Frequently Asked Questions About Business Law and Business Transactions
Do I really need an attorney to draft my business contracts?
It may be tempting to use a DIY business contract or an online document preparation service. However, there are at least four reasons why you should hire an attorney to draft your business contracts. You want to ensure that the contract is valid and enforceable. If you need to litigate the terms of the contract, discovering the contract is invalid in court can result in substantial losses. On the other hand, you also want to ensurethat you are not entering intoa contract with terms that would be harmful if you are bound to those terms.
Customizing a contract template may appear easy. However, if you delete the wrong term or leave a term in the contract that should be deleted, you could have unintentional legal consequences. Lastly, you may not be protecting your best interests if you do not utilize the experience and legal knowledge of a business transaction attorney when drafting business contracts.
How do I start a business?
You have an idea for a business, but you are unsure how to start the business. Some entrepreneurs rent a building and open their doors to the public without much thought or preparation. Other individuals may create a website to sell products or services online. However, other entrepreneurs may seek the advice of an attorney to develop a business plan, choose a business entity, review assets, andincome, determine if a patent or trademark is required, and resolve countless other business-related issues.
You can jump into a business with very little preparation. However, it may be best to consult a business transactions attorney to ensure you take all legal and financial steps to give your business a strong foundation before you begin selling products or serving customers.
Should I incorporate my business?
You need to begin by defining your goals for your business. Some business entities can help you achieve your goals more efficiently. You must also review the pros and cons of each business entity before determining which entity is best for you. For example, if you are a sole proprietor, you might not need to incorporate. However, continuing as a sole proprietorship could increase your risk of personal liability. Incorporating your business can provide a higher level of protection from business liabilities and risk. In addition, certain business entities can offer substantial tax benefits, so you must carefully consider taxes as you decidewhether or not to incorporate. Talk to a business tax attorney today.
Should I write a business plan?
In almost every case, you need a written business plan to increase your chances of success. A business plan gives you a blueprint to follow as you work to reach your business goals. Reasons to create a business plan include:
· A detailed description of the business
· Provide an estimate of start-up costs
· Deal with issues related to finance and investment
· Entice investors and lenders to fund the business
· Provide revenue estimates
· Outline assets required for the business
· Develop a marketing strategy
· Anticipate potential problems and develop strategies for dealing with problems
· Set forth the structure for the business and determine the business entity
There are many reasons to develop a business plan. It is difficult to know where you are going if you do not have a road map. The same theory applies to a business plan. For more help on drafting a business plan, consult with an experienced business transaction attorney.
Can I choose any name I want for my business?
First, you want to choose a name for your business that catches the attention of potential customers and clients. The name should be unique from other business names. Your name should also relate to your product or service for marketing and branding purposes.
Once you choose a business name, you must determine if the name is available with state and federal agencies. One of the best ways to protect your business name is to register the name with the state’s business filing agency. In some cases, you may also want to apply for a federal trademark and/or copyright. An experienced business transaction attorney can help with this step
An important consideration is your internet name. Names on the internet must be unique, and the name you choose for your business may not be available online. Before registering your name, you should check to ensure you can claim the domain name, as well as social media handles you desire.
What should I put in my company’s bylaws or operating agreement?
The items in your company’s bylaws and operating agreement depend on many factors, including the typeof business, the number of owners, the business structure, the business entity, and the goals for your business. Developing bylaws and drafting an operating agreement are crucial steps in opening a business if you want your business to operate smoothly.
Some of the common items included in most company bylaws or operating agreement include:
· Company’s name, address, telephone number, and headquarters.
· The number of company officers and their duties.
· If the company has stock, the classes of stock and the types of shares issued by the company.
· The procedure for maintaining business records.
· The roles, duties, and responsibilities of each owner, partner, member, and corporate officer.
· The procedure for amending the bylaws and operating agreement.
· Interest owned by each member, partner, or owner.
· How to handle an emergency if one or more owners or key employees must be out of work for an extended time.
· When, where, and at what time shareholder and director meetings will be held.
· How manycorporate officers and directors are required?
Your bylaws or operating agreement should be tailored to meet the needs of your business. Working with a business attorney can help you ensure your business is protected, without running afoul of state business laws.
How can I protect my company’s intellectual property?
There are several ways to protect your company’s intellectual property. First, you may need to apply for a trade secret, patent, trademark, or copyright. If you plan to sell goods overseas or develop products overseas, do not forget to pursue foreign registration too.
In addition, you may also need to utilize one or more other strategies for protecting intellectual property. For example, you may need to use Non-Disclosure Agreements (NDAs) with employees, contractors, suppliers, and others. Talk to an experienced business transaction attorney today.
Does my business need contracts?
In almost all cases, a business needs to use contracts for various transactions and relationships. You will likely have contracts for rent or lease payments, suppliers, vendors, employees, contractors, real property, building contractors, service contracts, etc. it can be difficult to understand all laws related to contracts. However, it is important to feel confident that your contracts protect your best interests while providing you lucrative returns.
As mentioned above, you can try to draft your contracts or use an online preparation service. However, you may soon realize the contracts you generated with a “shortcut” do not protect you nor your business adequately. Businesses use contracts for almost all aspects of the business. Therefore, it is prudent to have well-drafted, legally sound, and enforceable contracts drafted by a business attorney.
How can I protect my personal assets from business losses and lawsuits?
The business entity you choose has a significant impact on the level of protection you receive for your personal assets. If you are a sole proprietor, you have very little or no personal liability protection. However, other business entities provide personal protection from liability. Corporations offer the highest level of protection. Some partnerships can offer one or more of the partners with a high level of protection for personal assets.
Before choosing your business entity, it is crucial that you review the pros and cons of each business entity to choose the business entity that gives you the protection for personal assets you need while allowing your company to grow and thrive.
Do I need to talk to a lawyer after I launch my business?
It is better to consult with a business attorney before you launch your business. Your lawyer can provide valuable legal advice, support, and guidance as you take steps to structure and protect your business so that when you open your doors, you are confident you can make this business profitable for years to come. However, if you began your business without consulting with an experienced business attorney, it is never too late to seek competent legal advice.