What you don’t know can hurt you. This is especially true for small business owners, who need to comply with a myriad of tax laws, government regulations and other requirements. Getting expert advice will help you avoid legal, financial and tax pitfalls – but hiring a lawyer can be expensive, costing you cash that could be used to grow your business.
Since every business has its own set of unique challenges, it can be difficult to pinpoint which legal matters you can tackle by yourself and which ones require expert advice. Here are just a few general guidelines.
What you can do on your own:
- File your “doing business as” name. Depending on the structure of your business, you may be required to file the fictitious name (the “doing business as” or DBA) of your business with local and state governments. Partnerships and sole proprietors typically must register DBAs, but rules are different for each state. Some states simply require businesses to place a notice in local newspapers; others ask for a small registration fee. Contact your state government’s business department to find out the requirements.
- Apply for an Employer Identification Number. If you are starting a small business, you will need to obtain an Employer Identification Number (EIN) for tax purposes.IRS.gov has a free step-by-step tool that helps you quickly apply for an EIN with no extra paperwork. After completing the application and verification process, you will receive your EIN.
- Create basic contracts and agreements. Simple contracts and agreements with customers and vendors all can be made either without a lawyer. For instance,SCORE offers a free non-disclosure agreement template, which can help keep your business’ proprietary private.
What you may need help with:
- File a patent. Patenting a product can give you a leg up on the competition, but the process can be expensive and take several years. This may or may not be the best strategy for your business. Before you file, consult a patent attorney to evaluate if your product is worth patenting, find out what type of patent you should pursue and identify what rights you will or will not have as a result of the patent.
- Form a corporation. Although forming a partnership, limited liability company or partnership can potentially be done without legal help, forming a corporation is a much more complicated matter. Incorporating involves a complex set of legal and tax requirements at both the state and federal level. If the requirements are not fulfilled, you could lose precious time and money. A business formation lawyer can help guide you through the incorporation process painlessly.
- Deal with lawsuits. If you need to take legal action or if others are taking legal action against you, you will need to hire an attorney. Lawsuits can be related to copyright infringement, labor laws, health code violations, environmental damages or other matters. Hire an attorney that specializes in the topic you are dealing with.
To find an attorney, check the American Bar Association, local listings and simply ask friends, family or other small business owners for referrals. After you have narrowed down your search, make sure to interview the attorneys to see if they are the right fit for you. You can also get free and low-cost business advice through the Small Business Administration’s resources partners throughout the country. Find a SCORE chapter, Small Business Development Center or Women’s Business Center near you.
Original Source: SBA.gov
"When to Get Small Business Advice from the Pros"
Posted: Sept. 15, 2014