FEATURED QUESTION

How should I structure my entity?

Corporate form is essential for tax, liability and fundraising reasons.

 

 

How do I classify my workers?

Classifying workers in a compliant manner is a critical issue which implicates significant risks if not handled correctly.

 

How do I raise money?

Young companies need to consider the many ways, including outside investment, they can get seed capital to get started.

 

What is the best way a small business owner can protect personal wealth and assets from business risks?

There is no one way that works perfectly for all business owners, however, a combination of running the business through an optimal legal entity, coupled with prudent estate planning, should go a long way toward protecting personal wealth and assets from business risks.

What specifically are small business owners most confused about when you first meet with them?

Entity structure and how to treat a legal entity (like an LLC or corporation) as a separate entity with its own rules and codes of conduct.

How can quality legal services help a small business grow?

Strategic legal services can help avoid significant risk and also help guide a business owner through complicated matters that face a business early on. Quality legal services are essentially a map or guide through a risk minefield that a lawyer often knows better than a small business owner.

How can quality legal services help small businesses save money?

Quality legal services help small businesses save money by: a) avoiding risk which, if manifested, can be very costly; and b) save the business owner time, thus affording them more time to devote to the business. Time is indeed the most precious commodity a business owner often has.

How can small businesses maximize the value of their legal team’s services?

One way they can maximize the value of legal services is by educating themselves on alternative fee arrangements and other structures for compensating an attorney. In addition, hiring a good, pragmatic lawyer with a good business sense can save significant money. This is because a pragmatic lawyer can ask prudent questions which can help the business owner consider different ways of achieving a desired end. The more a lawyer understands the business owner's goals, the better they can advise the client on achieving those goals in a cost-efficient way. The best lawyers will often ask "why do you want to do this?", or "what do you seek to accomplish with this?" These questions can save the business owner money and time by inspiring them to contemplate the costs and benefits of a desired path.

Should business partners have the same amount of equity in a company? Why or why not?

Not necessarily. There are many factors that impact the answer to this question including: a) the amount of money each partner invested; b) expectations of control of the entity by each partner; c) the amount of "sweat equity" each partner intends to put into the company; d) the amount of risk each partner can tolerate; e) what the leadership position of each partner is, etc. Lastly, the issue of voting and decision-making is impacted when multiple partners have an ownership stake.

What are the top three things a small business owner should be aware of when purchasing an existing business?

Accurately determine the value, Due diligence reviewing customer lists, sale records, advertising materials, and employee contracts, 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?

Hire a lawyer. It is money well-spent. Every small company must face myriad legal issues. There is no way around it. A competent attorney who advises early stage companies can provide tremendous value.

 

Do you have any other essential legal guidance for startups that you haven't already included in this survey?

Hire a lawyer. It is money well-spent. Every small company must face myriad legal issues. There is no way around it. A competent attorney who advises early stage companies can provide tremendous value.