One of the most perplexing problems that any business owner faces is thinking, “I know I need a lawyer, but I’m not sure which lawyers I need.” Knowing what your legal needs are, like so many other parts of being a business, is like hiking a mountain without a map. Alternatively, you might use a compass. (I’ve literally done this, and it’s not something I suggest.)
Are you a corporation, a partnership, or a sole proprietorship? What kind of person should you be?
But first and foremost, you must determine what form of corporate entity you have – and what type you should have. This is the foundation of the first and most basic type of business law, which deals with the formation and governance of businesses.
Is your company a limited-liability corporation (LLC)? Or one of the two most common sorts of corporations, a C-corporation or an S-corporation?
If you answered “none of the above,” then put down your #2 pencil and stop right now — and read about why having an entity for your business is so crucial.)
How do you know if the entity you created for business is the proper one? There, we’ve got you covered.
If you’re certain you’ve chosen the suitable entity type for your company, the next step is to determine if you have the appropriate governance documents in place. Do you have an operating agreement if you have an LLC? Do you have bylaws if you’re a C-corporation or an S-corporation? These documents are important because they spell out who is in charge, how decisions are made, how votes are cast, and how the pie is shared. (I’m a sucker for pie.)
The five sorts of laws that have a significant impact on small businesses
There are many different sorts of laws. Almost every aspect of life is governed by some form of legislation. But, fortunately for you, most SMBs only need to be aware of a few categories of business law:
(1) Company establishment and governance – Completed! As already said. Furthermore, if you want to sell your firm or if you and your business partners wish to split ways, this area becomes quite significant.
(3) Employment law – Think of it as the dull cousin of contract law. It’s tedious, but it’s a necessary task. Although employment law may appear to be a snoozer, ensuring that you look after your employees — while also ensuring that no one takes advantage of you — is another crucial area for your company.
(4) Intellectual property law – Intellectual property (IP) may appear to be something that only IT businesses deal with, but this is a common misconception. IP addresses are given to everyone. Even if you never register any of your IP with the government, you must secure your customer lists, innovative product or service ideas, and internal company practices. There’s also your personal brand to consider. Almost every company should think about trademarking their logo.
Consider registering a copyright for your code if you have an app or a custom-built website. Even if your business isn’t high-tech, a design patent may be perfect for you if you have a unique design. While patents may appear to be costly — and they are at many other law firms — there are cost-effective options.
(5) Regulatory law – Do you require a company license to operate? Even if it merely entails registering with your state, the answer is almost usually yes. Then, if you do enough business in another state, you must register in that state as well. In addition, depending on your industry, you may require additional licenses.
Those are the important ones to be aware of. There are lots more, such as litigation, which you should try to avoid.
What about company legislation that is specific to your industry or vertical? I’m glad you inquired!
For your company’s legal needs
There are some sorts of business legislation that are only applicable to certain types of businesses. If any of these apply to you, you should look for a law firm that specializes in that area. Here are a few to think about:
Do you generate video, photo, audio, live performance, or written work for which you are compensated? As an influencer, do you get paid? Or do you have a big enough following that brands would pay you to engage with them? Then you’re immersed in a world of rights, licenses, and royalties, all of which mix intellectual property and contract law. Also, any lawyers you choose should be familiar with the industry and the kind of deals that are conceivable.
That’s it, we’ve reached the peak of the mountain! The good news is that we’ve already covered 90% of the business law concerns you’ll come into. And the correct company legal firm can assist you with the most, if not all, of these issues, so you won’t have to deal with them on your own.
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