Opening a business involves many people and institutions other than yourself and your soon-to-be customers. You need to deal with various government entities to secure permits or register your articles of incorporation. You also need to ensure that you choose the right business type before you have the same registered. And even if you enter into a partnership or sole proprietorship, you still need to review contracts with your partner and suppliers. If you speak with an Orange County business law attorney, they will tell you that you need a legal eye to guide you all the way to protect your interest in the business.
Business lawyers and contracts
Though contracts should be consensual, some agreements are contracts of adhesion that are written in fine print. This contract is often unilateral but is often disguised as consensual because the other party can still choose not to sign it. For example, suppose you enter into an agreement with a supplier to be an exclusive distributor of their product.
However, you don’t know that there’s a stipulation in their contract that requires you to pay for the products allocated to your store even if they won’t sell. Not only that, but they also set fixed quotas per month that would warrant penalties if not reached.
If you refuse to seek the lawyer’s advice on this contract, you might end up sabotaging your business. The said contract is truly self-serving and is devoid of the consensual element because your only choice was to sign or not. Yes, you can sign it now and just have it nullified later on, but that would be much of a hassle. If you have a lawyer by your side, they can read all your contracts and advise which parts need revision and which stipulations are beneficial to both parties.
Lawyers can determine your liability to the business
Aside from having substantial funding, you also need to ensure that you’re correctly registered with the appropriate government agencies. In addition, when you form partnerships and corporations, you also have to privy to your obligations and liabilities. For example, if you enter into a partnership, you must distinguish your role as a partner.
Generally, there are nine types of partnerships. If you enter into the business as a sub-partner, you are not directly related to the firm. However, if you are a limited partner, you are connected to the company in the form of your limited liability. Aside from these kinds of partnerships, you can also be sleeping, waking, nominal, secret partner, or partners by estoppel, holding-out, or in profit. These partners have different roles and liabilities, so you must know your place.
Lawyers can protect your personal properties from paying company debts
When the business dissolves and winds up, assets will be sold to answer to the company liabilities. However, if the sale proceeds are not enough, the junior and senior creditors can run after the personal property of the partners or incorporators. Therefore, if you have not limited your liability at the onset, you will indeed run the risk of having your real and personal properties being levied or garnished by your creditors. You can prevent this unfortunate event from happening by having a lawyer on retainer to guide you.
All the more, you need the business lawyer’s guidance when you’re creating a corporation. While the business and incorporators are separate entities, there are instances wherein the veil of corporate entity gets pierced. When this happens, the incorporator’s personal assets can answer the corporation’s debts and obligations. If the corporation incurred millions and billions of unpaid debt, you would surely suffer.
Your lawyer can also ensure that your business remains a separate entity from its owners or incorporators. Through this, they can protect the assets you worked hard to earn and save.
Takeaway
Some businesses think that they only need a lawyer when they get into a legal dispute. But, unfortunately, they fail to realize that they can prevent getting entangled in a legal mess if they have a lawyer that guides them since they started their business. Hiring a lawyer from the start is like preventing any kind of disease or ailment from infecting your business. This may require you to spend more on retainer, but it’s way better than paying for damages or getting your personal assets sequestered.
