In the beginning, many small businesses are often reluctant to seek assistance, even in instances when that help is sorely needed. It may be the case that they don’t know what they don’t know and think they can handle the matter on their own, but more commonly, a fear of the potential expense prevents founders from seeking out advice and guidance, particularly when it comes to legal issues.
The truth is that those starting a business can’t afford to forego legal help on several crucial issues, and it’s a lesson that too many businesses learn too late. We’ve highlighted some crucial issues that need the attention of a lawyer, as well as how your business can afford that help even on a shoestring budget. (More on that later.)
Registering Your Business Name
One of the first steps any founder takes is to choose and formalize a name for the business. But the process is more involved than getting a URL; printing up some material; or even creating a sign or logo. For your business name to be afforded legal recognition and protection, you’ll have to go through one of several different processes to register your name with various levels of the government:
- Creating articles of incorporation or organization for your business entity may automatically register your business name with the state.
- If you have a name for the business entity but want to do business under a different name, you’ll need to register for a “doing business as” (dba) name with the state.
- If you are doing business in multiple states and wish to protect your business name on the federal level, with the potential to take legal action if needed, you can register your business name as a federal trademark with the U.S. Patent and Trademark Office (USPTO).
All the above means you must be sure that the name you’ve chosen is available in the first place, which includes doing a search. A lawyer can help with both the name search and the process of registering your business name both locally and federally.
Creating a Business Entity
Most savvy business owners quickly create an entity in order to protect their personal financial assets against potential corporate debts and obligations. And while forming and registering your business entity may seem like another thing that could be tackled yourself, the choices and resulting potential complexity may require the aid of a legal expert.
Creating a business entity means first choosing between every possible option: LLCs, partnerships, LLPs, and formation as C or S corporation. All differ in ways big and small, with one type likely working best for your business and its aims.
Without much knowledge or experience, you run the risk of making the wrong choice, and even if you do find the right entity, there’s paperwork that needs to be filled out correctly, lest a mistake end up causing your business issues down the line. And that’s without getting into the articles of incorporation or organization that need to be created for the entities.
You want to get these early-stage tasks right, and that means working with a lawyer to guide you through the process from the beginning.
It should come as no surprise to any founder that operating a business means dealing with contracts both internally and for external work. Yet many company owners aren’t even properly prepared with basic internal contracts to start and grow their business.
You want all contracts to protect you and your interests and to encompass all of the pertinent details and circumstances for that situation. Whether it’s partnership agreements, employment or contractor agreements, or your standard sales contracts, you can’t safely rely upon downloaded internet templates to keep you, or your business fully covered.
In addition to perhaps sourcing templates that are not for the right location or issues, you will not be considering any unique complexities that may apply to your business or industry. Likewise, the companies you work with for office space, equipment, materials, and everything else to run your business will have contracts for you to sign, and you would be doing your business a disservice by not understanding those contracts.
Getting a lawyer to look at contracts before you sign them and to craft custom contracts for your company is the best way to minimize issues with your signed agreements.
One often overlooked aspect of a small business is the company’s underlying intellectual property (IP). It’s not necessarily thought of in such terms, but your business is built upon the bedrock of an idea or ideas, and that makes up what is most of the value of the company.
Your idea or creation, combined with know-how and process as well as the acumen, customer lists, and branding, is your company’s intellectual property, and just as you’d protect the physical assets you’ve accumulated with security measures, your IP needs to be similarly protected.
Depending upon what it is, your IP can be safeguarded by copyright, trademark, and patent protections and by process around your trade secrets. It’s important to know the difference between these four types of IP, and it’s equally important to make sure you’re getting the appropriate protection for each.
It’s not enough to lock your inventions in a safe (although that may be a good measure); you need to register your patents or trademarks with the USPTO to protect them properly and also to take legal action against someone who might infringe upon your IP. In the case of copyrights, it’s not necessary to register with the USPTO to have a copyright, provided you’ve expressed the work in a fixed medium, although it’s necessary if you wish to go after someone who is copying that IP.
If you’re looking to protect your IP, you should talk with a lawyer to determine everything that needs to be protected and your next steps.
Getting Legal Help Doesn’t Have to be Hard or Expensive
Some businesses may try to skip the legal part of any of the above issues in hopes that they can get by without assistance in trying to tackle any of the legal steps or avoiding those things entirely. And while it’s understandable that some businesses may not want to spend money they don’t have, there’s a way to get legal help at an affordable price.
LegalShield’s Small Business Legal Plans include advice, consultation and document review with provider law firms in your state, and in most cases, you can speak with a lawyer the same day you sign up. Form your business with Launch by LegalShield—sign up today!
Pre-Paid Legal Services, Inc. (“PPLSI”) provides access to legal services offered by a network of provider law firms to PPLSI members through membership-based participation. Neither PPLSI nor its officers, employees or sales associates directly or indirectly provide legal services, representation, or advice. The information available in this blog is meant to provide general information and is not intended to provide legal advice, render an opinion, or provide any specific recommendations. The blog post is not a substitute for competent legal counsel from a licensed professional lawyer in the state or province where your legal issues exist and the reader is strongly encouraged to seek legal counsel for your specific legal matter. Information contained in the blog may be provided by authors who could be a third-party paid contributor. All information by authors is accepted in good faith, however, PPLSI makes no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of such information.