5 Reasons to Have a Lawyer When Starting a Business

There are around 12 million contract lawsuits filed against small businesses every year. The average cost of these is $54,000. New businesses also face a variety of legal decisions they need to make while setting up their brand. This can be really challenging to do without a skilled attorney on your team. Those are just a few reasons why hiring a lawyer could be a good idea if you're starting a business. Additionally, consider these beneficial elements of hiring a lawyer when starting a business.

Manage Your Risk

Managing your risk is an important part of running a company. For example, you may be interested in moving your business in a bold new direction. But if you don't fully understand the risks associated with that move, it could threaten your livelihood. Hiring an attorney is a good way to solve this issue. They can advise you before you make major moves so that you know the full amount of risk that you're assuming and can take steps to mitigate it. Another step you may want to look into here is picking up business income insurance. As you take on risks to expand your brand, you might face lost income, moving and relocation costs, and difficulty paying employee wages. If you have business income insurance, that won't matter. You can buy your policy online and feel more comfortable taking risks knowing that you have a strong backstop in place just in case the worst happens.

Form a New Business Entity

The business entity you form will greatly impact the tax breaks you qualify for and what your personal liability looks like in different kinds of legal matters. For example, a sole proprietorship is easy to get up and running quickly. But you could be held personally liable in the event that you're sued. That makes this a risky business structure for your new company. You could go with a limited liability company instead. If your business is set up this way and you're sued, your company's assets will be at risk not yours. This provides a layer of separation that keeps you safer and could encourage you to take more risks that are good for your business. A business attorney can help you figure out which of the most common business structures is right for your company. You need to start off with the right foundation if you want your business to grow strong. Your lawyer will make sure that happens.

Deal With Lawsuits

Of course, you'll also need an attorney to help you resolve any lawsuits you may face as a new business. Unfortunately, it's impossible to predict these, and you don't want to have to waste time searching for the right attorney after you've already gotten sued and have a strict timeline for moving forward with the case. If you hire a business attorney now, you'll be able to deal with any lawsuits that may arise right away. Plus, your lawyer can advise you on the right steps to avoid certain legal issues you may not realize you're risking right now.

Ensure You Comply With All Tax Laws

Businesses need to comply with all relevant tax laws. If your company doesn't, then you could be fined severely and even forced to sell off some of your assets to cover the debt you owe to the government. But business taxes can be confusing—especially if this is your first time running a company. That's another reason why hiring an attorney could make sense. Doing so will help you ensure that you're not missing any important tax requirements. The good news is that you'll likely only need to hire a tax attorney once or twice per year when you're starting out, which should help to keep costs low. An experienced tax lawyer may also be able to help you find loopholes that you might not have discovered on your own. This could lead to a situation in which you actually save money by hiring a tax attorney, even after accounting for the cost of their labor.

Protect Against Legal Issues With Employees

Finally, if you plan on hiring employees, then there are a number of potential legal issues that you may experience with them. This can include issues with pay and benefits, problems with the safety of your workplace, and workers' compensation claims when someone gets injured on the job. Hiring an attorney could help you maintain a more positive relationship with your employees. They can step in and do the negotiating for you so that you don't develop an adversarial relationship with your team. Plus, your attorney can help you get the best outcome for your business no matter what issue you face with employees.