It costs money to hire a good business lawyer, which is why many small and medium sized companies do not avail themselves of professional legal help unless faced with a lawsuit.
However, hiring Perry Bundy Law, a Monroe NC lawyer from the start can help a business avoid having to face legal action in the first place. The following are some ways in which a good business lawyer can provide valuable assistance to a small business.
You should consult with an attorney prior to starting your business. Many business owners are able to fill out the forms provided by the North Carolina Secretary of State to start a business without an attorney, but you need an attorney to explain what types of documents and steps are necessary to allow your business to stand up in a court of law. Most people decide to start a company and go to the NC Secretary of State website and choose an entity that their friends mentioned. There are various reasons why one business entity would be better for you than another. You should consult an accountant to choose the best entity for tax purposes. Business owners desire to avoid personal liability in case something goes wrong with the business. An attorney can walk you through the steps to protect yourself as much as possible from having your personal assets exposed to potential lawsuits. Unfortunately, business owners think this will never happen to them.
Once a lawsuit is filed or is looming, options are much more limited. Initial planning using the advice of an attorney can make all the difference. Do not wait until a lawsuit is filed to schedule an appointment to protect your personal assets. There are requirements that have to be followed to prevent creditors and plaintiffs from “piercing the corporate veil” and reaching your personal assets. It is not enough to simply form the LLC or Corporation. Courts may determine that the requirements were not followed and rule that a business owner’s personal assets are at risk. Good planning starts before the trouble begins.
Getting ready to start a business? Congratulations! In the state of North Carolina, starting an LLC is an affordable option for business owners. Most people set up an LLC to limit the exposure of their personal assets from claims arising out of their business operations. Our experienced attorneys will help guide you through the steps necessary to make sure you are protected.
Choosing Your LLC’s Name
Choosing your LLC’s name is an important first step in setting up your business. You should choose a name that will catch your clients’ eyes. The name you choose must be sufficiently different from any other LLC or corporation already registered with the Secretary of State. Additionally, your business name is required to identify itself as an LLC. The most common way to do this is by placing LLC, L.L.C., or Limited Liability Company at the end of the chosen name.
You’ve got a great idea and are ready to start your own business. How exciting!
If you are like many new business owners, you are probably wondering how to legally structure your new business. You have heard about LLCs and corporations, but do you know the difference? Do you know which is the best option for your business?
If not, you need to consider the goals and strategy for your business and your personal finances.
For example, do you want the business to be separate from your personal assets and debts? Do you want to be taxed once at a potentially higher rate or do you want to file separate tax returns for the business? Do you want to take on investors to help grow the company? How much control do you want over the day-to-day operations and strategy?
Your answers to each of these questions will help evaluate the advantages and disadvantages of each option and find the best fit for your business.
Congratulations, you’ve started your own company! The ability to become your own boss and take control of your professional and financial future is unique and should not be taken for granted. The inclusion of partners can make the experience more satisfying because you have people sharing a common goal to support and work alongside you as you grow your business.
While added partners can bring added success, it is important, however, to have a detailed partnership agreement in place that sets out the terms of the partnership. Here are a few tips on how to create a professional working relationship that benefits you and your company.
1. Keep it professional
The media and entertainment industry often romanticize the relationships between business partners, chronicling best friends or family members’ journey from a two-person startup to a fortune 500 company, all while maintaining a close and fun relationship. While friends and family members can certainly run a successful business together, you do not want to find yourself in a situation where personal issues and emotions make it difficult for you to make business decisions, as separating business from personal matters is often very difficult.
If you go into business with a close friend or family member, it is even more important to have a solid partnership agreement. The agreement will be important and helpful in resolving conflicts, in detailing how the business will be managed, and in allocating profits and losses. It is important to establish boundaries between your personal relationship and working relationship, and having a partnership agreement will help you to do just that.
2. Talk it out (beforehand)
While it is not possible to plan for every situation imaginable, business partners can prepare for most circumstances by talking about how they would like to handle certain circumstances and memorializing their plans and agreements into a partnership agreement. You planned for the marriage and the honeymoon- you should also plan for the divorce. Establish what you will do in case there is sickness, conflict, major life events, opportunities and setbacks. You will want to leave no stone unturned to avoid having to scramble and negotiate for solutions last minute. The partnership agreement should document the outcomes of these conversations and layout an action plan for various scenarios.
3. Establish duties for each partner
The partnership agreement should be very clear about roles and responsibilities. You want to reduce the potential for conflict and stress by establishing who will be doing what for the company. For example, the partnership agreement should delegate responsibilities development, strategy, communications, IT, etc.. Once it is clear who will focus on certain aspects of the business, each partner should adhere to the established boundaries.
4. Consult a third party
When serious conflicts arise, you may want to consult a third-party consultant, a mediator or an attorney to bring an unbiased opinion into the mix. The partnership agreement should address when outside resources should be brought in to reduce internal conflict.
5. Have an exit strategy
Have a plan in place in the event that a partner wants to leave the company, passes away, or faces life events, such as divorce or bankruptcy, that could negatively impact the company. Include these provisions in the partnership agreement from the beginning. It is also important to consider what will happen to the business in case of a merger or acquisition, buy out, or simply selling to another entrepreneur. Determine how assets will be liquidated or ownership will be transferred if it becomes necessary to wind down the business.
Starting a business or adding a new partner? The lawyers at Perry, Bundy, Plyler and Long LLP can help draft and negotiate a partnership agreement that benefits both the partners and and the business alike. Give us a call at 704-289-2519 to schedule an appointment with one of our attorneys.