Starting a new business always involves working with an attorney. Without one, it can be a nightmare. Among the things business lawyers will help you with include unraveling potential minefields and helping you figure out the complex world of commercial finance. They’ll explain your financial options that align with the objectives and goals of your business. They’ll also explain the legal situations that could aid your business and those that could circumvent it. A good business attorney will help you get off the ground running with practical chances of success. So, to keep your new business out of 25% of businesses that fail in the first year, according to the U.S. Bureau of Labor, get yourself a good business attorney. Among other benefits of hiring good business lawyers are:
1. Professional Understanding of Financial Requirements
From local tax relief and securities laws to compliance requirements, starting a business always involves hiring a business attorney with in-depth knowledge of the current financial regulations. They aim to ensure your business complies with all applicable laws to circumvent potential penalties, fines, and expensive and draining legal disputes. They’ll assess your business’s transactions and financial habits to flag off non-compliance practices. They’ll also explain how you can deal with such issues to keep the reputation of your business intact, maintain its market credibility, and foster trust with investors, partners, and, most importantly, customers and clients.
Another reason to hire a business attorney with expert knowledge in commercial finance is that they’ll help you develop a sound financial strategy for your business. The goal here is to maximize profits without overstepping the legal stipulations. They’ll also give you helpful insights into the best financial avenues for your business, including equity financing, mergers, loans, and more.
2. Provide Appropriate Financial Guidance
Every business is unique, so a cookie-cutter approach wouldn’t work, especially when dealing with commercial finance. Starting a business always involves many moving parts, each unique to a specific business component. Luckily, with a good business attorney, you get customized financial advice tailored to your business’s specific goals. Since they do their research to understand your business’s needs, they can align them with financial strategies best suited to them.
They’ll work with you to raise capital, plan for expansion, and hunt for investors. They’ll even recommend the best business insurance to protect your company from unforeseen events like workers’ compensation claims. A good business lawyer will help you explore various financing options to choose the most appropriate based on your business needs, from issuing stock and forming strategic alliances to securing loans. They’ll do this while explaining the merits and demerits of each option, and to help you make prudent financial decisions, they’ll highlight the challenges and opportunities of each.
3. Dealing With Intricate Legal Matters
Your company’s financial needs will involve managing equity investments, negotiating with lenders, and securing loans. To get the best out of these deals, you’ll need the help of a good business lawyer to draft contracts and agreements, do due diligence on your behalf, and keep your company’s financial needs in focus. What this means is that you get to focus on critical areas of your business.
Businesses operate in a landscape with intricate legal procedures, each requiring razor-sharp execution and in-depth knowledge of existing laws and regulations. A reliable corporate lawyer must thoroughly understand, among others, issues such as contracts, agreements, and securities law, even when you’re unappraised. When facing litigation or if you are involved in a finance-related dispute, you need a business attorney to represent you in court and get you the best possible outcome, one that’s fair and just. If they’re any good, they’ll push for the settlement of tax disputes, respond to security fraud charges, and get you the best deal in a contract disagreement.
4. Help Mitigate Risk
Starting a business always involves a certain level of risk. A good business attorney will help you identify and mitigate these risks through a risk assessment. The goal is to flag potential hazards and recommend how to mitigate them. Since they understand the complexities of the business world, they can ensure your business adheres to existing laws to avoid reputational damage, penalties, and potential legal disputes.
Among the duties of a business lawyer is to carry out due diligence to verify the legitimacy of a lender and provide expert guidance, so your business can avoid conflicts of interest and ethical dilemmas. This is helpful in many ways, such as freeing you to focus on your business’s growth and innovation, positioning it for long-term brand success. In a nutshell, they ensure your business doesn’t run into headwinds, and if it does, get out quickly with minimal damage.
5. Bankruptcy Guidance
Among the headwinds you are likely to contend with when starting a business always involves navigating bankruptcy issues. While this is a nightmare for new businesses, rest assured that even the most profitable companies once had to contend with potentially crippling bankruptcies. For instance, according to Investopedia, Apple Inc, today’s most profitable company with a $2.97 trillion market cap, almost went under in 1997 but was saved by a Microsoft investment of $150 billion, never mind the fact that the latter was one of Apple’s fiercest rivals.
Economic downturns such as those experienced during the COVID-19 pandemic are bound to happen. When they do, many businesses without a solid financial footing find themselves in bankruptcy trouble, and without the guidance of competent business lawyers, overcoming bankruptcy can be arduous. Luckily, bankruptcy doesn’t have to be the nail that confines your business to the doldrums of failure.
A good business attorney can guide your company to survive bankruptcy and thrive. They are experienced in situations like these and can advise on the best course of action. For instance, they may advise filing for Chapter 11 bankruptcy so you can reorganize your business. They’ll recommend a strategy for dealing with creditors and sometimes help you individually discharge part of your debt. With the right business attorney, your business will be on course to financial recovery.
