There is nothing more satisfying or more difficult than owning your own business. Starting and operating a small business is exciting, interesting and, arguably, a complete gamble. To increase your chances of success, be brave, work hard, and develop a relationship with a good lawyer. A good lawyer will take the time to get to know you and your business and be able to help you foresee potential issues specific to your situation and stop them from wreaking havoc down the road. On top of that, a good lawyer will be capable of helping you navigate through issues when they occasionally (and, inevitably) occur.
All businesses are different, but it is possible to generalize when it comes to the typical legal needs of small businesses. The truth is that the legal needs of a small business have a lot in common with the legal needs of a larger company, just on a smaller scale.
First up, entity type: Businesses of all sizes must grapple with the laws for forming and operating a business. Selecting an entity type is one facet; will you structure your business as an LLC, an S corporation or a C corporation? A good lawyer can give you guidance here and I’ve addressed entity type in detail here: https://mwicklaw.com/business/startup/6-things-to-consider-when-forming-your-startup/
Next up, corporate governance: All businesses need governing documents and with a good lawyer, this is a chance to educate yourself as you walk through best practices, risks like piercing the corporate veil, common ownership disputes, and guidance in avoiding litigation. Once crucial piece to corporate governance is forming the document that will govern your business. In an LLC, this document is called an operating agreement and covers a wide variety of scenarios, such as contributions to the company, how decisions are made by the members of the business, if, when and how membership interests in a business can be transferred and more. These topics are particularly important, and your lawyer should take all the time necessary to fully discuss the provisions contained in the operating agreement and their implications.
Focus on contracts: Contracts range from basic sales contracts to highly complex contracts that require language adhering to certain applicable laws. You should have a lawyer help you build your contracts and make sure you understand how to use them. We addressed key items a services contract, one key contract all businesses will need, must contain: https://mwicklaw.com/uncategorized/10-items-your-service-agreement-must-address/
Don’t forget employment concerns: It’s important to have an attorney draft an offer letter template and standard employment agreement for your future hires, or, if you do not have employees, you should have an attorney draft an independent contractor agreement for contractors who perform work for your business.
Other needs: There are times when an owner may want to sell the business; a seasoned lawyer can help you draft a comprehensive and fair buy/sell agreement. As time goes on, the business will go through changes and generally those changes need to be documented and formalized.
