Many entrepreneurs start their own business to follow their dreams and fulfill their passion. Following your dreams will fulfill you in a way that working for someone else may not do. You are in charge of creating your business from the ground up, so you can shape your company to be something you’re proud of and that you may even be able to pass on to your children as your legacy.
Starting a business from scratch can be one of life's most exciting—and challenging efforts. We’re going to help. We’ll ask and answer the questions you should ask, but might not have thought about. Personal protection, taxes, compliance, intellectual property, potential risks, even lawsuits.
- The USA has the most startups in the world, totaling a massive 71,153. India is second on the list with only 13,125
- There are 33.2 million small businesses in the U.S., composing 99.9 percent of all American businesses, according to the Small Business Administration. General U.S. Small Business Statistics in 2023
- The 2022 SBA Small Business Profile found more small businesses opened than closed.
- 40% of small businesses cited labor needs at the end of March 2022 with millions of job openings for small establishments.
- Small business employment declined by over 9 million in the first half of 2020, but subsequent gains have made up for about 60% of those losses.
Do I Need a Lawyer To Start a Business?
It is a common question for any entrepreneur to ask. After all, business owners wear many hats. However, a frequent mistake that entrepreneurs make is to do everything themselves. Not only does it take time away from their business goals, but it also slows their progress. On the other hand, successful business owners know their talents and what tasks they can outsource.
One of the ten common traits among entrepreneurs is delegating responsibilities to others, thereby freeing up their time. The key, of course, is knowing which tasks to delegate.
When deciding to use an attorney for your business, list the steps needed to start your venture and determine who is best doing that work. But keep in mind that there are specific reasons why you may need an attorney for your business.
Why Does A Small Business Need A Lawyer?
Whether you are starting a company on your own, with partners, or with investors, a business attorney can help you protect your business and your investment, prevent misunderstandings with your business partners, and most importantly, protect yourself from personal liability for business debts and legal obligations.
A business attorney will make sure you make an informed decision that is right for you. Your options depend on your short- and long-term business goals and on the type of business you are about to start. Do you need liability protection? Will you have business partners? Will you hire employees or raise capital in the future? Will your immigration status and income level have an impact on the type of entity you choose? A business attorney will explain you whether starting a business as Sole Proprietor, or forming a Corporation, a Limited Liability Company, a Partnership or some other entity, is the best option for you.
Protect Yourself and Your Family’s Assets
One of the reasons to incorporate a business is to protect you and your personal assets from personal liability. However, filing articles of incorporation or articles of organization alone, will not release you from personal liability. An entity must be properly formed according to law and must comply with the statutory formalities. You must keep and operate the business separate from your personal finances. These are basic considerations that will give you initial protection.
Contract Drafting and Negotiations: Avoid Oversights!
A business attorney will draft the standard contracts you need when dealing with customers, clients, employees, and suppliers, and will help you understand contracts other parties want you to sign. When you are about to enter into an important agreement, you will want an attorney to review it and make sure it gives you enough protection, provides for indemnification in case of a breach, and the terms are clear and fair. You invest in the success of your business when you engage a business attorney to draft and revise contracts that will have legal effects on your business.
Buying or Selling a Business
Whether you are buying or selling a business, there are many legal consequences associated with it. A business attorney will conduct the due diligence and advise you whether you should buy the stock of a company or its assets, will write the acquisition and purchasing agreements, and transfer the licenses and permits necessary to continue operations. An experienced business attorney will help you save money and avoid liabilities.
Licenses and Permits
Additionally, you may need to apply for a license(s), permit(s), and you may even need to give public notice of your intention of starting a business or acquiring assets of an existing business. A business attorney will guide you through the process and file all necessary documents with the respective boards and government offices.
The type of entity you select for your business will have an impact on your personal and on your business taxes. Preliminary tax questions should be answered before you get started. If you hire employees, you need to set up payroll and collect payroll taxes. A business attorney will respond to preliminary tax questions and will work together with your Certified Public Accountant (CPA).
Are you starting a business based on a product or a design you created? Designs, logos, original work, and your own inventions are trade secrets and they have a value. Protecting your intellectual property is critical in today’s competitive market. Your intellectual property may require filing registrations of your trademark, patent or copyright. Whether you have an innovative product you want to protect or you are about to enter into an agreement with a third party that requires the disclosure of certain protected intellectual property, a business attorney can help you protect, preserve, and prosecute your legal rights to your intellectual property.
Employee Laws and Policies
Hiring employees and growing your team should be the focus of your business. A business attorney can guide you on the applicable regulations, codes, and laws related to hiring employees or independent contractors. The right legal advice will prevent you from possible claims for discrimination, misclassification of employees, or breaking state and federal law.
Starting a business can be a fulfilling and exciting experience, but it also comes with challenges. As an entrepreneur, you are in charge of building your business from the ground up, but it's important to consider factors like personal protection, taxes, compliance, and potential risks. The US has the highest number of startups in the world, with 33.2 million small businesses making up 99.9% of all American businesses. In 2022, more small businesses opened than closed.
It's common for entrepreneurs to question whether they need a lawyer when starting a business. Successful entrepreneurs know how to delegate tasks, including legal responsibilities, to focus on their business goals. A business lawyer can help protect your business, prevent misunderstandings with partners, and protect your personal assets from liability. The type of business entity you choose will have an impact on taxes, and a lawyer can guide you through the process. Additionally, a business lawyer can help with contract drafting, buying or selling a business, obtaining licenses and permits, and protecting intellectual property. Working with a business lawyer and a certified public accountant can help ensure the success of your venture.