What to Ask: Business Operations and Startups | Chris Clark, Esq.
UpCounsel attorney Chris Clark explains what every startup should be asking their legal team about business operations and startups3 min read
Are there any good reasons I should organize my business entity in a jurisdiction other than the one in which I am physically located?
It is essential that lawyers understand their clients' business objectives. For example, if a client intends to attract venture capital, or go public, or protect the privacy of the business's owners, or use their business entity for asset protection purposes, consideration should be given to organizing the business in a jurisdiction that will make it easier to accomplish those goals.
Are the names of my business and my products and services putting me at risk?
It is rare for business founders to legally clear the names of their business, products and services before launching their venture. Frequently this results in the business having to go through a costly rebranding process. It is essential for businesses to understand the legal landscape relative to the words and images they are using with their business.
How should I structure my relationship with my business partners?
Thoughtfully structuring and properly documenting the legal relationship among a business's owners may be the most important thing a business can do legally to avoid damaging internal disputes. Clearly delineating the rights, obligations and expectations of each partner is essential because it can identify any hidden misunderstandings and clear up confusion.
What are the best ways for me to protect the unique elements of my business?
A seasoned attorney can identify intangible business assets and recommend strategies for keeping them safe. Establishing a portfolio of patents, trademarks, copyrights and trade secrets can enhance value and give a competitive advantage in the marketplace.
What factors should I consider relative to the employees and/or contractors that work for my business?
Legal issues relating to employment are complicated. Contractors can often be reclassified as employees event if the business and the contractor have a written agreement to the contrary. Understanding the pitfalls associated with not properly managing your employees and contractors is essential to avoiding considerable legal and financial consequences.
What is the best way a small business owner can protect personal wealth and assets from business risks?
Develop a sound legal strategy using one or more appropriately chosen business entities and properly structure and implement it.
How educated do you find your small business owners are on legal topics when you first meet with them?
What specifically are small business owners most confused about when you first meet with them?
The risk associated with not properly clearing and protecting their brand(s).
What is the top reason people contact you for your services?
Business entity creation
How can quality legal services help a small business grow?
If your legal house is in order, it frees you up to focus on your business goals.
How can quality legal services help small businesses save money?
Properly structured legal documents may seem expensive to small businesses, but the cost is minimal compared to the financial burden of litigating a business dispute.
How can small businesses maximize the value of their legal team’s services?
Respond to the legal team's questions fully and accurately, ask lots of questions, follow the legal team's recommendations and ask the team to explain the risks and consequences associated with business decisions.
Should business partners have the same amount of equity in a company? Why or why not?
The answer to this question varies depending on each business's unique situation; it is not always advisable for business partners to all have an equal share of a company.
What are the top three things a small business owner should be aware of when purchasing an existing business?
Accurately determine the value, Determine why the business is for sale., Find out if there are any human resources issues or outstanding lawsuits pending against the company.
Do you have any other essential legal guidance for startups that you haven't already included in this survey?
Legal matters, like all business decisions, are all about risk and reward. Understanding the reasons why a business lawyer recommends certain courses of action and the potential consequences associated with not following their advice is the key to maximizing the value of your legal team