As a business owner, your two most important assets are your lawyer and your accountant. They are there to spot issues before they happen and put a framework in place to protect you from them. In this article, our business lawyer cover typical things a California business lawyer can do to help a small business owner with 1 to 20 employees.
Typical Duties of a Small Business Attorney
Businesses can be structured in many ways; LLCs, partnerships, joint ventures, and C-corporations are all business entities with different benefits. A small business attorney can advise you which is best for your needs.
A business will need to set up contracts with their vendors and employees. A good business lawyer will ensure your contracts are legally sound and protect you if an issue occurs.
If a lawsuit is brought against you, a small business lawyer will defend you in court and in front of government entities to protect your interests.
Business Debt collection
A small business lawyer will assist with customers who do not pay their bills. They will ensure your debt collection process is legally sound and represent you in court if customers need further persuasion.
Business Partnership Agreement
A handshake and a scribbled agreement on a napkin doesn’t cut it in the business world. You need to make a formal agreement such as a Founders’ Agreement, Partnership Agreement, or Operating Agreement to ensure the rights of all parties are protected. These agreements will also clearly lay out each party’s responsibilities and share of expenses and revenue. It is also typical of these agreements to include a “break up provision” for how all assets will be split. Your small business lawyer will assist you in drafting these agreements and ensuring all parties are fairly provided for.
Business Contract Negotiations
A small business lawyer can assist with negotiations for things such as:
- For office space: An office lease can hold many hidden pitfalls for business owners, and a small business owner will ensure your interests are protected before you sign. They can negotiate certain terms on your behalf and advise you when you are not getting a great deal.
- With other vendors: You will need the help of other companies or services to ensure your business runs smoothly. A small business owner will look over your vendor contracts before you sign them to ensure your business is protected throughout the supplier relationship.
- For mergers, acquisitions, or business relationships: At some point, you might have the opportunity to take over a business or join forces with other small businesses. Your small business attorney can help you determine if it is a sound opportunity or a potential issue. Your business attorney can also help you to formalize relationships or collaborations with freelancers and other businesses.
Managing Organization Documents and Filing Annual Fees
A small business lawyer will keep a copy of all of your organization’s documents in easy access and file all of your annual fees, so you don’t have to worry about it. They can be your registered agent so that if anything needs attention, your attorney can handle it immediately.
Contracts are extremely important in protecting your business and ensuring everyone knows their rights and responsibilities. Your small business lawyer can help you draft and review contracts such as freelancer contracts, intellectual property agreements, and employment contracts.
Employee or Independent Contractor?
A common issue for small business owners is classifying their workers and understanding the rights and responsibilities of each worker classification. A small business owner can help you to navigate the tricky legalities of unpaid versus paid interns and employees versus independent contractors. Consult your attorney early on to ensure this is done correctly.
Defend a Company from Disgruntled Customer
Your small business lawyer can assist you with a disgruntled customer who is threatening litigation. They can tell you whether the threats should be a concern to you or not. They can also represent you to negotiate a settlement or convince the customer to drop the lawsuit altogether.
Small business lawyers can advise you on tax advantages when you are making business decisions. This could mean big savings for your new business!
Protecting Intellectual Property
It is important to protect your intellectual property from the start. Your small business attorney can help you protect your property through:
Once you have a new concept, securing the appropriate protection will ensure that you can discuss your idea freely with investors, friends, partners, or advisors without worrying about it being stolen. A small business owner will help you file the relevant paperwork to ensure your application is filed correctly (most applications are denied for improper filing). This will save you time and costly application fees.
Your lawyer can also draft licensing agreements when you share or license your intellectual property. They will ensure that employee contracts state that any work they do belongs to your business, and they have no intellectual property rights.
Protecting Confidential Information or Trade Secrets
The leak of trade secrets or confidential information can mean the end of your business. Either negative press could ruin your profitability or competitors can replicate your products using the trade secrets. Your small business lawyer can ensure confidentiality clauses are in all employee contracts to minimize the risk of leaks and send formal letters or injunctions to prevent further misuse once the cat is out of the bag.
Social Media Concerns
If other users can post to your website, either through content or comments, then you need to have a review, and take down policy to ensure copyrighted information isn’t being posted.
If you run raffles, contests, and giveaways on your social media pages, it is important to note that contests and raffles have different laws. You will need to have clear information about the rules and the prize. If the contest is not clear, you could have legal issues.
If an employee posts false information about a colleague or competitor to their personal social media during office hours, the employer could be held liable for defamatory statements. Having a clear social media policy in your employment contracts and employee handbook is one way to combat this. Your small business lawyer can help with this.
If your blog or website has a signup form, it is important to understand privacy laws and the proper use of personal emails. Putting a disclaimer on your website that advice on your website is simply providing helpful information rather than a comprehensive guide is a great way to protect you from legal issues too. Your small business lawyer can advise you on all these things and help you put processes in place.
The legal implication of your numbers is often underestimated. Your lawyer can advise you on how to structure your financial documents and how to draft agreements with investors or lenders. You should consult your accountant when preparing financial documents.
Suppose you are running an event such as a conference that requires liability waivers, media release waivers, etc. If you have been to any event in the past, you would have signed one of these waivers. Your small business lawyer can draft these for you and advise on if you require general liability insurance.
If you do business in another state, you will need to comply with the state laws and consult a local lawyer. Your small business attorney may have contacts with lawyers in other states who can consult with you. You need to consider if you will keep a small business lawyer on retainer, or just consult one when the need arises. However, the more advice you seek from a small business lawyer, especially when starting a new business, the better legal position you will be in.
You may not have the budget to keep a small business lawyer on retainer to consult every time you need to make a decision, but we often forget to consider the legal implications of our decisions. Were you ever in a unique situation where an attorney helped you?
When Do I Need A Business Attorney?
Here are some situations where you will need the assistance of an excellent small business lawyer:
- You and your business partners want to make special provisions for the allocation of profits and losses in your LLC operating agreement or partnership agreement.
- You want to contribute appreciated property to an LLC or partnership.
- A major environmental issue comes up, either in your current business or in one you are buying. Environmental issues cause heavy penalties for the landowner.
- A current or former employee threatens to sue your business for sexual harassment or discrimination.
Even a simple slip up in any of the above areas can cost your business serious money and bad press. This is why the expertise of a skilled small business lawyer will save you money in the long run. A small business lawyer will help you with all general issues and can recommend a specialist lawyer for technical problems.