If you're a small-business owner, it's unlikely that you have the need or budget to hire an attorney as a full-time employee. Nonetheless, on a daily basis, your business is likely to face legal issues, and you'll be required to make decisions that may have legal consequences. To stay in compliance with federal, state and local laws, it makes sense to develop a business relationship with at least one law firm lawyer who can help your business comply with all relevant laws.
Among the legal issues you're likely to face as a small business owner:
Corporate Structure: When creating a small business, you'll have to decide which corporate structure works best for you. These include:
Each type of company has its advantages and disadvantages, so take the time to understand the pros and cons of each before selecting an appropriate corporate structure.
Contracts: We deal with contracts on a daily basis. Some may seem minor and insignificant-- such as the contract that's created each time you sign a credit card slip-- and others require more scrutiny, such as employment contracts, real estate contracts and purchase contracts. As a small business owner, you'll need to decide when a contract must be reviewed by an attorney. In some cases, you may be able to set strict guidelines. For example, perhaps you decide that any contract worth more than $50,000 requires legal review, or any contract with a company or individual you haven't previously worked with. In other instances, you may need to go with your gut when deciding a lawyer's input is necessary. For example, if you receive a contract that seems to have some unusual or confusing sections, you should consult an attorney.
Employment: As soon as you hire your first employee (and, in fact, depending on your business's structure, you may be the first employee), you'll need to address a host of issues to make sure you comply with all applicable employment laws. For example, have you created an employment manual to ensure that all employees operate under the same set of rules? Do you understand payroll taxes, unemployment insurance and other mandatory payroll expenses? Do your help-wanted ads and hiring policies comply with non-discrimination policies? An attorney with labor and employment experience can help create and review your company's employment policies and written materials to ensure that you're not accidentally violating any laws.
Insurance: It's important to talk to an insurance agent or broker to decide which types of insurance products make sense for your company. Your state may legally require certain types of insurance, such as unemployment and worker's compensation. Other kinds of insurance are optional, but designed to protect your company against expensive, unanticipated events that could otherwise put your company out of business. An attorney who understands insurance claims can help you review policies before you purchase them and can help you get the most from your policy if your company has to file a claim.
Intellectual Property: When selecting a name for your business, your attorney should review the possible names to make sure they don't violate another company's trademarks. Because intellectual property litigation can be expensive, it's worth investing some money up front-- before you've started to develop your company's brand identity-- to make sure you won't have a problem with your business's name down the road. If, as part of your day-to-day business, you are creating new intellectual property, you'll want to work with an intellectual property attorney who can help protect your property and ensure that others don't infringe upon it.
Litigation: No business owner wants to be hit with a lawsuit, which can be expensive and distract you from running your company, and most businesses are reluctant to sue other companies and individuals. But if you've tried to solve a problem and failed, litigation may be your only option. If your company is involved in litigation, hire an attorney with litigation experience to guide you through the process. An experienced litigator should be able to minimize the amount of time you have to spend dealing with the lawsuit, and can help you try to resolve the case before it goes to trial.
Real estate, particularly zoning: Whether your company operates from your home, a local storefront or an office building, you'll regularly have to deal with real-estate issues. You'll also possibly need to negotiate a lease or purchase real estate to house your company. Before picking a location, it's important to confirm that it is zoned for your type of business. And in the future, you may have to deal with acquiring real estate for additional locations, renewing a lease and changes in zoning. A real estate attorney can guide you through the legal issues.
Tax: Depending on the jurisdiction, your small business will probably be responsible for paying and collecting many kinds of taxes, including federal taxes, state taxes, local taxes, real estate taxes, sales tax, payroll tax and excise taxes. Your exact tax requirements will vary depending on where you do business, your corporate structure and your industry. And as a small business, you may be entitled to certain tax credits designed to encourage certain corporate behavior or ease the burden on small businesses to comply will all applicable legislation. Your team of external business advisors should include a tax attorney and an accountant who can help your business navigate the maze of tax laws, ensure that you comply with the rules and help minimize your company's tax payments.
Additional Resources: The US Small Business Administration, your local Chamber of Commerce and trade associations that serve your industry can all be good sources of legal news and updates that potentially affect your business.