Small business owners should build a relationship with a local attorney and have someone they can call if a legal problem arises. The problem that a lot of small businesses face is that they don’t have the finances to hire a lawyer for all of their needs.
A lot of businesses need to pick and choose when it’s appropriate to hire a lawyer.
1. Large-Dollar Contracts
If you’re making a deal of a lifetime, you’ll need a lawyer to make sure that the contract you provide or must sign is legally sound. At the very least, you’ll want a lawyer to read through the contract for you.
But there are also basic contracts that can act as an alternative.
A few of the alternative options to hiring a lawyer for basic contracts are:
Always spend the time to read through the contract yourself and ensure that it’s legally sound. A basic contract template is often more than enough for most business transactions. You’ll need to consider:
- Contract termination
- Mediation and arbitration
- Attorney fees
- Local laws
Once you have a basic contract in place, you can often change a few parameters and not have to deal with a lawyer for every contractual need your business faces.
2. Your Business is Being Sued
Business lawsuits are very serious, and one lawsuit can cause your business to go under. A few of the many times that a lawsuit will arise, include:
- Slips and falls
- Personal injury
Even if your business is being investigated on a local or federal level, you’ll need legal representation that ensures your rights are upheld.
You can represent yourself if your business is being sued, but this is too risky. The wrong answer to a question can lead to your business being liable for tens of thousands or even hundreds of thousands of dollars in settlements.
Proper documentation, policies and training can help alleviate many threats of lawsuits, but there are always some risks of being sued.
3. Selling a Business
When negotiating your business’s sale or buying another business or assets, it’s important to hire an attorney who can help you better understand the sale. Selling or buying a business is a very serious endeavor, and the wrong step can make a contract null and void.
And you may be on the losing end of the contract, too.
Always hire a lawyer when selling a business. But if you have a buy-sell agreement in place with partners and are selling your interest in a business to your partner, you can do this on your own. Buy-sell agreements are rather standard contractual agreements, and you’ll be able to find many examples to follow online.
FindLaw covers buy-sell agreements perfectly and discusses your options as a business owner.
Issues SMBs Can Handle on Their Own
Legal consequences that most small business owners can handle on their own with some time and effort include:
- Creating operating agreements
- Applying for employer identification numbers
- Applying for licenses and permits
- Documenting required meetings
- Hiring employees
- Submitting forms to the IRS
- Writing a business plan
- Updating agreements
- Hiring contracts
- Creating contracts
Many businesses also turn to the Internet to have a professional company incorporate the business and get the ball rolling. This means that legal costs are kept to a minimum and the business owner is able to save a lot of money during the vital growth period of their business.
If you’re confused about an aspect of your business or how to handle a specific legal matter an attorney or an accountant can usually provide the guidance your business needs.