As a business attorney, I often wish my clients knew certain things before they came to see me. Here are five things I wish every business owner knew before they consulted with an attorney.
- Importance of Incorporation:
Many business owners operate as sole proprietors, which can leave them personally liable for any debts or liabilities incurred by the business. Incorporating your business protects your personal assets in the event that your business is sued or faces other financial problems. When you form a corporation, your business pays corporate income tax on its profits. You can also deduct from your business’s revenue any money you pay yourself as an employee. The IRS treats a corporation as an independent entity, which means that income and payroll taxes will not be deducted from the owner’s personal taxes.
- Need for Contracts:
When two or more parties are involved in a business transaction, it is important to have a written contract in place. This contract should spell out the terms of the agreement and the obligations of each party. Without a contract, there is a risk that one party will not fulfill their obligations or that there will be a misunderstanding about the terms of the agreement.
- Choose the Right Business Entity:
There are several different types of business entities, and each has its own advantages and disadvantages. The type of business attorney denver entity you choose will affect factors such as liability, taxes, and the level of paperwork required. It is important to choose the right business entity for your specific needs. The most common types of business entities are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each type of business entity has different rules and regulations.
- Protect Your Intellectual Property:
If you have developed a unique product or service, it is important to protect your intellectual property. This can be done through copyrights, patents, and trademarks. Failing to protect your intellectual property can result in others stealing your ideas or using your products or services without your permission.
- Understand Employment Laws:
If you have employees, you need to be aware of the various employment laws that apply. These laws cover topics such as minimum wage, overtime pay, discrimination, and more. Ignoring these laws can result in significant penalties, including fines and possible jail time.
By understanding these five things, business owners can be better prepared when they consult with an attorney. Having this knowledge will help them navigate the legal process and make informed decisions about their business.