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The value of having a lawyer when starting a business

On Behalf of | May 10, 2023 | Business Law

What occurs during the earliest stages of starting a business will affect the company’s solvency and success for years to come. It is relatively common for those considering a new business venture to try to manage the process on their own without any legal support. They tell themselves that because business formation usually involves filling out certain paperwork and filing documents with the state that anyone can do it.

However, entrepreneurs and investors that try to handle business formation without support can make major mistakes that end up having financial consequences for the resulting organization. Bringing in a lawyer to assist with business formation as beneficial for numerous reasons that are very difficult or entrepreneurs and executives to ignore.

A lawyer can provide early guidance

There are many decisions early in the business development process that will have a major impact on the success of the organization and the risks involved for the executives and investors. A lawyer can provide guidance about the regulations and licensing requirements that may apply to a business concept and can also give advice about insurance and liability concerns. Beyond that, a lawyer can also help develop the actual business plan and help entrepreneurs choose the right business entity given their intentions for the company.

A lawyer can create bespoke contracts

Contracts are one of the most important forms of protection for a company, and thorough, highly-specific contracts tend to provide better protection than boilerplate documents that people can download from the internet. Having custom contracts for everything from vendor agreements to new hires for the company can diminish an organization’s operational risk and make it easier to control both operating costs and public perception of the company.

An attorney can serve as a stand-in negotiator

Whether there’s a need to negotiate with the former employee about severance or with a supplier about delayed deliveries, having a lawyer handle negotiations related to conflicts can both impress the seriousness of the situation on the other party and provide a buffer between the management at the company and those embroiled in the conflict.

When lawyers handle disputes on behalf of an organization, it may be easier in the long run to preserve working relationships even after a dispute arises. As a final note, an attorney assisting in the business startup process can warn people about the common mistakes and oversights committed by those starting specific types of companies.

Having sufficient legal guidance when starting a new business can help to decrease the risks involved in the process.