Business Planning FAQs
I want to start a business, how can a lawyer help?
When starting any business, there are many decisions that you can make that will affect your liability, taxes, and other legal matters. Hiring the right attorney can help you in making these decisions such as choosing the right business entity and assisting with its formation, obtaining the right insurance, drafting a business plan, ensuring you are following all laws necessary to begin operations, and much more.
Which type of business entity is right for my business?
Choosing the right entity for your business is a critical decision and involves consideration of a variety of factors and will affect every aspect of your business from management structure and tax implications to even affecting what kind of funding you may be eligible to receive. Entity structures that are the most commonly used include:
- Limited liability company (LLC)
- Sole proprietorship
Consulting with a business attorney about your business needs, goals, and questions about which entity is right for you is highly recommended.
Should I form a corporation or an LLC?
Traditionally, a corporation’s primary benefit is that it provides the officers protection from personal liability for the corporation’s debts. However, one disadvantage is that the corporate officers would be subject to double taxation. First the corporation must pay taxes, then the officers must also pay taxes on the salary they draw from the corporation (unless the corporation is an S corporation).
A limited liability company (LLC) offers the simplified tax structure of a partnership with the liability protection of a corporation. Often, an LLC seems more attractive, however, there are potential management and control issues why a corporation could be a better option. Depending on your needs, an experienced business lawyer can advise you on the entity structure that is most suitable for your business.
What’s the value in taking the time to create a custom operating agreement?
Perhaps the most important document that will be created during the life of your business is the operating agreement. This internal legal document sets the foundation for how your business will function. This document can help you navigate every situation you may come across throughout the course of your business. Having no operating agreement or a poorly written operating agreement can be harmful to your business and increase your liability, thus increases your odds of spending time and money fighting a lawsuit.
When Should A Lawyer Review My Contracts?
Contracts are the foundation and the blueprint for many key components of your business, including its structure, your relationship with your employees, property owned by the business, and more. While it’s not required, it is highly advisable and recommended to hire independent counsel to review or draft your contracts and business agreements. Doing so can help mitigate risk, prevent future disputes, and get a fresh, experienced perspective on important legal matters.
For Legal Guidance Contact Our Attorneys
Our experienced attorneys at Holmes Way Schwab are here to answer any questions you may have that are unique to your business goals or industry.