When you start a business, there is so much to think of. The first things that come to mind are probably finding a place to open your business, getting inventory, advertising your business, etc. You’ll likely have an accountant on your team to do your books for you, and an IT person to set up y our computers. But you may not have considered hiring a lawyer to help you set up your business. Do you really need one? The truth is, there’s no one right answer to this question. Let’s examine the issue a little more closely, so you can see both sides.
To start, the need for an attorney when starting a business depends largely on the type of business you are looking to start. This refers not to the industry or niche in which your business falls, but rather the legal type of business you are starting. If your business is a sole proprietorship, you won’t likely need an attorney to start the business. The only paperwork you’ll need to file will be to apply for your business license, which you can do without the assistance of a lawyer.
If your business is a legal partnership, or Pty Ltd, you will be required in most jurisdictions to register your business, a process that can be tricky if you don’t know what you’re doing. In addition, you’ll need to draft a partnership agreement to outline the structure of the business, ownership, compensation, and other complicated matters. In these situations, it is probably a good idea to hire an attorney to help. Corporations have a very complicated infrastructure and it is highly advised that those organizations seek the services of a lawyer during their start-up phase to avoid issues down the road.
Startup expert Shaun McGowan from Lend says, “If the business is borrowing money from a shareholder or family member seek legal advice to draw up a loan agreement. This will defend against misunderstanding and define repayment terms or interest. Do this before any money is invested”.
There are other reasons to hire a lawyer to help you start your business. Although hiring a lawyer is an additional cost to consider in your start-up budget, if your business does not have the correct legal and governance setup you could be vulnerable to paying a lot more than your lawyer’s fees if you get into a legal battle. A lawyer will ensure your start-up is in accordance with the relevant laws. They’ll help you navigate challenging and complex legal channels that you’ll have to take to register and set up your business, leaving you to focus on other aspects of your business.
In addition to setting up and registering your business, a qualified corporate attorney can also perform a variety of other tasks. A lawyer can help you to secure a patent for your product, trademark your name, logo, etc., review any leasing or rental agreements to ensure they are in your best interest, to name a few. Although it can be tempting to simply download an online form to accomplish some of these tasks, that’s not always the best way to go. Legal matters are complex, and a one-size-fits-all approach is rarely in a business’ best interest. For a truly custom, thorough approach, it’s best to hire a lawyer.