Business owners need to wear many hats to handle what it takes to successfully handle day-to-day operations. Smart and successful owners learn early on to seek professional help with the legal issues that arise in all types of business ventures.
The mistake many business owners make is to wait until a legal problem arises before consulting with an attorney. Smart business owners understand that an experienced business attorney can anticipate potential issues and suggest ways to handle them before they become costly, time-consuming problems.
If you own a business, here are five reasons why your business will benefit from the services of a lawyer.
Choosing and creating a new business structure
When forming a new business entity its legal structure determines how it is managed, the taxes it pays, and the personal risk its owners have for debt and financial obligations of the enterprise. Business structures are a function of state law, so a business lawyer helps you to choose and form the best structure for your type of business from the ones available under the laws of your state.
The following are the most commonly available business structures:
- Sole proprietorship
- Limited liability company
Each business structure has advantages and disadvantages that a business attorney can review with you to determine the one that provides the flexibility and protection from risk that your business needs both now and in the future.
For example, a sole proprietorship is by far the most simple of all business structures with the business being nothing more than an extension of its sole owner. Profits and losses of the business are reported on the personal income tax return of the owner who pays any income taxes that are owed. It offers no protection to its owner against personal liability for debts and other obligations of the business because its owner is the business.
Partnerships are similar to sole proprietorship in being extensions of their owners. The primary difference is in the greater number of owners permitted for a partnership. Income and profits pass through to the partners who pay the taxes on their personal income tax returns. Partners can be held personally liable for business debts and legal obligations.
On the other hand, corporations and limited liability companies are legal entities existing separate and apart from their owners. Corporations and LLCs can sue or be sued in their own names, so the personal assets of their owners can be shielded from creditors of the business. Corporations and LLCs also offer flexibility that partnerships and sole proprietorships do not not offer as far as tax advantages because they are legal entities.
A business lawyer handles the legal requirements under state law for formation of the type of business entity that you choose. The lawyer will also see to it that the business secures all permits and licenses needed to lawfully operate.
Review and prepare contracts used in your business
Whether ordering supplies for your business or hiring a new employee, putting things in writing helps to avoid disagreements and conflicts that can lead to costly lawsuits. Lawyers prepare contracts and review contracts sent to you to ensure they contain the terms and conditions that you verbally agreed upon with the other party.
It is much easier to resolve potential disputes when the parties can easily reference the terms and conditions in a written agreement that each of them signed. If the parties still cannot agree, a written agreement that is signed by both parties is powerful and persuasive evidence if the matter winds up in court.
Keep your business in compliance with labor laws
If your business fails to comply with state and federal labor laws, it could be subjected to fines and other penalties. A business lawyer ensures that hiring practices, employee compensation, working conditions, and payment of payroll taxes comply with state and federal laws and regulations.
Because laws and regulations constantly change, a lawyer ensures that you are kept updated about changes that affect your business. When there is a regulatory change, a lawyer provides advice and representation to put your business in compliance with the new law or regulation.
Representing the interests of your business in lawsuits
Regardless of how much you try to avoid them, your business may need to file a lawsuit against a person or another business or may be sued by another party. A lawyer has the training, skills and knowledge to pursue claims on behalf of your business or defend it against claims that result in lawsuits.
Their knowledge of the law and experience in anticipating and resolving legal issues that can destroy business make business lawyers indispensable. All it takes is a consultation with one to learn what a lawyer can do to help you with your business