Sperring Law Firm has written before about how important it is to have an attorney represent you or your business when negotiating or drafting contracts. This is especially true when you are forming a new business entity in Pennsylvania. There are numerous documents and procedures you must follow whether you are a sole proprietor or creating a corporation, LLC, or partnership.
First and foremost, you must decide what business structure works best for you and your business. This is the single most important decision you will make at the beginning because it affects your taxes and liability risk. Whatever choice you make, your attorney can meet with you to discuss your short and long-term goals to help create the structure that works best for your unique situation.
Once you choose how to structure your business, you must then move to what – what contracts do you need to best protect the business and you? This is where the importance of your attorney really comes into play because these initial contracts - and knowing what they say - create the foundation for a successful business, or one that is consistently in turmoil.
For instance, if you establish a sole member LLC or an LLC with multiple members, you need an operating agreement that clearly spells out the percent interest of each member, the responsibilities of the members, how money will be invested and withdrawn, what business decisions require a vote and how those votes are to take place, as well as many other decisions. If you choose to establish a corporation, then you will need a strong shareholder agreement, by-laws, and a board of directors agreement. Having a good business attorney negotiate and draft these contracts for you and explain to you what these contracts say can mean the difference between adequate protection or being sued personally because your separate corporate existence is “pierced.”
Once your attorney helps you draft your opening agreements, next comes your business’ customer and supplier contracts. Having these contracts in place and understanding them can help your business avoid excessive damages, potential consumer protection claims, or complaints that your goods and/or services are faulty. Your attorney can negotiate and draft these agreements to maximize your business’ protection. However, ultimately, the attorney’s role is to make sure you also understand these contracts so you can avoid common pitfalls when operating under the contracts.
Finally, your attorney can advise your company on how to comply with local, state, and/or federal regulations that govern your business. This includes drafting your contracts in a way that they comply with these laws. Otherwise, you may have a fantastic product, provide amazing customer service, and make significant profit, but if you fail to comply with regulations then government enforcement can potentially shut down your business or otherwise make it too costly to fix. Your contracts must be written to avoid this, and your attorney must help you understand your contracts and how they protect the business.
Whether you are starting a new business, or want your existing business’ contracts and founding contracts reviewed, Sperring Law Firm can help. Call us today at 484-250-9058 or email us at firstname.lastname@example.org.