Business Lawyer Austin – When it comes to being an entrepreneur, it’s important to note that your business is always considered to be an extension of yourself. It’s something that’s both unique and personal to you. From a more legal standpoint, there are things that can cover all sorts of common issues and questions that many new business owners often have when either starting a new business or acquiring an existing business.
Here are three of the most important legal tips for new business owners to consider making note of.
*First and foremost, perhaps one of the most important legal tips for new business owners is to always use contracts to help protect your right to be paid for your work. In the United States, the general rule if that in the event that you have to hire an attorney in order to help you collect on a bill, you won’t be able to recoup any of your attorney fees from the debtor unless a signed agreement to that affect exists. This means that you will need to ensure that you include recovery of all collection costs and attorney fees in the event of a default. Furthermore, if your business is solely online-based, you should also consider including a provision that provides for a mandatory dispute resolution method or venue, which could include either private arbitration or a local court.
*Another important legal tip for small businesses is to always know all of your options. More specifically, there are two different options that are available to you if you decide to purchase an existing business instead of starting from scratch: you can either purchase the equity or purchase the asset side of the balance sheet. For the seller, these are options that differ when it comes to how the income from the actual sale is taxed, and as a result, sellers can push for the sale to be a stock sale; however, for buyers, an asset transaction can be much more preferable. Furthermore, buyers should be much more careful to not acquire liability for the previous sins of past ownership. In terms of an asset purchase, buyers aren’t purchasing the actual previous corporation, but they are instead obtaining all of the assets of the corporation, such as the goodwill and the name.
*One other important legal tip for small businesses is to limit your overall personal liability risk. This is something that can be achieved by forming either a corporation or a limited liability company instead of operating as a partnership or sole proprietorship. By taking this step, the law will view everything like your business is announcing its own separate legal existence. On the other hand, now doing this will be like walking on a tightrope without a safety net underneath it. Furthermore, while there is a cost to do this, it’s not that expensive at all and is very well worth it in the long run. It’s also important to note that this cost is something that can vary depending on the state in which you currently reside and operate your business out of.
Reeves Law, PLLC, located in Austin, Texas handles cases in a variety of legal practice areas. The professionals at Reeves Law are committed to providing personalized attention to their clients. The competent team will work to ensure the most favorable outcome possible in every case. Contact Reeves Law for more information on the legal services they provide and for a free consultation tailored to your specific needs.