which type of lawyer do i need to start a small business

Full Answer

Is an attorney essential when starting my business?

Unfortunately, there's no easy answer to these questions. Whether you need an attorney to start your business depends in large part on what legal type of business you're starting. The simpler your business, the less you'll need an attorney. A sole proprietorship is the simplest business form.

How to hire a business lawyer?

The Ultimate Guide to Hiring Freelance Lawyers for Your Law Firm

• Experience is Important. Don’t just rely on the freelancer’s resumé when considering them. ...
• Determine Their Availability. ...
• Understand Their Work Quality. ...
• Reasons for Freelancing. ...
• Meeting Expectations. ...
• Client Relationships. ...
• Communication. ...
• Working Hours. ...
• Final Take. ...

What is a startup lawyer?

Where to find a startup lawyer

1. Get a referral from a lawyer who has helped you with personal legal matters. ...
2. Attend business events & conferences. Startup incubators, industry conferences and business meetups are other great ways to find lawyers. ...
3. Online legal directories & services. ...
4. Get referrals from other business owners. ...

What is a small business attorney?

What Are Small Business Lawyers?

• Which business structure to choose, such as choosing between an limited liability corporation (“LLC”) or an S Corp;
• Which contracts and business documents will need to be drafted, such as employment agreements and waivers;
• What to do when a contract is disputed or breached;

More items...

Should I speak to a lawyer before starting a business?

But meeting with a small business attorney before starting a business can be one of the smartest moves you'll ever make. A business lawyer can explain how to start a business and answer your business law questions. But more importantly, a lawyer can identify the risks you face and help you minimize them.

What do startups need from lawyers?

Startups need lawyers when lawyers provide the best, value-driven solution for specific problems the startup is facing. This will change from one startup to another. Here are some variables: Company formation: In most cases, you don't need a lawyer to set up a company, and it will be overkill to use one.

How do I choose a law firm for a startup?

Choose a Startup LawyerHow to: Choose a Startup Lawyer. ... Choose a trusted partner. ... Look for a partner whose experience aligns with your needs. ... Initiate an open conversation about priorities and response time. ... Decide whether to partner with a big firm or a small firm. ... Ask about fees. ... Questions for prospective lawyers.More items...

What two characteristics should a lawyer have when working with a startup?

Take note of what the attorney says and does, and look for the following qualities:Experience. ... Understanding. ... Ability to communicate. ... Availability. ... Rapport. ... References. ... Reasonable fees.

What Kind of Lawyer Do I Need for Small Business?

If you are running any kind of business, chances are that you will need legal representation at one point in your business’s life. No matter how big or small, legal challenges are likely to come up.

What Business Lawyers Do For You

Any time money changes hands in America today, you open yourself up to the possibility of a lawsuit. If you have a brick and mortar store, with an icy sidewalk, you have a potential liability on your hands.

Retain an Expert Today

A Duke Law School conference in 2010 found that litigation costs for small businesses cost Americans $115 million in 2008, which was up 73 percent since 2000. Those litigation costs are rising annually and will be even higher for small businesses that don’t have their legal needs managed appropriately.

What does a lawyer do for a business?

Ensure compliance: A lawyer can help make sure that your business opens and operates by federal, state and local laws.

How can a lawyer help you?

Establish agreements: A lawyer can help you establish formal legal documents that govern relationships across the organization . This way, you know what you owe to your partners, employees, vendors, customers or clients and their deliverables in return.

What is the purpose of picking a business name?

Picking a business name: An attorney can perform the research needed to ensure that the name you give your business is not in use by another business or trademarked. Operating under an already trademarked name can cause financial and legal woes down the road.

What can a master tax attorney do?

Master taxes: Attorneys trained in tax can help ensure that you pay the tax you owe; they can also help lower your tax liability by identifying valid business deductions and reimbursements.

Can a lawyer help you patent a business idea?

Patenting a business idea: A lawyer can help advise you about how to keep your patent confidential, search for and avoid duplicate patents already filed with the U.S. Patent and Trademark Office, and file a patent application.

Is a partnership agreement mandatory?

More importantly, creating a partnership agreement for partners to enter into , while not mandatory in most states, is strongly urged. You can also file these forms yourself through online legal services.

