By last year, nearly 27 million Americans had started or were running their own businesses, with thousands more preparing to do so within the next three years. While most entrepreneurs concern themselves with the creative and administrative of successfully launching a product or service that people want, the legal side of proprietorship shouldn’t be overlooked. Simply put, your startup needs a lawyer for the following reasons.
Transitioning from idea to operation requires completing a few necessary legal steps. The first is securing your name: making sure your company and the brand under which you operate isn’t infringing on a similar businesses, and likewise, that you are safeguarded from someone using yours. And it doesn’t end at the name. In the early stages of businesses, it is important to file a patent for your invention or idea, or risk losing rights to your competition. Consulting with a lawyer to determine the necessary forms and procedures to keep your businesses protected.
- Business Structure
Determining business structure is one of the most crucial but often confounding steps of the entire business process. The reason is, each of the structures, from sole proprietorship to LLC, has its benefits and its limitations. Selecting the wrong structure could cause issues with regard to taxes as well as prevent the company from raising capital. Once again, an attorney can provide the best advice upfront to set the company on a successful path.
Securing funding from outside investors can make or break a company; without it, substantial growth may be impossible. Done incorrectly, however, businesses owners may find themselves in a trying situation that could create additional problems down the line. A lawyer can help navigate the fundraising step, providing insight on everything from voting rights to vesting schedules.
- Regulation and Compliance
Both the state in which you operate and the federal government have laws with regard to funding and issuing equity instruments/stock. One small mistake can lead to a world of trouble, not only for the people who’ve invested in your company, but you could actually go to jail. Avoiding this at all cost is best practices and something not to be ignored.
There are plenty other reasons which can be found just perusing online. The reality is, it’s much better to be safe than sorry, as the saying goes. Get yourself a lawyer to begin with; you’ll be happy you did once your company becomes a success.