The following article explains each stage of a business and the corresponding role of a business attorney during those stages.
The Role of a Business Attorney
As a business, tax, and litigation attorney, my role advising a business changes during the life-cycle of a business. During its infancy, a business has vastly different legal needs from when the business has matured.
Business Formation & Startup Stage
A new business may start out as a home-based business. The main employee is often the owner. For a new business, the concerns are
- planning and
- establishing the best structure from a tax and liability perspective, and
As a business attorney, I talk with small business owners about the product or service they plan to offer, other people or companies involved with their business operations, the financial goals of the business, risks to the business, the business owner’s financial situation, and other factors that may affect how the business should be structured. We discuss Minnesota and federal tax law, Minnesota laws and regulations affecting the business, and find the best option for each particular business owner.
Each small business is different. For some, an LLC is best, while others would benefit from the tax treatment of an S Corp or another entity. Some Minnesota businesses should consider liability insurance to reduce their risk while others have very little risk.
Business Funding Stage
A developing business may improve its position in the market by the addition of a partner or funds from another source such as an angel investor or venture capitalist.
As a Minnesota business attorney, I explain to the business owner the options for setting up the financial arrangement. The arrangement may be in the form of a loan, a transfer of ownership in part of the business, or a hybrid. I ensure that the business owner’s rights and relationship are clearly delineated in the contract to minimize the possibility of hard feelings, disputes, and litigation.
As a business grows, the business may encounter legal questions, want legal advice, or seek to minimize its tax burden. For example, the legal issue might include intellectual property (copyright, trademark, patent, etc.) related to a website, logo, or business name. The issue might involve tax strategies or planning expenses to reduce tax liability. The issue might include drafting a contract to help the business grow.
As a business attorney, I often answer questions from business owners who need to make decisions and want to understand the legal ramifications of their options. I draft contracts, negotiate deals, and help my clients grow their business without unnecessary exposure to legal liability.
Businesses naturally encounter disputes. The disputes may be between the business owners. The dispute may also be between the business and another company, an employee, or a customer. Often, these disputes can be resolved before the dispute evolves into litigation.
As a business attorney, I advise business owners dealing with legal problems. As a business litigation attorney, I am experienced litigating business law cases in Minnesota courts. However, litigation is expensive, so when possible, I work with the business owner to find creative solutions to solve problems and calm disputes.
Sale of the Business
When a business owner sells the business, a number of legal issues arise. The business sale involves contracts, valuation, transfer of intellectual property, tax considerations, and possibly seller financing issues.
As a business attorney, I walk through these considerations with business owners, analyze the legal issues, and ensure that the business owner’s legal rights are protected. Business sales are often large, complex transactions, but they can go smoothly when done right.
Legal Counsel vs. Litigation
In summary, a business attorney helps a business through two roles: counsel in business decisions and litigation. Good legal counsel often prevents litigation.
For this reason, I gladly accept calls from my clients, give them legal advice over the phone, and help them prevent problems before litigation arises. I often provide legal counsel over the phone as a free service to my clients. Occasionally, an issue requires a more comprehensive legal analysis, so I explain the attorneys fee to clients so they can consider their options.
When litigation is necessary, my concern is having the issue resolved favorably and efficiently so that there is as little impact on my client’s business as possible.
About the Author
Aaron Hall is a business attorney in Minnesota, licensed in state and federal court. He has significant experience in business law, has published articles on LLC and small business law, and has been quoted in the Star Tribune, Pioneer Press, and a number of other newspapers. As a lawyer to business owners, Aaron Hall provides legal counsel and litigation services to businesses in Minneapolis, St. Paul, the Twin Cities metro area, and throughout Minnesota. Aaron Hall may be contacted at 612-466-0010.