“I’m planning on starting my own business, and money is going to be tight at first. What is the minimum amount of legal involvement I’ll need, when I’m just starting out?”
– Greg W.
Sponsored Content
Hey Greg,
Thanks so much for writing in. Great question. I’ll start by applauding you for taking the leap into entrepreneurship. Owning your own business can be a tremendously rewarding, and fulfilling endeavor. You certainly aren’t alone in operating within a tight budget as you first start out. As a result, it is not uncommon for business owners to want to skimp on attorney involvement. The assumption is that because they are just starting out, legal issues they might face will be minimal. And usually, that is a safe assumption.
However, while it is unlikely you will find yourself in legal trouble right out of the gate, that does not mean you shouldn’t involve an attorney. In reality, I would encourage any new business owner to set aside funds to cover legal aide as a standard part of establishing any new business.
Involving an attorney upfront will ensure that your business is set up correctly. It will also help to keep you and your assets protected, should you ever face legal issues down the road. Having your business set up correctly will also give you peace of mind, which will be critical as you move into this next phase of your life. Owning and operating a business is not an easy job. Stress and anxiety tend to come with the territory. Anything that you can do to minimize the number of stressors that come with owning a business, would be to your advantage.
To answer your question a little more directly, I would say the minimum amount of attorney involvement would be in how you register the business. Whenever you register a new business with the government, you have various options as to the type of business it will be. Whether you establish a sole proprietorship, an LLC, a partnership or a corporation, each business type has stipulations that any business owner needs to know.
A good attorney will be able to explain how each of these different business types will affect you, and allow you to make a more informed decision about which direction you should go. Each option will have different tax implications, and will mean different things regarding how your personal property is handled.
For example, let’s say that you decide that you set your business up as a sole proprietorship. When you set your business up as a sole proprietorship, any asset that you own that is also under your name, is now vulnerable. In other words, if the title of your house, or your car are also under your name, the filer of a lawsuit against you could come after those assets.
Having an attorney involved as you set up your business can help you avoid these scenarios. They can help protect your assets from being taken. They can help you avoid future lawsuits. And they can help you go into any business transaction knowing you are legally protected, should things go south.
Just to be thorough, let me tell you about some situations that I’ve seen as an attorney. It is not at all uncommon for me to have clients who avoided involving at attorney from the beginning. They will often register their business through popular online sites, and assume that they are then protected. Unfortunately, that is rarely the case. Every industry and every business is a little bit different. Each industry has its own set of standards and courses of conduct that can have deep implications over an improperly established business. Too often have I seen clients face bankruptcies, lost homes, and lost businesses due to completely avoidable scenarios such as mis-titled assets or overly vague legal documentation.
At the end of the day, my advice to any new business owner is to avoid taking the leap too soon. Before you ever start a business, you want to ensure you have enough margin & capital built in to at least hire a good attorney and a good accountant. While it is not my intention to rain on anybody’s parade, if you are unable to set aside enough funds to pay for an attorney and an accountant, then you may want to question if you are truly ready to start a business. Starting a business is not something that should be entered lightly, and my primary goal is to see anybody who decides to do so, succeed. The success of any business is directly related to the team that a business owner surrounds themself with. It has been my personal experience that a good attorney and a good accountant are essential parts of that team.
If you have any questions at all, or need further assistance in establishing a new business, we always encourage you to call our law firm, and we’d be happy to talk through it with you. We offer a free 30 minute consultation, and would love to talk to you about your new business.
Our Clearfeld office can be reached at 814-765-9611, and our DuBois office can be reached at 814-299-7697. As always, you can visit us online at www.clfdlaw.com or check us out on Facebook at facebook.com/clfdlaw
If you have a question that you would like us to answer in our next column, please send your questions to info@clfdlaw.com.
The document(s) and video(s) you are about to view are general documents specific to Pennsylvania Law and are provided for your review only (“WebProd”). An attorney client relationship does not exist between yourself and The Cummings Law Firm, LLC because of the WebProd. No attorney client privilege exists between yourself and The Cummings Law Firm, LLC because of the WebProd. No work product privilege exists because of your use or reliance upon any WebProd. All WebProds are incomplete and The Cummings Law Firm, LLC or another Pennsylvania-based law firm should be contacted and professional legal advice should be provided prior to your use or reliance upon any WebProds. Additionally, The Cummings Law Firm, LLC should be contacted, and professional legal advice should be provided to you prior to your use or reliance upon all WebProds even if you are an existing client or you have been a client of The Cummings Law Firm, LLC in the past.
The Cummings Law Firm, LLC providing these free WebProds for your review is not a substitute for the advice of an attorney. No WebProd can provide legal advice. Only attorneys licensed in the Commonwealth of Pennsylvania can provide legal advice relating to these WebProds. The Cummings Law Firm, LLC is available to take your call, to schedule a conference and to assist you with advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies. This site is not intended to create an attorney-client relationship. Although your review of all WebProds is free of charge, you will be required to execute a fee agreement which you and an attorney will agree upon how you will be charged for legal services if you seek legal advice regarding the WebProds.
The Cummings Law Firm, LLC does not warrant in any way the validity, correctness, applicability, etc. of any WebProd. Lawsuits may be filed against you if you use or rely upon any WebProd. You must contact and pay an attorney to represent you if you are sued or if you sue based upon the WebProd. Otherwise, you are representing yourself in any legal matter you undertake through use or reliance upon any WebProd.
Without signing a fee agreement letter, also signed by an attorney, no communication with you is protected by the attorney-client privilege or work product doctrine. This is only an online legal portal to give visitors a general understanding of the law, as well as to provide an automated software solution to individuals who choose to review their own potential documents. To that extent, the site publishes general information on legal issues commonly encountered.
Unless you sign a fee agreement letter, also signed by an attorney, at no time do we review your WebProds or WebProd answers for legal sufficiency, draw legal conclusions, provide legal advice or apply the law to the facts of your particular situation. WebProds are not a substitute for the advice of an attorney. Reliance upon WebProds without advice from an attorney is unreasonable.
Although we take every reasonable effort to ensure that the information on our website and documents are up-to-date and legally sufficient, the legal information on this site is not legal advice and is not guaranteed to be correct, complete or up-to-date. Because the law changes rapidly, is different from jurisdiction to jurisdiction, and is also subject to varying interpretations by different courts and certain government and administrative bodies, we cannot guarantee that all the information on the site is completely current. The law is a personal matter, and no general information or legal tool like the kind we provide can fit every circumstance. Therefore, if you need legal advice for your specific problem, or if your specific problem is too complex to be addressed by our WebProds, you should consult an attorney licensed to practice law in the Commonwealth of Pennsylvania.
We are not responsible for any loss, injury, claim, liability, or damage related to your use of this site or any site linked to this site, whether from errors or omissions in the content of our site or any other linked sites, from the site being down or from any other use of the site. In short, your use of the site, its content, any WebProds, or summary videos is at your own risk.
