Common Legal Concerns of Small Businesses
Every small business owner encounters a variety of legal issues during a company’s lifecycle. By understanding some of the common legal concerns for small businesses, an owner can prepare in advance to address many legal problems swiftly and effectively, rather than being blindsided by unexpected issues. Counting on a knowledgeable business law attorney can also help a small business owner minimize business disruptions from legal problems and — in some instances — even avoid them entirely.
Business Entity Type and Structure
For both new and established businesses, a central legal concern is choosing and implementing the most suitable business entity type and structure (sole proprietorship, Limited Liability Company / LLC, partnership, or corporation) for the enterprise. After settling on the structure, it is crucial to satisfy all necessary legal requirements for establishing and maintaining the structure.
The choice of business entity is a paramount concern for the owner of a new business. But evaluating the legal structure of a business is not a one-time legal concern. As operations grow and expand, the original structure choice may no longer be the best option for the business. Even established businesses should be attentive to whether a change in business structure might be beneficial. Since the entity choice affects both taxation and liability, it is one of the most essential ongoing legal concerns for a business to address.
Every business owner can benefit from talking with an experienced business law attorney about options for the entity type and structure for their business. A knowledgeable lawyer can help you choose the most suitable structure for your business and ensure that all legal steps for establishing and maintaining it are met.
Contracts and Legal Agreements
No matter what type of business you own, you enter into contracts and legal agreements in virtually every aspect of operations. Those documents govern your legal rights and liabilities with respect to the related transaction, affecting both implementation of the transaction and settlement of potential disputes over performance.
A small business owner should make certain that every contract and agreement provides the maximum legal protection for the interests of the business and the owner. The best way to achieve that goal is to get help from a business law attorney in creating standard forms and contracts used in the business, as well as in drafting or reviewing other contracts and agreements that arise in the course of the business. Advice and counsel on contracts and agreements is one of the primary reasons that every business should have an ongoing relationship with a business law attorney.
If a problem arises during implementation of a contract or agreement, a business law attorney can help you analyze the issues, explore options for resolution, and even negotiate a solution with the other party when appropriate. In many cases, you can avoid having a contract dispute escalate to litigation by getting help to address the concerns as soon as they arise.
Regulatory Compliance and Licensing
The implications of federal, state, and local laws are a significant legal concern for every business. The extent to which laws and regulations apply to the operations of a business, and the applicable compliance and licensing requirements for the business depend significantly on the nature of the business.
For a business owner, there are two ways in which laws and regulations affect operations. The first is the need for compliance with all the legal requirements that apply when establishing the business. The second is staying attentive and adjusting to future changes in legislation and regulations. In both cases, relying on advice from a business law attorney is the most effective way to be sure that a business begins operations in full compliance with laws and regulations at all levels and maintains compliance when the statutory and regulatory framework changes.
Business Continuity
Understandably, most small business owners focus primarily on day-to-day business operations and addressing current pressing issues. However, ignoring broader issues affecting the future of the business can have significant (and adverse) consequences when an unanticipated event occurs. For example, what will happen to business operations if the business owner unexpectedly cannot tend to daily operations matters because of an accident or medical emergency?
Ensuring business continuity — and even eventual transfer or sale — through a business succession plan is one of the most important legal concerns for a small business owner to address. Planning for the future of the business should be a top priority for every owner, and it is especially important for a family business.
Even if a business is not family owned, advance planning can ensure an orderly process for continuation, transfer, or sale of the business and maximize the financial return for the owner or their beneficiaries. Without proper business succession and estate planning, much of the value of a business can be lost when future events begin to unfold.
Other Legal Concerns for Small Business
In addition to the common legal matters noted in this discussion, a small business may face other concerns. For instance, a business with employees must take a wide range of employment law matters into account. Some businesses also encounter intellectual property concerns relating to trademarks, copyrights, patents, and trade secrets. If a business has multiple owners, management disputes may occur and even threaten the existence of the company. A wide range of other types of legal issues may arise in a small business as well.
Whatever your legal concerns are as a small business owner, the key to successfully navigating those concerns is seeking experienced professional help at the right time. In most cases, that means you should talk to a business law attorney as soon as you become aware of an issue, rather than trying to resolve it yourself or delaying efforts to find a solution. When legal problems arise, they rarely get better if they are not addressed promptly — and often grow into even bigger issues to solve if they are ignored.
Schedule a Free Consultation With an East Valley Business Law Attorney
In our business law practice at Peterson Law Offices, we know that small businesses, whether new or established, often do not need a full-time lawyer but do need reliable, responsive legal counsel throughout the life cycle of the business. Our goal is to help your business succeed, grow, and thrive, while minimizing legal problems you encounter and finding the optimum solutions for issues that do arise.
Your initial consultation is always free of charge. We welcome inquiries from clients throughout the East Valley, including Queen Creek, San Tan Valley, Gilbert, Mesa, and Chandler. Schedule your free initial consultation by calling 480-878-5998 or using our online contact form.
