What to Ask: Incorporation and Business Operations | Ning Zhang, Esq.
Starting a new business? UpCounsel attorney Ning Zhang explains what every startup should be asking their legal team about incorporation and business operations2 min read
What is the best form of entity?
It depends on the nature of the business, the sources of financing and the stakeholders of the business.
Do I need any agreement for founders?
The answer is generally yes, and the legal costs here will save future disputes.
Shall I file IP protections?
Yes, and we generally suggest in various jurisdictions as well.
Do I need a legal counsel?
Yes, no business is the same and online forms can create many issues down in the road.
What I should do after setting up the entity?
Prepare template documents for business dealings upfront.
What is the best way a small business owner can protect personal wealth and assets from business risks?
Form the correct entity to shield legal risks.
What is the best way a small business can maximize its tax deductions? (Optional)
401K plan and thorough accounting for expenses
What specifically are small business owners most confused about when you first meet with them?
Why do they need an entity or how many entities are necessary
How can quality legal services help a small business grow?
To set up a framework and clean slate for future organic growth, financing or M&As.
How can quality legal services help small businesses save money?
It helps to reduce the cost later on in disputes with customers or vendors, business partners, or future investors or buyers.
How can small businesses maximize the value of their legal team’s services?
Have a to-do list and time table to set up the company properly, including various templates for its operation.
Should business partners have the same amount of equity in a company? Why or why not?
All depends on the contribution and future expectation.
What are the top three things a small business owner should be aware of when purchasing an existing business?
Due diligence reviewing customer lists, sale records, advertising materials, and employee contracts, Find out if there are any patents, copyrights, or trademarks associated with the business, Require the current owner to sign a “Not to Compete” contract
Do you have any other essential legal guidance for startups that you haven't already included in this survey?
I will suggest any high-tech start-ups to consider registering IP rights and setting up offshore entities upfront in other countries to preserve the opportunities outside of the U.S.