Start-Up & Business Formation

Business lawyers can help business owners when considering the many factors involved in starting a business such as where to organize, how to raise capital, who makes governing decisions, and so on. Like starting a marriage, starting a business can be deceptively simple because both can be technically formed with a few easy forms. However, those who rush in without taking the appropriate measures to establish the framework and boundaries of how the people will work together may find the venture to be emotionally draining and very expensive. An attorney experienced with business formation can help ensure that a proper foundation is constructed so that the proper expectations are set and operations can run smoothly.

Do I need a business lawyer to start a business?

There are many legal considerations when starting a business. Many businesses choose to employ an attorney familiar with the laws in the jurisdictions where the business plans to operate. Choosing an attorney who is experienced in business matters can also be helpful for advice in preventing common pitfalls that occur when starting a new organization.

What should we look for in a business lawyer?

There are several important considerations when decided to use the services of a business attorney. Because an attorney can be a business’s most trusted advisor, it is important to find an attorney who is willing and able to build a relationship with the people of the business. Knowing that a legal resource can be available when you need them most can offer great comfort when legal issues arise.

Affordability is another consideration that should be given weight. Business Attorneys are usually one of the first business expenses a new organization encounters. A start-up should be prepared to spend at least $5000.00 for attorneys’ fees related to organizing a business. A business may be discouraged by legal fees, but the costs of making mistakes from trial and error can be much more costly after the business is formed.

Besides finding an affordable trusted advisor, a business should seek out a business attorney who has experience is business matters. For example, it would be inappropriate to call a podiatrist for tennis elbow. Accordingly, seeking out business legal advice from a personal injury or family lawyer can lead to a similar outcome. 

How do we choose a name for our business?

Choosing a name can be a fun part of starting a business, but it can also create legal issues. Filing a business name under an assumed name (also known as “doing business as” or “DBA”) at the county where the business operates does not shield a company from liability. DBAs can be useful for franchises operating under a separate name, but individuals should be wary of using a DBA as a means to start operating a business without registering a separate legal entity with the state where the business operates.  Reserving a name with the Secretary of State is appropriate for establishing a business name, but this reservation will not ensure that the business has a legal right to use the chosen name. Having an attorney conduct a thorough name search including an Internet search, and state and federal trademark registrations can help prevent a dispute over a business name when the business is only beginning to operate.

Should we choose a corporation, an LLC or something else?

There is no right answer to this question, but the decision should be made after carefully reviewing the state of the business, the purpose of the business, and the plans for the business in the future. There are also tax and legal consequences regardless of the entity chosen. Choosing an entity that fails to comport with the strategy of the business can be more time consuming and costly to operate than necessary. Choosing an entity that complements the business strategy will allow the business to function as intended. Consulting with both a business attorney and a tax professional can yield the best result of choosing the most appropriate entity for any business.

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