When Should a Business Owner Consult with a Corporate Lawyer?
For anyone who runs a business, one of their greatest fears probably involves their business getting into a legal problem. This is because no matter how careful you are, there is always a possibility that one bad decision could create a legal problem for your business.
Getting involved in a lawsuit could potentially cost a business thousands of dollars and for small businesses there are plenty of other issues to worry about without throwing legal problems into the mix. How can a small business protect itself?
One way is to learn how to minimize corporate liability. The other, and most relevant, is to enlist the services of a corporate lawyer. A good business lawyer is one of the most essential assets to help a business through legal problems and lawsuits. The following article will discuss why and when you need a lawyer for your business.
Why Your Business Needs a Corporate Lawyer
The biggest reason your business needs an attorney is the fact that there are hundreds of laws that any commercial operation needs to be aware of and follow. Moreover, every industry has its own specific rules and regulations that need to be adhered to.
It is highly unlikely, therefore, that a typical business owner would be aware of all these laws. Additionally, apart from federal laws, your state, city and county laws can at time overlap or contradict each other.
As such, business laws rarely stay constant. This continuous evolution, albeit in small and subtle ways, means that your business can become non-compliant even if you have not changed your operations. These changes are usually done to accommodate the ever-changing market environment and economy.
Any owner will find it impossible to keep track of these changes and still handle their company. This is why a business lawyer is so essential. Their job is to keep up with changes in the legal environment. This ensures your business remains in compliance to avoid fines, penalties or even imprisonment.
Situations Where You Need a Business Lawyer
- Business Formation
During the inception of a business, you will absolutely need the legal counsel of a corporate lawyer as you determine the kind of business you want and why. A new business can be a sole proprietorship, a partnership or a corporation. Each of these has a unique structure as well as inherent tax implications.
As a result, it is prudent to have a business lawyer guide you through the process. You'll need them before you submit the paperwork for business formation to ensure your preferred structure meets both your short-term and long-term goals in addition to following the relevant laws.
When looking to get into a partnership with someone, your only hope is that they will act in good faith while honoring their fiduciary duties to the business.
Typically, to ensure both partners honor their obligations, savvy business people have a business lawyer draft a partnership agreement to be executed by both parties. The purpose of the agreement is to distinctly lay out each partner’s expectation of the other party. Additionally, the specific responsibilities and duties that each partner is supposed to carry out may be included in the agreement.
The importance of this agreement can not be overstated since you do not want to enter into a partnership with someone only to find out they are a fraud who abandons ship when things get tough.
Without the agreement, if one partner acts dishonestly, the other is left with no other option but to pursue litigation, which is likely to be very expensive. A corporate lawyer assists in minimizing the chances of this taking place.
- Disgruntled Employees
It is not uncommon for employees to sue their employers and the organizations they work for when they feel they have been harmed by the business. For instance, an employee may decide to claim they are working in a hostile work environment and decide to sue.
There are a host of other reasons which might make an employee feel frustrated enough to file a lawsuit against a business. One of the best ways of minimizing the possibility of an employee filing a lawsuit against you is through minimizing their level of dissatisfaction. This can be achieved by exercising proper performance management and inspiring leadership. Nevertheless, no matter what you do, some employees may decide to sue. This is why it is necessary to have a corporate attorney by your side giving you proper advice on how to handle this situation. Moreover, they will ensure you avoid practices that may create such problems.
- Breach of contract
When working with third parties, breaches of contracts may occur at any time. A breach of contract refers to a situation where the third party or the business does not honor the terms of their agreement. The third party may deliver inferior products or fail to deliver at all, while the business may fail to pay as expected.
When this happens, the next step is usually to initiate a costly litigation process in court in an attempt to sue for damages. The benefit of having a corporate lawyer is they can de-escalate the situation to ensure that does not happen.
Moreover, if your business is the victim, they will do all they can to get the business to pay what is owed. If they do not, the lawyer will know how to handle the situation in court, so that you get paid or minimize your liability.
Today, most business operations that usually needed an expert are being replaced by software. For example, there are apps and bots that can do the job of an accountant with ease. However, there is no technology that can replace a lawyer.
By having a corporate attorney at your side, your business will stay legally protected so that you minimize costly situations.
About the Author
Since 2002, Bryn Peterson has been delivering comprehensive legal support on a variety of corporate matters including contracts, mergers and acquisitions, real estate, insurance, risk management, capital projects, taxation and audits.
Bryn’s diverse legal background includes eight years as internal legal counsel for multimillion dollar corporations including Green Giant Fresh and Tree Top, and multibillion dollar corporation Darigold, Inc.
As internal legal counsel, he gained experience in a wide range of corporate legal needs, including managing outside counsel and associated costs. Bryn possesses the full range of qualifications to serve successfully in both in-house and contract capacities. His experience spans companies across varied sectors including technology, food/beverage and agriculture.
You can reach Bryn by phone at (206) 498-3354.