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Legal Considerations in Business Financing – Starting a Business

By March 1, 2018 No Comments

No matter what type of business you plan on starting, there are many rules and regulations to be wary of. Every sector of business has their own laws surrounding what can/can not be done, what type of research and safety regulations need to be followed, and certain standards that you must follow even before operations commence. In addition, there are different sets of regulations in place depending on federal, provincial and municipal standards, which can often leave business owners in uncompliant spots for laws they were completely unaware of. One of the worst situations a business can find itself in is being audited and failing to comply with basic standards, which could result in losing the business altogether.

A corporate lawyer can assist in terms of helping you follow the laws that pose potential risks and help in drafting contracts that are fundamental to the ways in which your business functions. Investing in a solid foundation for your company can save you plenty of money in the future, from possible lawsuits to audits. There are, however, a few questions to consider before going to a corporate lawyer:

  1. What structure will your business have? Whether it’s a sole proprietorship, partnership, corporation, or co-operative business, each type has strengths, weaknesses, and various reasons why it might suit what you are looking for in terms of what power you would like to have in your business. A corporate lawyer can help you figure out which structure will best suit your needs if you are having trouble deciding. In addition, no matter what structure you select, agreements will need to be drafted in order to ensure anyone involved in the business, whether through partnership or employment, is getting a fair deal, and the company itself is covered in the case of disagreement.
  2. Where will you be running your business from? A small business is often run out of a home office, before expanding out into a larger office space. It is important to match the stage of your business with the location, as you don’t want something as simple as location hindering your business. Taking the time to critically think about moving to minimize excessive paperwork can save you future headaches. Corporate lawyers are ready to help when it comes to signing leases in an office building or purchasing an entire building, to ensure you do not get locked into a deal that could cost your company thousands of dollars later. They can review any contracts before you sign on, and advise you of concerning areas and help you dispute potentially risky clauses.
  3. What contracts and agreements govern the business? Regardless of the business type, all businesses require licensing with certain municipalities to follow certain tax and regulatory laws. Beyond that, there are also franchising, employment, subcontracting, partnership, incorporation and public offering documents to consider. A corporate lawyer can listen to exactly what you need, draft the documents from start to finish, and submit these documents for you. This ensures your focus remains on the purpose of the business, rather than the tedious regulations. It also ensures the process is done swiftly and correctly, as local lawyers are likely familiar with the local laws and know exactly how to process the necessary documents correctly. The regulatory corporate documents, such as employment contracts and subcontracting contracts, ensure that no matter who you bring into your business, you will be backed up in the case of dismissal or injury. Without proper regulatory contracts and agreements, work practices can fall into a lucrative category, in which unhappy clients or employees have higher power over you should they retain a lawyer and attempt to sue.

In considering these main points before meeting with a corporate lawyer, a first meeting can go smoothly, as you and your lawyer will have a clear picture of what you want your business to be. Corporate lawyers can also assist in a variety of other issues that may arise once your business is up and running. Having a trustworthy corporate lawyer that you can call on when necessary will be a valuable asset, especially if they are already previously familiar with the documents for your business. Instances such protection of intellectual property, disagreements between business partners, employment contract concerns and environmental complaints, will require a lawyer for either reviewing the documents, advising of rights and representing you in court in the case of escalation. Businesses encounter many unforeseen circumstances and having a lawyer you can depend on will help make the process painless.

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