For those venturing into a startup, the stepping stones from the beginning are most often the hardest obstacles. Remember that you are not alone. According to the U.S. Small Business Administration there are 28.8 million small businesses just in the United States, and its estimated two-thirds fail to survive in the first two years. That can be a hard pill to swallow for those looking to enter the startup scene, and often many founders lean to a business lawyer to create the proper foundation of success. Is that necessarily needed so early in the game?
Depending on who you ask, you will get a response depending on the company needs. Typically, engaging a lawyer is a decision that is best left for the founders, who should be asking for exactly what is needed in order to get through the obstacles in the structure, formation and legal documentation. To understand when a lawyer is necessary, you need to understand the steps that are necessary to get your company started.READ MORE: 'Great Lake Jumper' Dan O'Conor Has Jumped Into Lake Michigan Every Day For Over A Year, And Has Come Out Better For It
Formation of startup
The research needed to start a business, filing the business name and incorporating are all processes that can be done and filed by the founders without the need of a lawyer. You may want to bring in a lawyer when there is talk of founders, investors and equity. The corporate structure is very important, and getting a lawyer to advise in this aspect can be a very important service that will save all parties involved any headaches in the future should an obstacle present itself.
When your company grows and you assess whether to hire employees or bring on contractors, it is important to have a rock-solid agreement in place in either situations. Be sure to cross all your t’s and dot all your i’s, especially whenever there is a consideration of company growth. Once an agreement is signed, there is very little wiggle room for change when the elements of a contract are not satisfactory. This is when you call in a lawyer to draft the proper agreement. Keep in mind that an agreement can be done without a lawyer, but it may be a cost-saving alternative to have a lawyer simply do a review prior to any signatures.READ MORE: Chicago Weather: Hot And Sunny For Days To Come
Angel and seed funding, where investors come into play, are the most important moments to have a lawyer by your side. Take into consideration what industry you are in and what kind of investors you are engaging with in order to find the right lawyer to sift through your documents. These documents can be technical and more often than not need a lawyer to make sense. Lawyers have experience with many of these types of documentations, making it best to have them on board during this process.
If your company has an asset that needs to be protected, you will need a lawyer. The language and process of getting your asset registered needs to be done by a lawyer that specializes in intellectual property. This element will bring value to your company, and will secure your company’s success in the long run.
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This article was written by Elle Toussi for CBS Small Business Pulse