Having a lawyer on your team is a smart move for any business. Start-ups often face a wide array of potential legal issues. We will explore the ways hiring a lawyer may save your business time and money and prevent you from making costly legal mistakes.
Let’s start with your corporate structure. A lawyer will help you select the correct type of entity for your business and make sure that is properly formed in the correct jurisdiction(s). After formation, the lawyer will ensure that your business has the corresponding governance documentation.
When deciding on what the right structure is for your business it’s important to seek the advice of an attorney. Things to consider:
- Your personal tax circumstances – examples: Are you married? Have children? Own property?
- The filing costs – If you’re having a cash flow concern this could be a determining factor when choosing a business entity. Some are entities are relatively inexpensive to file while others can be more costly. Have your attorney review the potential costs for any entity recommendation.
- Ease – Some entities will require yearly maintenance and filing, while others do not. If you’re a person that prefers not to deal with the hefty paperwork you may want to discuss with your attorney an entity option that requires less paper pushing.
Location, location, location. You found a perfect space, but have no idea what should be in the lease. Your attorney will demystify terms making sure you are protected (e.g. no similar businesses, delayed rent until opening), and clearly outline the responsibilities of each party.
Contract drafting. Well-written contracts with clearly denoted terms will be one of the best investments you make in your business. Each agreement will outline the expectations of the parties, the nature of the services to be performed or products to be created, and the payment terms, among other essential provisions.
When you’re selling goods and services without a written agreement you’re creating a contract without terms that you determine. It will then be left up to common contract law if you’re ever in a dispute. An better option is to create a written agreement with your clients and customers. This takes care of your business and your customers because you’re both clear of the obligations you have under agreement.
Some of the sections you may include in your agreement:
- Names of the Parties
- Services being offered
- Method of payment and schedule of payments
- Refund Policy
- Protection for your intellectual property
- What triggering events will terminate the contract
- Venue – location where disputes will be settled
- Disclaimers, if any
- Confidentiality clause
As every business is different, there may be other items you need. Speak to an attorney about your business to ensure all your bases are covered before securing any future clients/customers with an agreement.
Hiring employees is not for the faint of heart. It is critical for you to observe the laws regarding staffing your company. Deciding to hire people as independent contractors will lead to unnecessary exposure for business. It’s important that you solidify your business relationships with the proper written terms to protect your business from tax liability and prevent your sensitive information from distribution to a third party.
For your team – have each member of your team sign an independent contractor’s or employment agreement. Some of the sections you may include in this agreement are (this is not an exhaustive list):
- Their personal identifying formation
- Company name
- Job title
- Who’s their direct report
- Their job responsibilities
- Pay rate
- Their payment schedule
- Non-Disclosure clause – a clause that indicates all company information remains confidential and will not be distributed to a third party.
- Tax obligations of the hiree, if any.
- Company benefits (ex. health insurance, paid vacation, etc.), if any.
Some tips when hiring a contractor or employee:
- Contact your tax professional to determine whether you should have employees or contractors and any tax liability you may incur with either choice.
- Get a signed agreement and their tax documentation before they start working with you.
- Discuss all policies and procedures with your company and ensure they sign a document indicating you’ve had that discussion (and they have had the opportunity to ask questions and gain clarity) or they have received a copy of your company handbook that contains your policies and procedures.
Working with an experienced attorney at the outset will offer your business protection from a slew of potential legal hazards. If you don’t have all your legal ducks in a row, you’re at the right place! Contact us right now at (832) 510-2900 to get yourself on track!