Do I need a lawyer to start a small business?

Retaining the services of a lawyer is not required as a condition of starting a business. In fact, many of the steps of starting a business cited above can be performed without a lawyer. This means the decision to hire a lawyer or go the DIY route depends on your business entity. Also, consider the amount of time and effort you are willing to expend to get your business off the ground.

Can you save money by doing things yourself?

You can save a lot of money, and you'll learn a lot from the process of doing things yourself.

Do S corporations have to register with the state?

Corporations or S corporations must register with the state as well. They must prepare bylaws and other documents, and they have a far more complicated ownership structure. You'll almost certainly need an attorney to help you start any type of corporation, An S-corp starts as a corporation then elects S corporation status with the Internal Revenue Service. If it sounds complicated, it is. You might need help.

Do LLCs need to register with the state?

Partnerships and LLCs must register with the state. Documents must be prepared, such as a partnership agreement or an LLC operating agreement. You might be able to register online with your state or use an online service to register your business, but it might be a good idea to use an attorney if your business is at all complicated.

How Do I Find a Small Business Lawyer?

An attorney referral service, such as LegalMatch, is how most people locate small business lawyers. Such services match you to an attorney in your area based on criteria that you provide. Other means of finding an attorney include an online search, and asking friends and family. No matter how you go about finding an attorney, there are some things to keep in mind:

What are some examples of small business attorneys?

Other examples of tasks handled by small business attorneys include: Assisting with negotiating, drafting, and reviewing business contracts; Helping with business startup and incorporating filings;

What Things should I Keep in Mind when Starting My Small Business?

There are several advantages to starting your own business, as was previously discussed. However, there are also several things to keep in mind when starting a small business. Some examples include but may not be limited to:

How Do I Finance My Small Business?

According to statistics provided in 2018 by the Office of Advocacy for the United State Small Business Administration, personal and family savings account for the most common source of financing for small businesses. Other common ways of funding and financing small businesses include:

When Should a Startup Hire a Lawyer?

It may be difficult to properly anticipate legal issues that a startup or small business may face. You should consider hiring an attorney for the following situations:

How many employees are needed to start a small business?

For manufacturing industries, small businesses are to employ less than five hundred employees; for non-manufacturing industries, the criteria is typically less than $7 million in annual income.

What are the different types of attorneys?

Examples include general business attorneys, contract attorneys, and tax attorneys. Local attorneys will be aware of what laws apply to which industries, and what specific licensure you will need to obtain to start your own business.

How to prevent unnecessary attorney costs?

To prevent unnecessary attorney costs at the inception of your business as well as tremendous costs after a lawsuit has been filed, you might consider a consultation arrangement with an attorney. Such an arrangement would entail you doing most of the legwork of research and the attorney providing legal review or guidance.

What to do if your business is facing challenges?

Contact a qualified business attorney to help you address potential challenges a business can face.

What happens if your business doesn't cause environmental problems?

An environmental issue arises and your business is involved (even if your business didn't cause the environmental problem, you may be penalized) Negotiating for the sale or your company or for the acquisition of another company or its assets.

Do you need legal help when it's too late?

But when you do, it's good to know where to find the right one. And -- more to the point -- you may not know you need legal help until it's too late, as attorneys can help you stay in compliance with the law and spot developing legal issues early.

What can a lawyer do for a business?

A lawyer can review your business plan and flag issues of concern. Or they can draft your plan for you. Since a sound business plan is critical to get a business loan or investors on board, it is worth the investment to have an attorney review it.

What can a business attorney do?

A business attorney can help you draft documents and agreements for your business. For example, when you start your company, you may need an operating agreement or bylaws.

How can a tax lawyer help you?

Tax lawyers can also advise on business strategies to reduce taxes. For example, they might recommend launching or expanding your business in one state instead of another. As a result, you might save thousands of dollars in taxes by paying a few hundred in legal fees.

Why is it important to have an attorney for a partnership?

Equally important is addressing how a partnership may change as the business grows (i.e., one partner wants to leave the company). Again, enlisting the services of an attorney will define the relationship and avoid future conflicts.

What documents do business owners use?

