As you may know, lawyers play an important role in most startups. After all, it’s not every day that you launch a new business, and it can be easy to step on the wrong toes because you don’t have any experience.
Besides providing peace of mind, they help you avoid costly mistakes and legal fees by drafting contracts and ensuring that your business is legally compliant. In this article, I will discuss the top 10 reasons why your startup needs a lawyer.
1. Avoiding Legal Pitfalls
You’ve heard the stories, but you’re not going to let that happen to you. Doing business without a lawyer is like driving without a seatbelt — you might get lucky and avoid an accident, but the risk is just too great — think injury claim risks against your business.
You can start by looking up detailed information on how to protect your business from these types of risks here on dolmanlaw.com.
2. Navigating Government Regulations and Licensing Requirements
Starting a new business means navigating all sorts of government regulations — getting permits, licenses, or other approvals needed to launch your business and operate within local laws.
Join Our Small Business Community
Get the latest news, resources and tips to help you and your small business succeed.
An attorney can help ensure all these requirements are met and guide you through the entire licensing and regulations process.
3. Protecting Your Company’s Intellectual Property
You’ve spent years developing your product and branding, so why would you give away those valuable assets for free?
A lawyer can help you protect them by creating intellectual property agreements that clearly lay out who owns what — and how much they’re worth — in case there’s ever a dispute down the road.
4. Legal Entity Selection
In the early stages of a company, it is crucial to determine the type of legal entity that you will use. There are several options, including LLCs and corporations.
An attorney can help you select the best entity for your business and provide guidance on how to set up your company correctly.
5. The Startup Formation Process
This process generally includes preparing documentation and filing articles of incorporation with the Secretary of State or equivalent agency in your state.
An attorney can assist with this process by drafting documents for submission to government agencies and working with you through any issues that arise during formation.
6. Handling Employment Issues
Employees are essential to any business, but they also come with certain risks and responsibilities.
An experienced employment law attorney can help ensure that both parties understand their rights and obligations under state and federal law so that they may work together effectively while ensuring compliance with all applicable laws.
7. Protecting Against Copyright Infringements
Copyright infringement is a common occurrence in the digital age and if your startup requires special attention to such areas, then it’s probably one of the signs that your business needs an attorney. If you’re not careful, your business could end up facing a lawsuit over content that was stolen from you and used by someone else. Protect yourself by hiring an attorney who can help you file copyright claims and lawsuits against companies that steal from you.
8. Managing Finances and Taxes
A good lawyer can assist with managing finances and taxes for your business. That includes helping you set up your accounting system and ensuring that all financial transactions are legal, ethical, and aboveboard.
They’ll also be able to help you manage payroll taxes, which can be a complicated affair if you don’t know what you’re doing.
9. Negotiating Contracts
Contracts are essential for any business, but they’re vital for startups. They’re the foundation of your business and its relationship with customers, partners, and employees.
You could be exposed to significant liability or even have to shut down your business without good contracts in place — and an excellent lawyer to facilitate them.
10. Ensuring a Smooth Sale or Transfer of Ownership
If you plan to sell your business someday, having a lawyer draft an acquisition agreement will help you avoid potential trouble down the road.
You should also consider having an employment lawyer draft an employee non-compete agreement as part of your deal so that key employees stay with the company after it changes hands.
A Lawyer Is an Integral Part of Your Startup Team
If you’re a founder, always remember that not everyone will have your best interest at heart when they give you advice. However, hiring a lawyer, working with them, and paying them well can be a wise investment that pays off down the line.