Every month, an average of 543,000 small businesses are created in the United States. The most common reasons cited by people starting a new business? They love being their own boss, and they want to pursue their passion.
Small business owners face several key decisions from the outset. These early decisions could have a significant impact on the young company’s success. That’s why it makes sense to consider hiring an experienced business formation lawyer to ensure you start off on the right foot.
Here are six reasons why your business startup likely needs the help of an attorney:
- Business Formation. The decision about what kind of business to form (sole, proprietorship, partnership, limited liability company, S corporation or C Corporation) will determine the legal responsibilities and potential liability for the business owners and investors and dictate the way in which it must operate. Corporations are required to have bylaws and other documents in place before business can be conducted.
- Contracts. Many business relationships are defined through contracts. Every vaguely defined term, missing comma or ambiguous language in your contracts could result in litigation against your company and cost thousands of dollars. Most lawyers are experts in reviewing and, when needed, amending contracts for the benefit of the business. Entrepreneurs typically are not.
- Paperwork. Most companies, no matter how small, are required to register, obtain permits and/or purchase a business license from local and/or state officials. Some forms don’t require legal assistance at all. Others require careful scrutiny. You don’t want to unknowingly file inaccurate information simply because you didn’t understand the legal jargon on some of the forms.
- Doing Business Across State Lines. Do your products or services cross state lines? Does the state you’re doing business in have the same small business laws as your home state? Does your company need to register in states in which your customers reside?
- Taxes. What implications do your business formation decisions have on your individual and corporate taxes?
- Liability. Different business forms provide different protections and/or risks to small business owners. Is your business liable or are you personally liable for the errors of your employees or partners? You’ll want to carefully consider the impact of your decisions on your family’s economic well-being.
There are many legal decisions that a small business owner should make before forming a company, as an attorney, like a business formation lawyer in Sacramento, CA, from a firm such as The Yee Law Group, PC, can explain.