In addition, business owners frequently use sales contracts, delivery agreements, and equipment leases. Having an attorney review these documents and advocate for your interests can save you time and trouble in the future.

What is the best legal advice for a business?

Probably the best legal advice a business attorney can give is how to correctly set up your company to minimize your taxes and business liabilities. An attorney can show you the advantages and drawbacks of your business formation to tailor the right one for you.

What to do if you have employees?

If you have employees, you will want employment agreements spelling out the terms of the working relationship. Additionally, you want to avoid potential lawsuits if you need to discipline or terminate the employee.

What is the simplest form of business?

The simplest structure for a one-owner business is a sole proprietorship. As a sole proprietor, a business owner has relatively few regulatory burdens and a high degree of control and flexibility. There’s no paperwork required to establish a sole proprietorship–it’s automatically created as soon as you start doing business. However, if you’ll be using a business name other than your own name, you’ll probably need to register your business name as a DBA with your state or locality.

What is an operating agreement for an LLC?

An LLC should also have an operating agreement that details how the LLC will be run and the rights and responsibilities of the members.. Many small business owners choose LLCs for their simplicity and flexibility.

Is a sole proprietorship a business entity?

A sole proprietorship does not form a distinct business entity, which means that there’s no legal difference between the business’s assets, debts and other liabilities and those of the owner. This creates a risky situation for owners, as they’re on the hook for any legal or financial failures of the business. You can’t take on partners and remain a sole proprietorship, and your ability to get a loan for your business will hinge on your personal credit. Sole proprietors report business income and expenses on their personal tax returns, and they pay income and self-employment taxes on their profits. Some business founders use sole proprietorships to test a business idea before committing to a more formal structure and paying the higher fees associated with those structures.

Is liability insurance required for a business?

No matter how well a business is run, liability risks can never be eliminated. Risk is part of the cost of doing business, and it pays to be prepared. Depending on the circumstance, certain insurance policies may actually be legally required as a safeguard, much like personal auto insurance is.

Is LLC a corporation?

A Limited Liability Company or LLC balances the relative ease and flexibility of a partnership structure with the increased risk protection and potential tax advantages of a corporate structure. LLC owners (known as “members”) aren’t personally liable for business obligations. By default, LLC members are considered self-employed, and they file and pay taxes in the same way as owners of a general partnership or sole proprietorship. But an LLC can also elect to be taxed as a corporation. To set up an LLC, you must file articles of organization with your state.

Why do businesses incorporate?

Incorporation Documents. The main reason many business owners decide to incorporate their new businesses is to minimize their personal liabilities. Once the business is legally incorporated, it exists as a separate entity, putting a barrier between the business and the owner’s personal assets.

What are the bylaws of a corporation?

Bylaws – When you initially register your corporation, you must also file bylaws with the state. Bylaws are documents defining how the company will govern itself. Bylaws include information, such as the number of board directors; the directors’ powers; dates, times, and locations for annual board meetings; how directors are elected and removed; officer duties; and voting rules.

What is a specialty license?

Specialty licenses are required for professional and niche businesses that require specific skills to operate, such as hair and nail salons, accountants, attorneys, plumbers, and daycare. Most required licenses and permits are issued by the city, county, or state where your business is located.

What is a well organized business plan?

A well-organized business plan can help you develop other crucial legal documents needed for your new business.

Where to find articles of incorporation?

You can find the form for these documents on the Secretary of State’s website. Once filed and approved, the state considers the business “domiciled” in that state (i.e., the state is the corporation’s home state). The corporation is now obligated to conduct business according to the laws and codes of the state. (There is also the option to incorporate your business in a different state than where your business is located, more on that later.)

Can a sole proprietorship be a DBA?

For sole proprietorships, the business’s legal name might be the owner’s name but could also run under an assumed name such as “The Marketing Guy.”. To be completely transparent, the business owner needs to file for a DBA.

Do sole proprietors need a federal tax ID number?

Businesses operating as a sole proprietorship don’t need a Federal Tax ID number if they don’t have any employees; they simply use the owner’s social security number on all legal documents. However, if your business is a Corporation, Limited Liability Company, or a partnership, you must apply and obtain a Federal Tax ID number or Employer Identification Number (EIN) through the IRS.