Small business is defined as any business, even a home-based franchise, that has fewer workers and/or less yearly revenue than a corporation or small-scale business. A lot of entrepreneurs have started their own business without the help of an attorney, but it is often a wise decision to seek legal assistance for some aspects of the business. A business lawyer will be able to help you protect your business interests and provide advice on how to set up your business structure. Here are some of the legal issues you will need to consider when setting up your small business:
* Bankruptcy: Owners of small businesses are always anxious to prevent the financial ruin that can result from filing for bankruptcy. In such cases, they might adopt some creative methods such as offering services instead of paying debts. However, there are certain rules and regulations imposed by the courts that must be followed. In order to retain the services of a qualified attorney, you should make sure that he or she is specialized in bankruptcy law. Only then will they be able to give you sound advice on various options.
* Operating Agreement: Operating agreements between partners in small businesses are required to ensure perpetual management of the business, its assets, and liabilities. The agreement may specify the payment or reimbursement of debts of the partners. Some agreements also specify the level of equity participation by each partner. Furthermore, it establishes the term of office of each partner and his or her rights to share in the business. In order to benefit from operating agreements, small businesses usually hire attorneys. An expert will be able to draft an operating agreement with your specifications.
* Negotiation: The negotiation skills of owners of small businesses are extremely important. It is important to have a clear picture of what you want and how you want it. The selected characteristics of a small business attorney will provide information needed for successful negotiation. For example, a lawyer specializing in real estate can provide valuable information regarding financing and leasing arrangements. In addition, he or she can represent you during lease negotiations with the help of experienced professionals.
* Annual Income Statement: This statement provides the financial information of a small business. It shows the income generated by the business, including the value of assets and liabilities. It also includes the owner’s year-end profit and loss statement, business transaction accounts, income taxes, and other relevant information necessary to assess the business’s performance. An annual income statement also helps in the selection of an accountant.
* Quality Management: The performance of small businesses tend to fluctuate on a yearly basis. The quality of production or service may change. Hence, a quality management team is necessary to monitor business operations and ensure that the quality remains high. This is done through periodic surveys, audits, and evaluations. An attorney with a good understanding of quality management can help select the right people to perform these tasks, thus improving the efficiency of the business.
* Size Standards: While setting size standards for a small business, owners should consider the overall size of the company. A small business with a modest number of employees can still grow into a large organization with several departments. Likewise, a big business may choose to employ several independent vendors, each bringing his or her own unique expertise. To avoid this situation, owners should carefully consider the size standards before choosing vendors. The size standards should be designed to remain competitive in the local labor market.
Business owners should consult with local Small Business Association for ideas and information on small business employment. The local SBA produces several business related industry publications that are specifically geared towards assisting small businesses. These publications contain state-specific data as well as general industry content. The small business employment section provides links to local employment agencies. The local employment agency can guide business owners in the selection process of an individual with specialized skills in their specific industry.