Before you meet with a marketing consultant or landlord, many small business owners need to consult with an attorney. Here are five reasons you should consult a lawyer before you start a business.
Your Incorporation Matters More Than You Realize
The type of business that you set up affects your business’s future in many ways. Different types of corporations have different advantages. For example, a limited liability corporation limits your personal liability if your business is sued, but requires strict segregation of business from personal finances. Depending on the type of business you incorporate, your business may be taxed as a corporation or its income may be counted on your personal taxes – and the losses count against you when you try to apply for a home mortgage. Consult with an attorney before you start your business so that the incorporated business provides the legal protection you want, you are charged a tax rate you can afford, and the business is structured properly to avoid legal problems.
Intellectual Property Rights and Wrongs
Too many people think that they need to secure a patent to go into business. In reality, you can start selling a product as a protected, proprietary trade secret. Consult with an attorney to understand what steps you need to take to establish your intellectual property rights so you can sue if those rights are infringed. You also need legal advice when working with suppliers, contractors, and hiring employees.
Human Resources Matters
You should involve an attorney in the setup of your Human Resources department. Determine internal procedures for handling personally identifiable information like Social Security Numbers and legally required data collection for the Department of Labor. Consult with an attorney to create draft job descriptions, company handbooks, timekeeping processes, and bill collecting so that you don’t end up being sued for violating the law. Always involve an attorney before you draft non-disclosure agreements, non-compete agreements, or hire contractors. Making a mistake with NDAs and non-compete agreements could render them unenforceable, while mistakenly treating contractors as employers can bring the IRS down on you.
Protecting the Data You’re Required to Protect
Your business may need to meet strict privacy rules for medical records or financial information for clients. Consult with an attorney so that you understand these legal requirements set forth by law, and work with a law firm like Roman Law to create company policies and privacy agreements that build in regulatory compliance to your business’ operations from the start.
Consult with a lawyer before you file articles of incorporation since this affects your business’ liability and taxes at the onset. Talk to an attorney to avoid problems with intellectual property. Your contracts, whether with customers or suppliers, should be subject to legal review. Your business should have legal input at the very setup of the Human Resources department and professional legal advice when determining how to handle data that is sensitive. Lastly, always hire an attorney before engaging in real estate negotiations on behalf of your business.