Why You Should Retain a Lawyer for Your Startup Business

Starting a business can be an exciting time for an enthusiastic entrepreneur, but it is also often a time of financial difficulty and uncertainty.  A startup business may be looking to minimize its initial expenses. In this article, I am going to explain why retaining a lawyer to help with your startup is not an expense you should spare.

Regulatory Compliance

North America is not a true free market.  There is a spiderweb of regulation that one must navigate in order to operate a business in compliance with the law.  This can be as simple as getting a business license, and as complex as a multi-year application process with the federal government.  Your lawyer can assist you in determining which regulation may apply to your business model, and help you to stay in compliance therewith.

The consequences of not complying with the regulations that may apply to your startup business can range from prohibition of operation, financial penalties or criminal offences.  Therefore, it is imperative that you seek advice from your lawyer on how to get, and stay, in compliance.

Branding

This is an area that a lawyer practicing in trademark law, such as I do, will be an invaluable asset.  If you start a business only to find out two years down the road that your business or product name infringes on another business’s trademark, you will be in serious financial and business trouble.  This could have been prevented by consulting with your lawyer about pre-searching potential trademarks, and being advised to stay clear of trademarks that are too similar to existing businesses.  Every startup is well advised to seek trademark protection for its business name and/or product name from the outset.  Failing to do so can result in litigation, loss of goodwill and costly rebranding.

Business Structure

Are you going to operate as a sole proprietor? Corporation? Partnership?  There are advantages and disadvantages of each, and your lawyer can advise you which type of business structure suits your needs.  If you choose to incorporate, your lawyer can assist you in registering the corporation with the regulatory authorities, and provide advice on how to internally structure the corporation.

The consequences of not properly planning your business structure could result in unnecessary exposure of your personal assets to liability, unintended tax consequences, or regulatory non-compliance, among many others.

Initial Agreements

Every startup business will need some initial agreements drafted or reviewed.  Some examples of documents that lawyers typically review for startups may include a lease for office space, software contracts, website development agreements or employment agreements. 

When you are selling goods and services to the public you will also need the advice and direction of your lawyer to determine the terms upon which those goods and services are sold to your customers.

The consequences of not properly vetting your initial agreements can be dire to the success of your business as you may be agreeing to things that are outside of the norm, or selling your goods or services on terms that are unfavourable to you.  Your lawyer can provide valuable advice and experience in this regard.

 Experience and Mentorship

Starting a business can be a daunting task for the uninitiated, and an individual may often find themselves unsure of how to proceed.  Any business lawyer worth retaining will be able to provide you with his or her years of experience, as well as mentorship and guidance, and help you navigate the common pitfalls associated with startups.  In my opinion, a lawyer is the best choice for a startup to use as a mentor, at least in respect of business operations.  Your lawyer will also be able to advise you of the other professionals you should hire to make your business a success.

Conclusions

Starting a business can be a very rewarding experience for an entrepreneur, but it is not without its complexity and risk.  Retaining a business lawyer to assist you will ensure that your business starts on the best footing and minimizes risk.