Why You Need a Lawyer for Your Startup
Starting a business is so overwhelmingly exciting, that many times, an important detail gets overlooked. You get inspired, you jot down all your ideas, think about the name for your business, how you are going to place it on the market, and you feel like you are ready.
However, there are so many more details to a business than just name and product placement. And for those details, you need a lawyer. A small business attorney can look over all the legal catches that you may not understand, and do not have time to get familiar with, but that can hurt you in the long run if you do not address them.
Down below we have ten reasons why you would need a lawyer for your startup. Some of these reasons may not apply to you, but do not be alarmed, since there are different types of businesses.
Now that you have officially decided to open up a business, that was the first of many decisions you will have to make.
For example, what is the name of your company, and is it legally obtainable? If someone else has bought it already, back to the drawing board, and think of another name. What will you marketing line be, and can you use it without copyright problems?
Is your business going to be only online, or will there be offices? Will you be operating exclusively from the office, or both office and online? Those are all the decisions you need to make, and convey them to your lawyer, to find the best solutions for you and your business.
Before you even venture into the business world, you need to respect certain legal requirements set upon by the state, such as stating what type of business entity you want to open. This is a requirement purely because most types of businesses need some kind of registration and business licence.
To be able to open your business and start working legally, you need to register with the state, and have a business licence from a local municipality. Additionally, there may be other requirements that you need to fulfill, that may prolong the opening of your business.
These are just some of the reasons why it is a good idea to sit down with an attorney, who can save you some time, money, and running around gathering documents no one told you you need in the first place.
Before hiring your very first employee, it might be a good idea to want to run background checks on all your perspective employees. A lawyer can help with privacy issues, or you can have them run the background check, and only tell you if there are any red flags, so that you are completely unbiased in an interview.
Once you go through the long process of interviews, and find a good fit for both you and your business, you will need some kind of employment agreement. It is simply a terms and conditions of their employment with your company, but it should be drafted by a lawyer.
Some details you must comply with, such as minimum wage, number of days off, and what happens with sick days. A startup lawyer can help you both draft these documents, and explain your limitations as an employer, and your obligations towards your employees.
Everybody pays taxes. So will your startup business once it is up and running. However, good estate lawyers will make sure you are not unnecessarily paying double taxes, or unknowingly committing tax fraud.
When building your business, you need to think about many questions concerning taxes, like – what is the right structure to my startup, what are my tax obligations, how do I separate my finances, and what tax incentives are available.
A good startup attorney will explain most of, if not all of the questions above, and you should ask all the questions you want answers to, before opening your business. That way, you know what you can expect in advance, which is an important instance once you are an entrepreneur.
Once you have considered every option with your lawyer, you can hire a tax accountant on top of having a lawyer, to devise a more specific tax plan, if you think there is a need for it.
As you prepare to launch your business, one of the issues you’ll hear about and consider more is liability. You are accountable for the product or service you deliver to your clients or customers, and you want to shield yourself from personal liability in the event that something goes wrong. You may also have to purchase a liability insurance.
However, selecting the appropriate coverage and understanding the nature of that coverage are time-consuming activities that must be completed correctly, and you would be saving both time and money to investigate these coverages with your attorney, instead of trying to go about it on your own. A small business attorney can take care of obtaining the coverage you require while also reducing the risk of unpleasant surprises down the line, by thoroughly explaining the fine print to you.
Protecting your idea
Certain types of businesses will require the aid of a patent lawyer or someone with a highly specific emphasis in terms of protecting clients’ inventions. Others may still have concerns about intellectual property when it comes to problems like copyrights and trade secrets. If you’re starting a new business, chances are you’re doing so because you’ve come up with a unique product or concept. No matter the circumstances, you’ll need to protect your name, logo, and other features of your firm, and a small business attorney can assist you in this area.
Protecting brand’s identity
You could have also invested a large amount of time, effort, and money in developing, and establishing your brand name. Registering your brand name or emblem as a trademark is the best way to protect it. A trademark is defined by a distinctive word, phrase, symbol, or design.
Although trademark registration is not required to protect a trademark, it does serve as first hand evidence of ownership and allows you to file a lawsuit in Federal Court should someone else use it without permission. A trademark application’s success is based on a number of issues, which your trademark attorney will work with you to address.
However, if there is a risk of confusion with another brand or if the mark is descriptive, your application may be rejected. Before naming your company, contact an attorney to come up with a brand name that you can readily protect and register. There are two ways of registering a trademark: as a wordmark (standard characters) or a logo (specific form).
Website and data privacy
Any firm has to to run into some sort of conflict at some point, it is practically inevitable. It’s also usual for a startup company to run into a difficulty with a vendor or a larger, more established company. Regardless, business owners need a small business attorney on hand to defend their organization in such situations. An attorney who isn’t afraid to fight for his or her clients can perhaps help resolve difficulties before they become major concerns.
In other circumstances, simply stating that you are represented by an attorney may be enough to help you avoid complications altogether.
Obtaining funding for your company
You want to make sure you obtain the best deal on the best terms if you ever decide to bring in outside investors. Personal savings, seed investors, venture capitalists, and crowd fundraising are some of your financing choices. Each mode of financing may present unique legal concerns, which are frequently determined by the investor’s level of expertise.
Consider whether to structure the investment as equity or debt, the value to utilize, and price modifications after closure when obtaining financing for your company. It’s also crucial to discuss the kind of authority your investors will have over the company, including the board structure, voting rights, and whether or not the investor can authorize certain transactions.
A startup lawyer will have considerable investor-side expertise and will be able to help you anticipate all of the challenges that may arise while closing a deal.
Having a lawyer at hand is essential when starting your business. They prove to be useful even if just mentioned in the conversation. Focus on what truly inspires you, instead of piling yourself up in technicalities. Leave that to the lawyers.