsuits or limit your liability if you are sued. A lawyer could explain the importance of complying with wage and hour laws and making sure your hiring practices are nondiscriminatory. An attorney may also suggest that you keep your business well-lit and free of obvious hazards to prevent injuries and premises liability lawsuits.
If you are planning to open a new business, you are probably eager to get started as soon as possible. This is understandable, but you should not overlook important legal matters that could shield your personal assets, reduce your tax bills, and protect your intellectual property.
