Business laws tend to be complex and difficult to comprehend for the average person looking to start a new company. As you focus on the hundreds of tasks and decisions involved in launching a new business venture, you will want to trust that you are implementing strategies that limit liability and boost legal protections for you, your cofounders, and your company. Taking steps to give your business the strongest foundation possible is key to building confidence in your venture’s future. Although many business owners may not think to enlist the guidance of an experienced attorney until a legal dispute arises, involving a business lawyer as you form the company carries several advantages. Not only will your attorney help you determine the most strategic formation to support your needs and create legally enforceable contracts that protect your business, but they can serve as a source of ongoing support as your business grows and changes. This post will explore some valuable insights from a trusted Colorado business attorney to help you gain a better understanding of the steps to take to keep your company safe and secure.
A Passion For Helping People Achieve Their Business Goals
In a recent interview, business attorney Tosh Grebenik, founder of Judex Law in Broomfield, Colorado, shared his motivation for entering this field. He explained that he has always wanted to help people, especially those who may not be familiar with the nuances of business law and, therefore, vulnerable to others taking advantage of this lack of knowledge. For example, he shared an anecdote about a photo of his wife’s family being used in the photographer’s advertising campaign. The family asked if the photographer could give them the photo after the marketing campaign ended, but the photographer denied this request. However, a family friend (who happened to be an attorney) learned of this incident and determined that since the family had not signed any waivers or agreed to the photographer’s use of their image, the photographer was obligated to give them the photo. Tosh enjoys sharing this story as an illustration of how a knowledgeable attorney can help people and businesses recognize their rights, protecting them from other parties trying to take advantage of their unfamiliarity with ownership and business laws.
Key Legal Insights to Consider When Forming a Business
Judex Law approaches business matters from the perspective of prevention. Tosh cites Benjamin Franklin’s aphorism, “An ounce of prevention is worth a pound of cure.” Essentially, Tosh believes in putting a concerted effort into laying the stable and secure groundwork to prevent disputes from growing out of hand in the future. Putting a little time and money into protection strategies will save considerable resources in the long term, as many minor (and foreseeable) disputes can snowball into costly litigation that drags on for months or years. Implementing protections at the start of your new business can end up saving you from litigation or shielding you from personal liability. During the interview, Tosh identified two primary actions that new business owners should consider taking to maximize their chances of successful and sustainable growth. Let’s take a look at these two recommendations.
Put Everything in Writing
Every agreement you make with your business partners should be documented. Tosh has seen even the best of friends who start a business together turn against one another and expend considerable time, money, and effort arguing about something that was never put down in writing. Oral agreements, as strong as they may seem at the moment, are extremely difficult to enforce when a dispute arises. As you put together your business, be sure to document every agreement you make with your partners, employees, contractors, suppliers, and other entities. People’s priorities, loyalties, and perspectives can change over time, so it’s essential to have a written contract in place to revisit should a disagreement arise.
Avoid Personal Liability
Tosh believes it’s best practice to keep your personal finances separate from your business finances. He recommends forming a Limited Liability Company (LLC) in order to shield you from personal liability in the event that someone goes after your business. For example, if someone files a lawsuit against your company, that party can only go after the business’ assets and not your personal assets (including your home, car, or personal bank accounts). However, you must avoid certain mistakes that can leave you vulnerable to personal liability, such as co-mingling your business and private funds. You can avoid co-mingling funds by keeping completely separate books, financial records, and bank accounts for your business. If you co-mingle your funds, the court may allow the other party to pursue your personal financial assets, even if your business structure is an LLC. Tosh encourages his clients to devote some time to understanding their responsibilities for keeping their business practices in line with all tax and liability laws.
Finding the Right Attorney to Support Your Business Needs
While finding an attorney to support your business is important, it’s equally crucial to work with a lawyer who inspires trust and confidence. Attorneys are people, too—they have different personalities and approaches to practicing law. Tosh advises those looking for a business attorney to find someone with relevant experience and the capacity to give the business the attention it deserves. When it comes to online tools like LegalZoom and other sites that offer “free” or “cost-effective” templates for business contracts, Tosh warns business owners about the overly generic nature of these tools. These templates often leave businesses insufficiently protected from liability, so it’s best to work with a knowledgeable attorney or legal professional to create and implement clear and effective contracts. Finally, Tosh acknowledges that starting a new business is not easy. It’s common to feel overwhelmed and even alone in your struggle, as you must devote your attention and resources to so many different aspects of your company. He reminds people that working with professionals can make all the difference—a realtor to locate commercial space to house the business, a tax professional to provide guidance, and a business attorney to assist with formation and legal protections.
If you are thinking about starting a new business venture or need help navigating a business-related matter, reach out to Judex Law, LLC, today at (303) 523-4022 to discuss your options with an experienced and friendly Colorado business attorney.