First Person: Does Your Small Business Need a Lawyer?

Need a Lawyer



There are many times when every small business needs the assistance of a good corporate lawyer, including during its start-up phase and when it hires its first employee, must protect intellectual property or needs an ironclad contract.

Start Up

If your business will be a sole proprietorship, you may be able to get it off the ground without legal help, but if it will have a more complex structure, such as a partnership or corporation, you probably should hire a corporate lawyer to help you establish the business as a legal entity and, if necessary, prepare a partnership agreement or other legal documentation. Your lawyer also may be able to educate our about federal, state or local licensing or regulatory requirements that apply to your business.

Hire Employees

Another time when it is wise for your small business to seek legal advice from an experienced corporate lawyer is when it hires its first employee, since your company is subject to labor laws and regulations even before you conduct your first interview. For example, one of your first employment decisions will be whether to classify a worker as an independent contractor or a company employee, since this will affect how much tax you pay, whether you must withhold taxes from the employee’s income, how you report her income to the IRS, and how much control you have over her activities. IRS regulations set guidelines for designating employees as independent contractors and misclassifying one can be costly in taxes and penalties.

Also, employment applications can be a mine field for you as a small business owner if you aren’t familiar with labor laws that determine information you can and can’t request. Other employee-related areas subject to regulation include workplace safety, wages and hours, benefits, and employee discrimination and harassment.

Understanding federal and state employment laws before you hire your first employee can save you time and expense, so consulting a lawyer knowledgeable about labor laws may be a good financial decision.

Develop Intellectual Property

Your business’s intellectual property could include product designs, names, logos or trade secrets (the recipe for your trademark macadamia cupcakes with the secret ingredients only you know). If its intellectual property is so valuable to the business that unauthorized use of it by another business or individual could harm your company, then you should protect it legally and may need to consult with a business lawyer with expertise in this area.


At some point, your business may need to sign contracts with employees, partners, customers, or vendors or perhaps you will want to purchase another company and require a purchase contract to complete the transaction. Writing a contract yourself, even for transactions that seem straightforward and on which both parties agree, can be risky. A good corporate lawyer can prepare an agreement that takes into account the unexpected and protects your business’s interests in ways that you might not consider.

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About rianstefan

My practical approach based on experience is to create a website for real Internet users, not for search engine spiders.
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