For very many small business owners out there, using a lawyer is the same as calling a plumber or fireman. One does it only if there’s a problem.
Mostly for new startups and businesses, needs such as sales, marketing, staffing and just getting the business off the ground takes priority over other legal issues, particularly issues that do not seem to be of immediate concern. They tend to forget that smart business planning also involves preventing problems and making sure that the business is protected against any potential trouble.
Intellectual Property Rights.
Many assets of a business that are intangible should be legally protected. The company’s logo, brand name and all the distinctive goods and services are all entitled to copyright protection. Semiconductor chip mask designs, proprietary computer software, vessel hull designs, and all other creations may be eligible for trademark registration. People often think that patents cover only machines and other manufactured products, but they can also be used to protect processes, such as a new method for refining crude oil, or new compositions of matter, such as mixtures or chemical compounds. Copyright, trademark, patent, and copyright registrations can also help a business to protect the things that give the business a competitive advantage in the market.
While a majority of corporations will make use of an attorney to help out with the process of incorporation. New businesses at times neglect the on-going legal requirements to maintain their corporate status. Directors, annual shareholder and partner meetings, need to be held, and the recording of minutes and election of any officers must conform with the state requirements. Failure to do this could jeopardize the corporate status and result in “piercing the corporate veil” in the event of a legal action or a lawsuit, thus exposing the corporate officers to legal problems or personal liability.
Most companies, especially companies that deal in technology products and services, count the knowledge that the employees have as one of their most important assets. Yet some of them fail to protect those assets through lacking a non-disclosure agreement with their employees. Unfortunately, some employees will have to leave the company, and it’s very important to protect your business against them taking the knowledge they have acquired and trading it with your competition.
Many entrepreneurs are sometimes very focused on starting new businesses that they do not consider what will happen if one of the principals leaves the business. When a major shareholder or partner decides to suddenly exit the business, it can potentially threaten the ability of the new business to continue operating. Corporations closely held need to have buyback agreements or buy-sell agreements to ensure that the partners or major shareholders can sell their interest without causing legal entanglements or placing a financial burden on the company.
What is the cost of hiring a lawyer to deal with all these issues?. There are no cheap good lawyers, but then again, neither is any other consultant very important to your business. A consultation with a lawyer can determine what a company’s legal needs are. An investment in a lawyer’s time, like a medical checkup or a fire code inspection, can help prevent major problems in your business.