Business owners and professionals must think not only in terms of out-of-pocket costs but also in terms of opportunity costs. Hiring the right attorney will save you time, so you can work on growing your business. Additionally, that attorney can save you money by helping prevent legal errors, which take time and money to resolve and which may prevent growth later on. Below I describe five frequently overlooked reasons why you should retain legal counsel when you start a business or professional practice.
Entity Choice: Entity choice is deceivingly complicated: Although the basic attributes of entities like sole proprietorships, corporations, LLCs, and partnerships can be easily distinguished in terms of personal liability, taxes, and administrative maintenance, the devil is in the details and an uncertain future. How a C-Corps stacks up to S-Corps may depend on your exit strategy and can make a huge difference. Likewise, if you are thinking about using equity to incentivize other people, the different structures have vastly different consequences.
Corporate Documentation: Failure to maintain proper corporate documentation can enable creditors or others to pierce the corporate veil exposing you to personal liability. Even worse, if not done properly or on a timely basis, it can slow you down or prevent you from getting financing for your business.
Protecting Your Intellectual Property: Trademarks, patents, copyrights, and trade secrets are all intellectual property. Making sure that you understand what those items are and having plans in place to protect them will maximize the value and return of your business.
Infringing on a Competitor’s Intellectual Property: Similarly, avoiding infringement of a competitor’s intellectual property will keep you from getting bogged down in lawsuits.
Securities Laws: Simply put, this area of law is complicated and fraught with many pitfalls for the uninitiated. For example, if you think that a corporation with a sole shareholder wouldn’t need to consider filing to comply with securities laws, you may want to double check on that. Failure to do so on time and correctly can lead to big penalties.
Jason Putnam Gordon is the sole attorney at Putnam Gordon, P.C. His practice focuses on business and intellectual property law and is based in San Francisco, California.
The above is for general information and not legal advice for any specific individual. If you are interested in discussing the possibility of retaining Putnam Gordon, P.C. as legal counsel, please contact us as firstname.lastname@example.org. Our phone number is 415.986.7200. Additional information is available on our website at www.putnamgordon.com.