Hiring a Lawyer for Business Startup: What You Need to Know
Originally posted on https://www.halt.org/hiring-a-lawyer-for-business-startup-what-you-need-to-know/
The dream of becoming your own boss is seductive. Making your own hours and signing your own paycheck is only one of the many perks of becoming an entrepreneur.
But before you quit your day job, hire a lawyer for business startup. Lawyers might not seem necessary in the digital age, but a good attorney can help you avoid many common pitfalls startups face.
Let’s explore the many advantages of hiring a lawyer for your startup.
Solid Business Formation
Yes, your county’s business division might have filing paperwork available online. To save money, your instinct might be to download the articles of incorporation to mail in yourself.
This can be a risky decision if you have no understanding of how business entities impact your financial and legal standing as a business owner. An attorney can help you choose the business structure that makes the most sense for your goals.
For example, a tech startup won’t want to incorporate as a sole proprietorship if the company plans to go public at a later date. Not understanding your limitations when you choose a legal entity can mean placing limitations on your business goals.
Your relationship with customers, investors, and coworkers can all be affected by the type of entity you choose.
The bigger your dreams, the larger the legal protection you may need. Starting out correctly can help save you headaches in the long run.
Here are the most common types of legal entities:
- Limited Liability Corporation
- Limited Liability Partnership
- Sole proprietor
Navigating Intellectual Property
Intellectual property goes by many names. Artwork, designs, computer software, and literary works are just a few.
A good business lawyer can help you navigate the complex world of intellectual property and avoid theft of your ideas. If intellectual property is at the heart of your business, it’s important to put the necessary protections in place.
Lawyers can help you choose between a patent and copyright or decide whether it’s necessary to trademark the logo. Here are the common types of intellectual property.
Copyright Law applies to fine arts, publishing, entertainment, and software development. If another person or business chooses to copy, present, or display the work without permission, the owner is protected by copyright laws.
Trademarks apply to words, phrases, symbols, and design. Business entities can apply for a trademark on a design to make sure no other business copies its image or uses its branding without permission.
Famous brands like Coca Cola and McDonald’s have trademarks on their brands to make sure their logos are protected. If another brand creates a logo or slogan too close to your own, you can file a complaint to avoid a copycat brand.
Trademarks laws are regulated by the Federal government to protect against infringement.
The most complicated of intellectual property filings is a patent. Inventing something new doesn’t automatically give you the right to a patent.
Instead, you must prove that the invention rightfully belongs to you. This can be a time-consuming process that is best overseen by an attorney.
Patent law can apply to a design, a process, or a product. When you become the owner of a patent, you have the right to protect yourself from anyone else producing or copying your process.
Anyone seeking to use your patent must first get permission in the form of a license, assignment, or purchase.
Once you’re in business, you may establish practices, formulas, and ways of operating that give you a competitive advantage. Protect your trade secrets by consulting with an attorney.
Every idea won’t qualify as a secret, but information that’s specific to your product or service might be worth pursuing. A famous example of a trade secret is the formula for Coca Cola, which is protected by a variety of intellectual property laws.
Settling Founder Disputes
Disagreements amongst business partners are guaranteed to happen. The severity of the dispute, however, is impossible to predict.
Consulting with a lawyer during the startup phase can help you and your business partners decide how to settle any disagreements that may arise. Whether it be financial, operational or otherwise, legal documents can help set guidelines to place limits on disputes.
Taxation and Representation
Legal entities are all taxed differently. The amount of revenue you earn each year should help determine which entity you choose.
Consulting with an attorney can help you simplify this process. Choose an attorney with experience in your industry, as they’ll have access to past client financial information.
Having access through your attorney helps you make more accurate predictions on how a business in your industry should perform within a given time.
Your business entity needs to be set up in a way to maximize compliance with the IRS so that you have fewer tax surprises when you reach success.
The Best Lawyer for Business Startup
Finding a lawyer for business startup won’t be a walk in the park. Given the long long-term impact of the work of an attorney can provide your business, you should take your time choosing the right professional.
Consider the services you need an attorney to perform before getting started. Make a list and estimate the experience level, the attorney should have to perform each service.
A first-year associate may not have the experience to negotiate with a 20-year venture capitalist. Make sure the work matches up with the attorney’s areas of expertise.
Set aside time to interview potential attorneys through consultations to learn whether the firm is a good fit for your new business. A good attorney will be a trusted advisor that allows you to feel confident making important business decisions over time.
For more information on navigating the startup process, check out our blog for updates.