8 Reasons You Should Hire a Lawyer for Your Startup

If you have recently opened a small business, then you are already feeling the pressure. From struggling for a place in the market to allocating labour, the last thing you need is to read law books. Namely, there are many legal aspects to running a startup, so it’s useful having a lawyer you can trust.

Opening a bank account

For a natural person, opening a bank account is fairly easy. However, the procedure is much more complicated for a firm. If you have a lawyer by your side, he/she will advise you which banks offer the best deals and which type of account (or accounts) to open.

The financial aspect of running a small business is further complicated when the time to take out a loan comes. Again, a small business attorney’s advice will prove helpful, as they know a thing or two about credit lines designate for legal entities.

Liability and insurance

Regardless of the kind of company you run, you are going to be liable for the products or services you provide. Such liability is perfectly acceptable but what you want to avoid is personal liability, as a single lawsuit can leave you penniless.

A good lawyer will advise you on how to comply with regulations regarding insurance coverage. Insurance companies offer all sorts of packages, so you need to select the right package that perfectly suits the needs of your startup.

Managing debt

Many companies take out loans to refinance debt. Startups, in particular, are resorting to debt as a financing option more often than they did a decade ago. There is nothing wrong with your company owning money but if you manage this debt responsibly, then the firm should be fine.

The best way to manage debt is to hire a financial consultant but this can be costly. That is why only large companies have financial advisors. For small businesses, it’s more affordable to hire an attorney who is familiar with the legalities pertaining to debt management.

Overseeing the signing of contracts

Once you sign the first contract with a client as the head of the startup, you‘re in business, literally. In most cases, clients expect to be presented with a legally-binding contract of everything you have agreed with them in person (or over Zoom).

In this sense, will and estate lawyers are perfect for this job as they have plenty of experience in drafting contracts. As an alternative, you can draft a contract template on your own and then have an experienced lawyer review it.

Terms and conditions need to be drafted spotlessly unless you want to lose a lawsuit over a comma or another legal/linguistic blunder.

The protection of intellectual property

There are certain industries, such as IT, that rely on the protection of intellectual property. Whether it’s a design your employees came up with or an invention by your clients, a patent lawyer is needed to help safeguard intellectual property.

Copyright infringement and the theft of trade secrets have been commonplace nowadays. Luckily, legal experts can help you protect your intellectual assets in front of a judge. From the company’s name to its logo, everything can be aped unless you possess copyright.

Employment policies

Small businesses make up more than a third of the Australian economy, so the cumulative workforce they employ is everything but small. Startups don’t employ many people and it is often the case that solopreneurs run them.

However, as your company grows, you are going to employ more people. A small business attorney is essential for this task, as they will draft contracts that you will use several times over.

Furthermore, they can adjust these templates for times when you hire independent contractors that require a different type of employment contract.

Paying taxes

“Nothing is certain except for death and taxes” is a famous saying attributed to Benjamin Franklin. A startup must pay its taxes, there is no argument about that but they need help calculating the correct amount. The best way to be on good terms with local, state, and federal taxmen is to hire a lawyer.

He or she knows tax codes the best, so you won’t end up to paying double taxes or missing a due date. In fact, you might want to sit down with a lawyer before starting the company and ask them everything you want to know about taxation in your state or territory.  

Brainstorming with the legal representative

There are several reasons why you should have a chat with a lawyer before the startup is founded. Firstly, they will inform you of nearly all costs you can expect, such as taxes and interest rates.

Furthermore, experienced lawyers will warn you of potential problems and provide you with useful tips regarding the name of the company, HQ’s location, or common copyright snares.

As you have seen from our 8 examples, hiring a lawyer is so important for a startup that it should be done before the company is founded. Ask around for a good lawyer that will help legally secure your startup.