Written By: Brandy Miller | February 1, 2017 | No Comments
Prevention Is Much Less Expensive Than Repairing
You can apply that statement to many things, but it is particularly true in the legal world. Waiting to address legal issues until after they occur increases your costs as compared to being prepared ahead of time. Therefore preparing legal policies and practices in advance is a very savvy business move as you begin your business.
Here are some legal matters to consider.
The first question is whether to incorporate and if so, what entity is appropriate. Most business owners should choose a corporation or LLC business structure. These structures offer the best protection from liabilities stemming from business activities.
Insurance is extremely important, and many times required. Remember if it’s worth doing, you should do it right. A flaw in the coverage can prove fatal when a business needs that protection the most. Consult a professional that you can hold accountable if they made a costly mistake.
Most businesses need contracts to make deals. Drafting a contract from scratch every time can be expensive. You do not need to prepare every agreement from scratch. Saving cost by having a contract template written which is tailored by the business owner to fit each particular deal. When it comes to signing contracts drafted by another company’s lawyer, always have your attorney review it.
Again, having a contract reviewed costs additional money. Many business owners would instead not add on to the expense of any deal. However, if a lawsuit or dispute arises, that contract could favor the other company in every way. That leaves you with the unenviable task of paying a lawyer substantially more to try to fix the problem once the dispute arises. A properly reviewed contract with fairly negotiated terms for both businesses assures that the other company will not have all of the options on their side, and likely avoids the need for expensive litigation and dispute resolution.
The reason multiple owners decide to go into business with each other is that they feel they can trust each other. However, things can and will happen. Business lawyers exist because things often go wrong. It is not uncommon to see issues that divide fellow business owners to their core, and resolving that dispute can lead to litigation. With that in mind, it’s easy to see that it is far less expensive and time consuming to start with an agreement than to deal with the issues after the dispute has erupted. Business lawyers are trained to know how various arguments tend to begin. Consulting an attorney to create procedures to resolve conflicts quickly before tempers flare will likely mean the business, and the friendships, survive.
Finally, estate planning is essential for the same reasons. Take the time to consider how the business will continue after your death, and who will benefit from your lifetime of hard work.
Upfront Legal Planning is Like Insurance
Think of document creation as a path to prevention just like buying insurance. It’s like buying peace of mind. You know the bad things are taken care of, and now you can go through life comforted with your plan in place.
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