Reasons Why Start-up Needs a Lawyer

Starting a business requires a lot of organization and planning—asides from sourcing funds from private federal or state authorities. While you might need to get employees that will help run your business. It is equally important that you hire a lawyer to guide you through the legal intricacies of running a start-up.

They usually advise on the necessary documentation that the company must file with the government before the business is duly registered. In instances where a company or a start-up is not required to be registered, the lawyer will oversee the process of acquiring the requisite perm and licenses from the government and other regulatory bodies.

A business or a start-up can take different forms under law. The business form adopted by the founder will determine whether the company will assume the legal personality and whether the founder's liability will be limited or unlimited. The lawyer then advises the founder on the most appropriate business form. The business could be registered as a limited liability company (LLC), a corporation, a sole proprietorship, and a partnership.

A lawyer understands that a corporation is a legal person and is distinct from the founder. This means the corporation has the power to go about its activities separate from the founder's identity. Similarly, an LLC is a corporation with limited liability. This means that the founder will not be held responsible or liable for the company's activities.

As a registered company, your start-up has a corporate personality. This means that it can enter into contracts, sue, and get sued. So it is essential to have lawyers who review contracts and agreements to ensure that they are not contrary to the law.

Because the United States is a federation and different states have different laws regulating startup-ups and small businesses, it is essential that you ensure their no loopholes in your legal compliance. Lawyers go to the core of a start-up because they are key in the formation process. They play an essential role in registering the business with the appropriate government agencies and regulatory bodies.

Seeing that tax evasion is illegal, individuals and businesses must pay tax either to federal, state, or local authorities. When a business fails to file tax returns as they ought or in instances where they fail to pay a specific amount, they might enter into legal disputes with the Internal Revenue Service (IRS).

Therefore, it is important that you employ a start-up lawyer to acquaint you with the various tax obligations and responsibilities that you might have under the law. This is important because it helps you save valuable time and costs that might come from litigation and penalties from the IRS.

Further, a lawyer can play a very important role in helping a start-up organize its insurance liabilities. This is important because start-ups are prone to many insurance liabilities. For instance, if the start-up is into logistics, they might need to insure their automobiles and understand the rights and liabilities from such insurance.

Similarly, lawyers ensure that a start-up's products are adequately protected from competitors. For example, lawyers ensure that the company's intellectual property is adequately protected. When companies do not enforce mechanisms that protect their copies, trademarks, and inventions, they will be exploited by competitors.