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Do I Need a Lawyer to Start a Small Business?
Tuesday, 08 June 2021

Many new entrepreneurs look at the cost of hiring a lawyer for their startup and ask themselves if a lawyer is really necessary when starting their business. However, by hiring a lawyer to start a small business or corporate lawyer, you will save their fees ten times over by preventing common legal issues. California Business Lawyer & Corporate Lawyer at Nakase Wade has created a list items to help small business owners decide when to hire a lawyer to start a small business.

California Small Business Lawyer: 800-484-4610


Why Do Small Businesses Need An Attorney?

Small businesses will often have one or two people handling roles that would be handled by multiple people in a much bigger company. This is necessary but also can lead to glaring gaps in knowledge. One way to combat this is to outsource certain functions, like legal advice, to experts rather than hiring someone to handle those roles. A small business lawyer can help:
  • Ensure compliance with local, state, and federal laws.
  • Reduce risk by creating policies and procedures for your business.
  • Minimize liability in contracts and terms of service.
  • Establish iron-clad agreements and other legal documents to regulate professional relationships.
  • Help you with taxes and lower your tax liability.
  • Defend ADA lawsuit

When Does My Small Business Need A Lawyer?

Small businesses should consult a business attorney in the following scenarios:
  • When selecting a business entity for your startup - An attorney can advise you on the pros and cons of each entity as they relate to your business.
  • When choosing a name for your new business – You need to ensure the name you choose is not already trademarked or being used. This can cause legal issues down the road and may be costly.
  • Drawing up formation documents – There are a number of documents that need to be created and filed when forming a new business. Most entrepreneurs hire a lawyer to do these for them.
  • Researching and obtaining permits and licenses – A small business lawyer will be able to tell you exactly what permits and licenses you will need to open your business.
  • Contracts – Always hire a lawyer when dealing with contracts. They will ensure the contracts are enforceable and you are protecting your business interests. No matter who the contract is with, hire an attorney.
  • Patents and intellectual property protection – An attorney can help you with protecting your intellectual property and business ideas to retain a competitive advantage.

Do I Need a Lawyer to Start a Small Business?

It is not a requirement to have a lawyer when starting a business. You should examine your business needs and make the best decision for you and your business. Some business entities are much easier to DIY, where others are very complex and will greatly benefit from legal assistance.
The simplest business entity is a sole proprietorship, and they are very easy to do yourself. They are best for people who are freelancing or self-employed and do not need incorporation documents to begin trading. You will need to obtain licenses and permits, file for your business name locally, and get an EIN, but these are relatively simple to do. Most business paperwork can be done online.
A partnership is where a small business will benefit from the help of a lawyer. They require documents and agreements stating the responsibilities and resources each party must bring to the table and how profits are split. This agreement should be legally strong to ensure each party holds up their end of the bargain. It is possible to file partnership agreements through online forms, but it is advisable to hire an attorney to help with these documents.

Do I Need an Attorney to Start a Corporation or LLC?

These business entities are more complex and benefit from the assistance of an attorney. They require certificates of formation to be filed with the state and adherence to regulations. Many of these forms are available online, but it is best to ask a lawyer to draw up an agreement that is tailored to your business.
For a corporation or S corporation, the need for a lawyer is more apparent. To form these business types, you need to file corporate bylaws, issue stock, and appoint directors before you begin operating. A lawyer can help ensure your business does not fall into common pitfalls and ensure these foundational documents are done correctly for your business.
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