If you've always prided yourself on your ability to handle business situations independently, you may feel that you can take the same "DIY" approach to running your small business -- but that's a mistake. A variety of legal pitfalls await the unprepared, ill-advised entrepreneur. You'll want to make the acquaintance of an experienced business transaction attorney before your company runs into trouble, not after. Here are three ways business attorneys can help.
1. Strong, Favorably Written Contracts
Small business owners sometimes try to get away with makeshift formal contracts, or even no contracts at all. This is especially true for independent contractors performing very small jobs. It's all too easy to think that you're "covered" by a paper trail of email statements or a cobbled-together bid agreement. But the moment your relationship with that client turns sour or the payment fails to arrive, you'll wish you'd had a business transaction attorney craft the necessary formal contract.
It's true that email transactions, bid agreements and other relatively loosely-binding documents are allowable in court. But unless you're an attorney, there's little chance that you worded your terms and conditions with the tightness and precision necessary to protect your position. (You might even commit yourself to a legally-binding agreement by accident!) Business attorneys can prepare customized contracts that cover every possible contingency.
2. Protection of Your Intellectual Property
If you have intellectual property, do you know how to protect it from infringement -- or can you even be certain that it's been infringed in the first place? Copyrights, trademarks and other forms of protection can help keep other companies from stealing your content or copying your brand too closely. But the laws governing intellectual property can be tricky to interpret, so you need expert guidance from an attorney who specializes in this area. Potential issues may include:
- Copyrights - Even if you never formally filed for copyright on your intellectual property, an author who is also a business entity automatically retains copyright for life plus 75 years. But this is only true if you actually recorded the content in some permanent form or other, from a sound recording to a manuscript. If you didn't formally register the content with the U.S. Copyright Office, you'll have the extra burden of proving that you own or authored it -- which means you'll need an attorney.
- Trademarks - If you want to protect your brand name, logo, catchphrase or other brand-specific content, you must receive approval on an application for trademark. But many trademarks are rejected (or not enforced) on the grounds that they're too generic, offensive, descriptive, et cetera. A seasoned business attorney can help your evaluate your trademark's acceptability and submit the necessary paperwork for approval.
3. Sensible Business Structuring
Is your new business structured in a manner that will do the most good for you, both financially and legally? The small business owner is often beleaguered by the sheer variety of odd acronyms such as S-Corp, LLP, PC and LLC. Small business attorneys can cut through the jargon to point out the smartest business structure for your long-term needs and goals.
Many one-person businesses begin life as sole proprietors, and this may in fact be a perfectly reasonable choice for freelancers and other independent contractors. The biggest snag with this structure is that it throws your personal liability together with your business liability, which means you could lose both your business assets and personal assets in a lawsuit. Depending on how much your growing business has to lose, your attorney may recommend a corporate structure that keeps your business assets and personal assets separate. These structures may include:
- S-Corp - A small corporation structure in which you're taxed only on your personal income
- Partnership - A structure in which multiple participants share equal or varying degrees of personal liability, profit and responsibility
- Limited Liability Company (LLC) - A more formal partnership in which the members are protected against personal liability
The best time to shop for small business attorneys is before you urgently need them. Align yourself with a reputable practitioner now, and take a giant step forward in building a more secure and profitable enterprise!