Up to 53 percent of small businesses get sued each year. That means that every aspiring small business owner needs a plan to defend themselves against lawsuits when they happen.
Facing litigation can have significant financial implications. The US spent a colossal $343 billion on commercial liability in 2018 alone. Small businesses shouldered more than half of those costs.
One of the best ways to avert potential lawsuits is by hiring a lawyer who’s skilled in business law. Startups can especially benefit from the services of a seasoned business formation lawyer.
If you’re still not convinced that you need an attorney for your startup business, these six reasons should be enough to take away any uncertainty.
1. An Attorney Can Help You Choose the Right Business Structure
One of the first things a business formation lawyer does is help you know which business structure is ideal. This happens during the early stages of setting up your business.
As a newbie in the business world, it can be challenging to navigate all complex legal business structures. A seasoned business lawyer knows the ins and outs of legal business structures and will help you know which option you should go with.
Your lawyer will shed light on the differences between an LLC, an S corporation, and a C corporation. Once you choose a business structure that you like, your lawyer helps you get set up correctly. In the end, you don’t end up with huge tax burdens and liabilities.
2. A Business Formation Lawyer Helps With Contract Drafting
When you’re just starting your company, there’s a variety of contacts that you need to draft. For instance, you’ll be hiring numerous talents to get your company running, and each hire requires a contract. Your business lawyer can help with the drafting of the needed employer and employee contracts.
You’ll also need multiple contracts with your vendors and suppliers. Your business attorney helps with these, too, ensuring there are no loopholes that could cost you in the future.
Other types of contractors you’ll need include:
- Privacy policy contract
- Customer relationship contract
- Terms and conditions contract for your company website
Don’t attempt to face any of these contracts without a competent business attorney by your side.
3. An Attorney Can Help Get Your Real Estate Documents Ready
You’re going to need a legally registered business address. A business attorney can help prepare all the necessary documents required to verify that you have one. Whether you’re leasing space or renting it, your lawyer will ensure that you have all the needed credentials in your possession.
Your business attorney actually takes the time to let you know all real-estate-related documents you will require, and how to get them. With these documents, your company’s authenticity and legality will not be in question.
4. A Lawyer Can Help You Protect Your Intellectual Property Rights
Your intellectual property (IP) as a company is extremely valuable, and there might be people looking to steal it. A business lawyer makes sure this doesn’t happen by helping you sign up for your IP rights on a regular basis.
Your business formation attorney will know whether your company logo is original and can be trademarked or not. They can thoroughly audit your original process, any goods or services that can be patented, and so on. This is especially essential if your business deals with artistic, digital, and other original works.
5. Your Attorney Can Connect You With Investors
A top business attorney will usually have a vast network that may prove extremely beneficial to you. Given that your business attorney has worked with numerous companies of all sizes across the country, they have a wealth of connections you can tap into.
If you need venture capital or angel investors, your business attorney may be in a position to connect you with some. If your attorney finds that your idea is worth the investment, they’ll most likely be willing to make sure that you meet the right people in their circle.
6. A Business Attorney Can Help You Avoid Unnecessary Lawsuits
Hopefully, the talent you hire will be looking to help your company prosper. But some hires can stir up trouble and seek to get you into trouble with the law for their personal gain. Keep in mind that most seasoned employees already know their way around company laws.
A competent business lawyer can be just the protective cover you need against such situations. Your attorney already knows all the potential lawsuits your startup can face in your state. They can just inform you beforehand what to do to tie all the loose ends and avert trouble long before it comes.
Your attorney will also advise you on which liabilities are your responsibility to bear and which aren’t. Thus, you’re never pressured into paying compensation fees that you shouldn’t in the first place.
The right business lawyer will also have a long-term vision for your business and take the necessary measures to set up the proper legal aspects to ensure that your chances of success are assured. Many of these aspects relate to your real estate lease and other vital contracts.
Have a Business Attorney By Your Side As You Start Your Company
A business formation lawyer may not necessarily be a cure-all when you’re starting your company, but their value can never be overlooked. They help ensure that all aspects of your business are fine-tuned, building a strong foundation for your company to succeed.
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