6. Protection From Risks and Liabilities
A new business must watch out for liabilities as they greatly impact a company’s profitability. Starting a business always involves minimizing or eliminating liabilities while at the same time maximizing profits. For instance, if you are a roofer, you want your business insured against accidents that happen during roofing. You also require appropriate insurance if you’re hiring foundation contractors, as so many things can go wrong, and the last thing you want is to be asked to pay compensation you weren’t insured against. A good business lawyer understands this and will do their best to protect you against potential liabilities. They’ll ensure you have all the critical documents for people to fill out to indemnify you against liabilities and risks.
They’ll prepare all the contracts your business needs for internal and external purposes. You’ll need to sign agreements with employees and partners and ensure your company’s services and products include appropriate disclosures and disclaimers. As your business grows, you must hire more employees, contractors, and vendors. A good business lawyer understands that companies are dynamic, and so does their need to enter into contracts and agreements continuously.
7. Establish Business Structure
Starting a business always involves establishing a basic structure to serve your company’s goals. For instance, you must decide if yours is a corporate entity, LLC, or a sole proprietorship. The activities of a corporate entity include holding assets or running an enterprise. Although it may comprise shareholders, officers, and individual directors, it’s a legal entity.
Technically, a limited liability company (LLC) is not a corporation under state law. It’s a legal structure for providing you with jurisdictional limited liability protection. A sole proprietorship, on the other hand, is unincorporated. It’s owned by a single person responsible for paying personal income tax on their business’s profits. In most cases, sole proprietors use their names to conduct business, as having a separate one is deemed unnecessary.
A business lawyer will help you clarify what business structure defines your business. For instance, a tree removal company operates differently from an alarm monitoring system company. While they may adopt the same business structure, their way of conducting business may be very different.
Business attorneys can also help international entrepreneurs seeking to enter the U.S. market. This is critical since such entrepreneurs must meet particular rules and regulations that may differ slightly from those for U.S. citizens. Irrespective of the stage your business is on, a business lawyer will help you avoid or overcome risks and liabilities.
8. Helps With Employment Agreements
One of the things you need to deal with when starting a new business is hiring employees. This activity is more complex than one may think. For instance, while you may need to hire someone who can carry out commercial septic system repairs, you’ll need to factor in state and federal legislation when hiring them. You also can’t fire them at a moment’s whim without following the procedures laid down in employment law.
A business lawyer will help you draft employment contracts with clear stipulations on what’s expected of you and the employees. It should outline clearly what the compensation is, and the benefits employees can expect to receive from your company. The contracts should address issues such as commercial confidentiality, paid time off, dress codes, protection against employee data theft, and non-compete clauses to restrict employees from contacting your customers once they leave your company.
The key is to constantly stay in touch with your lawyer, especially during employment termination and when a dispute arises between you and your employees. A good lawyer will protect you from frivolous suits and dissatisfied employees. Let your lawyer guide you on the steps to follow before firing such workers to avoid charges of unlawful termination. This is critical, especially since starting a business always involves many inherent risks, and you don’t want trouble with employees at this stage of your business.
9. Help With Tax Compliance
To avoid putting your business and yourself in financial jeopardy, strictly adhere to applicable tax compliance laws. The government doesn’t take kindly to businesses that don’t pay taxes, and the last thing you want is for it to breathe hard on you due to an innocent tax mistake. The problem is that most tax laws are extremely complex, especially those for businesses, and negotiating your way past them is time and energy-consuming.
Luckily, you don’t have to since an experienced tax attorney exists to help businesses like yours pay their taxes promptly and accurately. You don’t have to put a tax attorney on a retainer; you’ll only need to file taxes once or twice yearly. Your lawyer may also be aware of loopholes in the system that could save you a lot of money. So, whether your business is about epoxy floor coating or AC installation, paying taxes is mandatory, and failure to do so could get you into bad books with the government.
10. Help With Reviewing Business Relationships
Like everything else in life, businesses change. As they change, internal and external agreements change as well. Even if starting a business always involves a thorough understanding of managing relationships in a company, it’s crucial to understand that businesses are dynamic. With time, business needs change. For instance, when dealing with an AC install, skills that were critical yesterday could be obsolete today due to advances in modern AC technologies. You’ll need a competent lawyer to help your company manage its relationship with employees and retrain them to align their skills with emerging technologies.
A business lawyer will help you review documentation, redraft, or correct agreements to reflect the changing relationships in the workplace. While this comes at a cost, it’s nowhere near that of contest disputes in court. The goal of these agreements should be to prevent disputes between clients, employees, vendors, and partners and ensure your business stays profitable.
There are many reasons why starting a business always involves working with a good business lawyer. The most critical thing, however, is to ensure your new venture strictly adheres to the relevant local, state, and federal laws regarding tax compliance, dispute settlements, and having the requisite certificates and licenses that allow you to operate. You’ll also need to decide what structure your business will follow: sole proprietorship, LLC, or a corporate entity. Also, what’s critical is drafting appropriate contracts and agreements to restrict your extent of engagement with different parties.