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Before you start a business, get a lawyer and ask these 6 questions

Whether you’re opening a restaurant with your family or creating a tech startup with your friends, you’re going to face legal issues as you go into business. You’ll want to be prepared, and that’s why it’s so important to find a business attorney to consult with prior to starting up.  Finding a good attorney can be difficult, confusing, and even frustrating, but having a plan of questions can make choosing one easier. If you’ve never been in business, you might not even know where to begin.

Man working on business plan

How to find a business attorney

Start with your network. Ask friends and contacts who have a small business for referrals. In fact, ask anyone who has a lawyer of any kind because lawyers in other practice areas know one another. If you get a “No, that’s not my area,” ask if they can refer you to someone else. 

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If you don’t have any friends with attorneys, next try your state bar’s website. You can search by practice types. The website might also include search-certified lawyer referral services. These nonprofit organizations are not the same as those you might find with a search engine.

Try to find at least three to interview. Most lawyers will give you one free hour-long visit to see whether they’re a good fit. Try to meet with at least three and ask the questions below.

Six questions to ask an attorney before starting your business

What risks am I likely to face?

Every business faces risks from competitors, employees, contractors, suppliers, and business partners. Some of these are easy to anticipate. A restaurant needs to make sure it doesn’t make people sick for, example. The first step in avoiding a lawsuit is to understand potential vulnerabilities and avoiding or limiting them. An attorney may be aware of areas you haven’t even considered.

What form of business should I use?

This is often the first question people ask. Each type of business structure has different tax and legal liabilities. It’s a lot more complicated than you may have been taught in your middle school business class, though. There are sole proprietorships, general partnerships, limited partnerships, limited liability companies, and S corporations and C corporations. A lawyer can fill you in on the pros and cons of each and suggest which form is best. For example, limited liability companies and S corporations have similar liability but offer different management flexibility levels and have different tax and ownership requirements. Visit your attorney with potential owners to discuss different company types. 

Is my business name OK and how can I retain it? 

Your name is your identity, and while naming your business may not be as consequential as naming your children, it will be consequential in how people perceive your business. However, there are different restrictions on naming depending on your state and the company type. In choosing your name, you’ll first have to make sure your business name isn’t already in use. A lawyer can advise you on costs and the requirements you’ll need. As with other things, the requirements will vary depending on your business type.

You may also want to trademark your name. Your attorney will be able to guide you through trademark requirements as you choose your name.

As an important aside, be sure to check internet domain name availability when you name your business. 

What licenses will I need?

States, counties all have different business license requirements. You may also have to file a federal license, depending on your industry. These will vary with the form of business you’ve chosen. Some of the research you can do yourself, but an attorney will make sure you haven’t missed anything and can help you with more complex filings.

What contracts should I have?

In business, you might have co-owners, employees, contractors and freelancers, suppliers, and customers.  You may need one or more contracts with each of those. Not all businesses require contracts with customers, of course. Can you imagine having an agreement that your hairdresser had to give you a perfect haircut? 

On top of all this, you may reveal to some customers information about plans that haven’t yet come to market. You may need to create non-disclosure agreements to protect you from having your news spread to your competitors.

How can I protect my business’s intellectual property?

Not only could your competitors learn about your plans, but they could also steal things you’ve created. Your ideas have value and your ideas drive your business. This is particularly true in service industries, in software, and any time you’re creating something that hasn’t existed before. Your ideas are what give you an edge — or they may even the full focus of your business. Your attorney can help you protect your ideas, not only through acquiring patents, trademarks, and copyrights but also by showing what you need to maintain those patents and trademarks. 

Better safe than sorry

You may think you can handle much of this yourself, and you may be right. Still, it’s a good idea to have an attorney to make sure you haven’t overlooked anything and for any legal issues you may run into. Be sure to ask about fee structure, but don’t let that be your only criterion. Lawyers with low hourly rates can find ways to run up your bill, plus, not having a skilled attorney can cost you in the long run.

Finally, one last question to ask before you get your business is “Have I missed anything?” Your attorney will be able to point you in the right direction if there is anything you still need to take care of.

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