Starting your own business is a wonderful experience. Entrepreneurs feel a lot of excitement, anticipation, and sometimes anxiety as they prepare to launch a new idea, product, or service. As you start your journey, consider these 5 questions to ask your lawyer before starting a business.
5 Questions to Ask your Lawyer Before Starting a Business
You never know when the answers to the simplest questions could help prevent complex issues from arising later. Consider asking your business or corporate lawyer these questions:
- Should I form a corporate entity, and if so, which one?
Together, you and your lawyer will review corporate entities and will select the form that is right for you and your business. The most common forms of entity are:
- Sole Proprietorship: Very few legal requirements, but you maintain full liability.
- Partnership: If you and someone else (friend, business associate, spouse, child, etc.) decide to enter into business together, and share the liability.
- Corporation: A corporation requires extensive (and sometimes expensive) documentation, record-keeping, board of directors, and compliance.
- Limited Liability Company: The most common entity, the LLC limits liability while offering many of the advantages of a standard corporation.
- Do I have the correct business license or permits?
This is an important step in starting a business, and requires business owners, especially those working out of a brick-and-mortar location, to consider local, state, and federal licenses or permits. You and your attorney should explore:
- Local: County or city permits may be required. Contact your Chamber of Commerce to find out the specific requirements for your business.
- State: To find out what state licenses or permits are required, contact the Secretary of State’s office, or the Small Business Administration (SBA).
- Federal: The SBA is also the starting point to find out what sort of federal guidelines there may be for your business and licenses or permits.
- How do I obtain funding?
When it comes to financing your business, always consult your lawyer before agreeing to any sort of contract or financing agreement. You may have several legitimate options for funding, such as:
- Friends and family
- Crowd funding (KickStarter, GoFundMe, etc).
- Angel or venture capital
- SBA grants or loans
- How do I grow with my business?
Founder’s disease is a real problem in the business world. Many people start a business but do not obtain the proper skill set or support to grow along with the business. You should be open to guidance from your attorney, board of directors, accountant, or mentors about how businesses grow and evolve. Remember the following tips as you grow:
- Create a routine that works for you
- Identify and eliminate bad habits
- Leave your comfort zone
- Be creative and ambitious, but reasonable
- Do I have what it takes?
Your lawyer may answer this question in more ways than one. Do you physically, mentally, financially have what it takes? Some of these elements are easier to pinpoint on paper than others. Still, it is an important question to ask. Business and corporate law attorneys have years of training and experience in helping entrepreneurs get started. They can often offer insight where other parties may fail.