There are some important times in your small business development where you will need some legal advice. In the beginning, one of the most important first choices you make is what type of legal entity to become. This is an especially important decision for food businesses, because we are making food that people will eat and we want to make sure our liability is limited in case someone gets sick or something goes wrong. Here are some things that can affect what type of entity you become:
Find an Business Attorney When You Initially Form Your Company
- Do you own your house? This can have an effect on whether or not you want to limit your liability (LLC vs. sole proprietorship)
- Do you have other income in your family?
- Do you need to shelter some of your income from taxes?
- What state are you in (some states are expensive than others for certain kinds of entities)
Get a Real Estate Attorney When Changing Locations
Another time that you’ll need to get legal advice for your small business development is when you’re getting into a new location. You will need a real estate attorney to look through your lease. You might get lucky and have your business attorney and your real estate attorney be the same person — but either way, you do not want to sign into a contract that will obligate you to a significant portion of overhead without consulting an expert. We might have paid our attorney $1000 or so when we signed at the Noe Valley Bakery, but we’ve been there for over 20 years now, so the fees were well worth it.
Hire an Attorney When Bringing On New Team Members
Another critical moment when you’ll need an attorney in your small business planning is when you begin growing your team. When you write an employee handbook (note, you need an employee handbook!), you need a labor attorney to look through those documents to make sure that you’re telling your employees everything they need to know the legal parameters of working with your business. Our first draft of our handbook was 7 pages before I took it to the attorney, and it was expanded to a 37-page document. They added sections about Family & Medical Leave Act, Discrimination, Sexual Harassment and Violence in the workplace, etc. — where the attorneys helped us get definitively clear about our worker’s rights and their protections while working with us. The new times we’ve needed clarification on things like employees break policy or what constitutes harassment, we were so glad that we established clear guidelines about what is expected of our employees as well as our role in protecting them.
Those are the most important times that we’ve worked with legal counsel to protect our business. Even though it is a cost, it’s an investment well worth it in your small business development.