When you start a business, there are many things that you need to take into consideration, but often the last one on the list is whether your business will need a lawyer. There are two professionals that every single business should have from the start – a trusted accountant and a lawyer who understands your business. Often, business owners and entrepreneurs turn to lawyers after the fact or after a dispute arises. It isn’t until this moment that people often find value or use for an attorney. This can be a very risky miscalculation, which could result in an otherwise profitable business falling apart. If you wait until a problem, it can sometimes be too late if you have already been sued.
If you have not already done so, you should begin consulting with an attorney who is experienced in representing businesses and can agilely serve your company’s legal needs. Building relationships with knowledgeable and trusted advisors is essential to you and your business.
There are several common issues involved with starting a business that necessitates understanding specific laws and legal terms, as well as challenges that may arise after a business is established.
Some common legal issues for businesses include:
Corporate Formation and Relevant Documentation
The first steps are often the most important. You need to have proper legal advice on what corporate structure and formation suits your cause. You need to make sure that you have shareholder agreements, operating agreements, or are properly complying with state law to take full advantage of the protections granted to corporate entities. To do this, you must seek the advice of business attorneys that can understand the direction and goals of your company and ensure that you are mitigating risks.
Far too often, partnerships don’t have a written partnership agreement in place. While the idea of starting a business with a friend, a colleague, or a family member may be enticing, disputes begin to arise over ownership interests and entitlement to funds of the company as soon as a company becomes profitable. By having a business attorney draft the proper agreements in the beginning, you will be avoiding future disputes and it addresses and sets the expectations of all parties involved from the start.
Real Estate
Most businesses will conduct business by renting out a commercial space. It is important that an attorney review your commercial lease agreement and advise you of all your obligations and duties thereunder. Most commercial lease agreements will require personal guarantors – you need to understand the legal ramifications of the agreement you are about to enter and what can happen if your business does not become as successful as you may have envisioned.
When or if a company decides to purchase real estate, either by acquiring already developed parcels or building from the ground up, you need legal counsel to review all these agreements and give you valuable input so that you can focus your attention to generating profits and long-term planning and goals.
Employment: Workplace Policies
All companies should have employee handbooks that outlines all the workplace policies. This helps inform your employees of what is expected of them and how to handle numerous situations that may occur in the workplace. It is important that a company makes sure that it follows all federal and state laws as well. The way a company carries out it operates can be important in the context of certain litigation involving termination of employees and defending lawsuits.
Creation and Enforcement: Contracts, Invoices, and Collections
One of the defining documents of a company rests with the contracts that it creates and executes. The importance of a good contract cannot be understated as nearly all litigation that involves business revolve around contracts. This even relates back to the agreements in place between the shareholders or partners in the business. There are numerous clauses that are important and are “must-haves” in every contract. It is a recipe for disaster to rely upon online forms and contracts or relying on online legal services. These “quick and convenient” solutions almost always become expensive problems when brought into the bright lights of the Courtroom.
Asset Protection and Liabilities
To limit the health threat of COVID-19, government restrictions have been implemented regarding borders, travel, crowd size, and non-essential businesses. Consequently, many companies are unable to fulfill existing contractual obligations, and it is likely that impossibility of performance and the term “force majeure” will quickly become more important. This seldom used contract clause could become fertile grounds for litigation in the aftermath of COVID-19.
Some businesses may consider invoking the force majeure clause, if included in a pertinent contract, to excuse or delay their contractual obligations. If a force majeure clause is not included in an affected contract, there may still be remedies to lessen liability impact.
Court Representation
In the state of Florida, a corporate entity cannot represent itself in Court. As a result, any Court representation will require the employment of an attorney to advocate on its behalf. As a result, it is useful to have an attorney that is well versed in your company and can handle and address litigation. Furthermore, the attorney that has constructed all your business agreements will have an advantage in any disputes that result into litigation.
Daily Operations: Legal Advice
The concept of having an attorney available to the company means that your business will likely avoid many mistakes or legal pitfalls that you were not aware existed. This can save time and expense in the long term.
Intellectual Property
Furthermore, most companies will deal with intellectual property which would include at a minimum, trademarking a logo. It is important that you have a law firm and group of attorneys that can help assist and be agile enough to address the entire spectrum of issues present in today’s competitive industries.
If you need assistance with legal advice for your business or company, or find yourself involved in a lawsuit, please do not hesitate to contact John Frazier.
