Starting a business can be daunting, especially considering all the complexities surrounding taxes, intellectual property, partnership agreements, and more. At the beginning of a company, the founding members are usually focused solely on bringing their product or service to market. While this approach is important, it is also wise to focus on long-term strategy and protect yourself from adverse legal actions or consequences. Here are three ways hiring a business attorney early can help safeguard the future of your startup.
1. Establish the best legal entity
When you are setting up your corporation, an attorney will guide you through the various legal entity options, including incorporation. Incorporating your business separates your personal finances from your business and protects you from personally assuming liability for business debts. An experienced business attorney will advise you on whether to set up as a sole proprietorship, a limited liability corporation, or a limited liability company. An attorney will help you choose the entity that is best for you in the long run, so you don’t have to change it in the future and incur additional hassle and expense. Discussing your specific situation with a legal expert will allow you to assess your finances and future goals and help you make the right decision about incorporating.
2. Protection of vital intellectual property
Establishing security measures to protect your intellectual property is imperative to the success of your business. Intellectual property is generally defined as unique items created by you that will provide a financial benefit. Intellectual property includes trademarks, copyrights and patents on your original works, designs and inventions. An attorney will help you establish the proper intellectual property security so you can avoid costly litigation in the future. For example, you can protect your logo or brand by having your business attorney register them as trademarks with the U.S. Patent and Trademark Office. Also, if a competitor copies your logo or brand, your legal counsel can send a letter cease and desist policy and immediately stop any further damage to your trademark. Cutting corners on intellectual property at the start of your business and not getting the right protection could do irreparable damage to your brand down the road.
3. Review of complex legal documents
Starting a business usually involves dealing with large amounts of paperwork. Having an attorney work with you at the start-up phase helps ensure that all documents, both created and received by you, are correct and ensures that all of your interests are covered. Typical documents dealt with in the initial phases are contracts, insurance policies and partnership agreements. A partnership agreement can be particularly important when addressing common issues among startup founders, such as division of responsibilities, stock splits, and profit sharing. Although there are many generic business contracts on the Internet, an advocate focused on your circumstances will ensure that the documents you use provide the unique protections necessary for your specific situation.
You may have started with an amazing idea and a great chance of success, but without the right advice, your startup could be on a straight course of stress and onerous expense. Consulting with an experienced business attorney will help secure your business and prevent costly litigation in the future.
