Top Ten Legal Questions for Business Owners

QUESTION 1: Do you form a business entity to operate your business?

Issues to Consider:     

            1.         Liability issues           

            2.         Tax consequences of the choice of entity

            3.         Licensing/filing requirements for preparation of corporate governance documents

QUESTION 2: Do you need financing to operate your business?

Issues to Consider:     

            1.         Type of financing to obtain (debt vs. equity)

            2.         Fairness of agreements with investors/lenders relating to capitalization of the business

QUESTION 3: Do you have partners in establishing and operating your business?

Issues to Consider:     

            1.         Division of ownership/responsibilities for management of the business

            2.         Benefits of agreements among partners to deal with future events affecting partners

QUESTION 4: Do you operate a business which operates in a regulated industry?

Issues to Consider:     

            1.         Compliance with applicable governmental regulations and statutes

            2.         Licensing requirements for owners and employees

QUESTION 5: Do you use intellectual property to operate your business?

Issues to Consider:     

            1.         Establishment/registration of trademarks to identify your business and distinguish it from competitors

            2.         Website design and compliance issues

            3.         Protection of trade secrets from infringement

QUESTION 6: Do you have employees or consultants?

Issues to Consider:     

            1.         Employment/consulting agreements to outline scope of duties and compensation

            2.         Non-competition/non-solicitation agreements to prevent unauthorized activities

            3.         Employee manuals to outline company employment practices

QUESTION 7: Do you provide benefits/incentives to employees?

Issues to Consider:     

            1.         Drafting plan documents to establish retirement/health/disability benefits

            2.         Compliance with ERISA/Internal Revenue Code regulations governing employee benefit plan design/administration

            3.         Design of bonus/equity incentive arrangements to encourage performance

QUESTION 8: Do you own or lease real estate used in operating your business?

Issues to Consider      

            1.         Status/protection of title to real estate assets

            2.         Fairness of purchase contract/lease terms

            3.         Ownership/lease of property by an entity which is not the operating company

QUESTION 9: Do you have a plan for the future of your business?

Issues to Consider:     

            1.         Industry dynamics/status of market for organic growth or through acquisitions

            2.         Ownership succession plan for family members/employees

            3.         Personal estate planning for ownership interest in your business and other personal assets

QUESTION 10: – Do you need a lawyer to operate/manage your business?

Issues to Consider:     

            1.         It is better to have a good lawyer working with you and your company before you really need one

FINAL POINT: Your lawyer can be a valuable member of your organization