If you are thinking about starting a business, there are many things you need to know about the importance of hiring a lawyer.
Many entrepreneurs in Florida have exciting and innovative ideas for creating a new business venture or running a business, but they may not have experience choosing a business structure.
Also, they may not have experience handling day-to-day issues that impact a business, incorporating a business and obtaining licenses and other necessary documents, and managing other legal issues associated with a new company.
When you are considering a startup, you may be searching for information with terms like “lawyer for business startup.” The following are some reasons from articles in The Muse and Entrepreneur about why you might need a business lawyer for your startup.
Choosing Your Business Structure
When you are thinking about starting a new business, one of the first things you will need to do is decide on the best structure for your business. While you might be using the term “startup” to describe your business, as an article in Forbes makes clear, a “startup” is not a business structure.
Rather, “startup” is a term that is typically used to describe plans for starting a new business that is “working to solve a problem where the solution is not obvious and success is not guaranteed.”
Others might describe a startup business in terms of culture as opposed to business structure, in which you engage in “a culture and mentality of innovating on existing ideas to solve critical pain points,” or when people agree to go into business with you with the implicit acknowledgement that they will “forgo stability in exchange for the promise of tremendous growth and the excitement of making immediate impact.”
Accordingly, if you are thinking about a startup, you should begin working with a business lawyer to determine what type of business structure is best for you. The following are among the most common options for businesses:
- Sole proprietorship: This is the simplest type of business structure, and it is the most common for individuals who plan to go into business solo. If you are thinking about a startup and want to own the business yourself—and to hire employees who will not necessarily have a stake in the business—then a sole proprietorship usually is best. With a sole proprietorship, any expenses and income go through your personal tax return. For legal purposes, you and your business are, in effect, the same entity. This means you are responsible personally for any of the company’s liabilities.
- Partnership: You can choose between a general partnership where all partners have limited liability (an LLP) or a limited partnership (LP) in which a general partner has unlimited liability and all other partners have limited liability. This is a low-cost type of business structure that is relatively simple, and all profits and losses go through your personal tax return. Partnerships typically are best when two—or only a few—people want to go into business together.
- Corporation: There are a number of different types of corporations, including the common S-corp and the C-corp. Corporations are much more complicated than sole proprietorships or partnerships, and they cost more to create and to run. Corporations always are separate legal entities, which means that individuals are not personally accountable for the corporation’s liabilities (in most situations), and there is the possibility of higher rewards. Corporations also offer flexibility for companies that may grow substantially.
- Limited liability company (LLC): An LLC has some benefits of a corporation (liability protection) but without double taxation since earnings and losses pass through to the owners through individual income tax returns. LLCs are also relatively flexible and typically are best for businesses that are just starting out. LLCs can be especially popular for startups.
Managing Situations That Require Legal Counsel
In addition to choosing a business structure, there may be many legal issues that you have not yet even considered. The following kinds of legal issues may need attention when you are starting out with your startup:
- State and federal laws: There are numerous Florida state and federal laws that govern businesses in a variety of ways, including taxation. It is important to make sure that you engage in appropriate tax planning, and that you pay careful attention to the state and federal laws that may govern your startup.
- Managing risk: Whenever you create a startup that involves engagement with third parties (people beyond your business partners, such as employees or suppliers) and members of the public (such as customers), it is important to ensure that you know your rights and responsibilities under state and federal law. For example, you will need to be aware of rights and responsibilities under the Fair Labor Standards Act (FLSA), Title VII of the Civil Rights Act of 1964, and various other laws.
- Creating a business agreement: Whether you are forming a partnership and need to create a partnership agreement or need assistance with bylaws, it is important to work with a lawyer to ensure that you have methods in place for handling business disputes, unexpected situations, and the possibility of dissolution.
- Incorporation: If you need to incorporate your business, you will need help from a lawyer to ensure that you provide the necessary documentation for your startup.
- Employment contracts and hiring employees: When you hire employees, it is essential to understand an employer’s rights and responsibilities, as well as to understand the rights that employees have under state and federal law. We can help you to draft employment contracts, to develop an employee handbook, and to help you manage best practices for hiring.
- Business contracts: Developing enforceable business contracts with suppliers and other entities can be complicated, but a Florida business attorney can assist you.
Contact a Business Law Attorney in Florida
Are you thinking about options for a startup? It is extremely important to have an experienced Florida business law attorney to assist you from the early stages of your business.
Not only can a lawyer help you to choose the business structure that is best for your company, but a lawyer can also assist you with a wide variety of legal matters that can arise in many different types of startups. Contact BrewerLong today to learn more about the services we provide to startups in the area.