At a recent Alexandria Small Business Roundtable, business owners discussed whether they needed an attorney for their business. All businesses must deal with some legal issues when they get started including the first step of registering and licensing their business. Determining which business structure (sole proprietorship, LLC, S-Corp, etc.) will work best for your business is a question that involves issues of liability and taxation.
There is some legal advice on the internet regarding these different business structures (www.nolo.com and www.bos.virginia.gov are among the best), but each business owners’ circumstances and desires are unique. It is always recommended that you have a consultation with an attorney to pick the structure that is right for you. If after this consultation you determine that a sole proprietorship will work for you, the business license is something that you can file for yourself.
Likewise, if a simple LLC will be your structure, you can file the paperwork, whether through an attorney, directly with the State Corporation Commission, or through the Virginia One-Stop website (www.bos.virginia.gov). If you will be structured as a more complicated LLC (several persons being members) or some form of corporation, it is always recommended that you work with an attorney to get set up correctly. Things like by-laws for a corporation or Operating Agreement for a LLC should also be reviewed by an attorney.
There are other areas where the consulting services of a small business attorney are recommended. Often, people come in to see us at the SBDC because their landlord has invoked some clause in their lease that they feel will hurt their business. If an attorney had reviewed the lease and explained important provisions to them before they signed it, they would be less likely to be surprised by “hidden clauses”.
Likewise, if a business owner is hiring employees, he or she may want to review Human Resources laws and regulations with an attorney or HR professional to be sure that they are complying with all federal, state and local requirements in hiring. Depending on the type of business, there may be contracts with vendors or customers that should be completely explained and understood before they are signed by the business owner.
If you have a relationship with a small business attorney because they have helped you to get set up, lease space, develop contracts, or hire employees, you have a business partner who is engaged in your business. While there will be some cost involved in this relationship, you need to consider that the price for peace of mind. Over the life of your business, there are always things that can happen that will put you in “crisis mode” – someone falls in your shop, claims to get sick from your food, an employee files a complaint, etc. Whether these issues have merit or not, business owners must deal with them.
Having an attorney who already knows you and your business can go a long way to furthering your success. It will also make sense financially, since you will not be paying someone to come up to speed at the higher “emergency or representation” rates or fees, rather than the generally lower fees for consulting services. “Pay a little bit now, or a lot later” is something to keep in mind.
The Alexandria SBDC has a referral list of local attorneys that our clients have used and liked. We do not put anyone on the list unless we have seen how they operate and we are comfortable with them. All of the attorneys on our list have also agreed to offer a brief free “parameter setting” consultation.
You may wish to interview a few attorneys to find one that fits both the needs of your business and your comfort level in terms of personality and cost. Do not be afraid to ask questions about specialty areas and cost – your attorney expects these questions and should be eager to respond to them. If you establish and grow this relationship with your small business attorney, you have a partner for the life of your business.