New business owners have their hands full making plans, developing products and services, and getting financing. However, meeting with an attorney before starting a business can be one of the smartest moves you’ll ever make.
When you meet with your attorney for the first time, it’s a good idea to have some questions in mind. Here are 5 questions to ask your attorney
1. What Business Structure Should I Choose?
Before starting your business, you must decide how your business will be structured.
If you do not form a formal business entity, your business will either be a sole proprietorship (with one owner) or a general partnership (more than one owner). Legally, you and your business will be the same “person,” so if your business has debts or is sued, you are personally liable for those obligations.
To limit this liability, you can form a business entity such as a corporation, limited liability company or limited liability partnership. Owners of these business entities do not risk all of their personal assets if the business cannot meet its financial obligations. Their losses are limited to the amount they have invested in the company.
It’s important to choose carefully because your choice will affect the way your business is owned, managed, and taxed.
2. How Should I Name My Business?
You may already know the name for your new business. But you need to consider legal issues before you start ordering signs and business cards.
Like every state, South Dakota has rules about the name that new business can use. Generally, you can’t choose a name that another business is already using. Also, it’s risky to choose a name that might infringe on another business’s registered trademark. If you think you’ll want to trademark your business name, you’ll want to choose a name that meets the requirements for trademark protection.
3. Should I Have An Operating Agreement Or Bylaws?
Yes. Corporate bylaws and operating agreements provide important rules for operating your business. Your attorney can help you with preparing operating agreements and bylaws that meet the particular needs of your business.
4. How Can I Protect My Intellectual Property?
All small businesses potentially have trademarks that they use to identify the business and distinguish it from others. Your business name, logo, labels, slogans and packaging can all be trademarks, but you must take steps to protect them. You may decide to register a trademark with the U.S. Patent and Trademark Office.
Businesses may also have copyrights in any original works of authorship, including such things as photographs, brochures, and websites. Also, if you have an invention, you may need to apply for a patent.
5. What Contracts Does My Business Need?
Contracts protect your business by describing the rights and responsibilities of the parties to the agreement. A solid contract can reduce the number of disputes that arise, ensure that you get paid for the work you do, and provide a clear remedy if one party doesn’t hold up its end of the deal.