What to Ask: Incorporation and Hiring an Attorney | Senen Garcia, Esq.
Starting a new business? UpCounsel attorney Senen Garcia explains what every startup should be asking their legal team about incorporation and hiring an attorney3 min read
Do you have experience working with small businesses?
Small businesses should work with attorneys who understand their needs as a small business.
Do you work on flat rate fees or hourly rate fees?
This will help the small business owner when it comes to budgeting for legal services.
Can you review my business to see where I need legal protection?
Many small businesses have legal exposure and should have their business analyzed to reduce such exposure. This can include contract reviews, legal structure, etc.
Are you available provide assistance (for a fee of course) throughout the growth of my company?
Many small businesses need to ask advice and should have an attorney relatively available to them for such questions.
What other services do you provide besides helping small businesses?
Sometimes small business owners will additional services (such as estate planning) and it is to deal with the same person than having to vet another firm.
What is the best way a small business owner can protect personal wealth and assets from business risks?
Setup a legal entity before starting any business venture. The type of entity will depend largely on the circumstances but one should be established regardless.
What is the best way a small business can maximize its tax deductions?
Well, the best way is to meet with an attorney/accountant in advance of the year plan out the business to ensure their action reap the maximum tax benefits. Aside from such planning, it would be save all receipts and document all activity as many small businesses lose deductions simply from lack of documentation.
What specifically are small business owners most confused about when you first meet with them?
Setting up a legal structure and drafting/reviewing contracts
How can quality legal services help a small business grow?
By ensuring the business is structured properly so that as many issues are anticipated and dealt with immediately to reduce liability down the road.
How can quality legal services help small businesses save money?
Many times, businesses take the approach of dealing with the legal issues later to save money and will deal with it later. Often times, this "savings" is lost when lawsuits erupt due to not taking the time to dealing with the legal issues at the beginning. Having legal services would reduce the liability exposure saving small businesses money and heartache in the future.
How can small businesses maximize the value of their legal team’s services?
The best to maximize the value is to be open and honest with their legal team and work with their legal team to ensure the legal's recommendations are implemented.
Should business partners have the same amount of equity in a company? Why or why not?
That ultimately depends on the circumstances. However, if a situation occurs where there is the same amount of equity in a company, I usually recommend the company require mediation or arbitration in cases of stalemates. Although, it adds to the costs, this will reduce the likelihood of litigation and the effect the day to day operations should be minimal.
What are the top three things a small business owner should be aware of when purchasing an existing business?
Accurately determine the value, Require the current owner to sign a “Not to Compete” contract, Determining liability overall whether it be from tax liability to potential lawsuits.
Do you have any other essential legal guidance for startups that you haven't already included in this survey?
Yes, get everything in writing. Far too often, small business owners rely on hand shake agreements and then find themselves with very little to protect themselves.