Tag Archive for: Business Attorney

10 Benefits of Hiring a Startup Lawyer for Your New Business

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Did you know that there are 10853 licensed attorneys in South Carolina? While some specialize in more traditional areas like criminal law, environmental law, or intellectual property, others are experts in the booming business of startup law. A startup lawyer helps advise innovative, quickly growing companies on how to maximize their business.

Hiring an attorney as you are starting a company is crucial to stay compliant with the laws, make financially prudent decisions, and gain valuable advice about risk mitigation. Read on to learn the 10 benefits of hiring a startup lawyer for your new business.

1. A Business Lawyer Will Help You Draft Airtight Contracts

Contracts are an essential part of any business. Whether they are between employer and employee, business and vendor, or customer and business, a contract provides the essential terms of what is being exchanged, for how long, and any associated costs.

New business owners often run into trouble when drafting their contracts. They may fall into the trap of using overly general definitions, unclear limitations on liability, or incorrect timelines. These mistakes are expensive and can expose an early-stage startup company to lawsuits.

Hiring a skilled business lawyer will assist you in contract drafting to ensure there are no missing parts in the agreement. They will understand what you want to communicate, and write in a way to protect your business.

2. A Startup Attorney Can Provide Expertise in Specific Types of Business

Though there are general startup attorneys, business lawyers can specialize in their niche and become experts in certain types of industries. For example, you can hire a business lawyer specializing in the medical field, hospitality, or technology. Finding a person who knows the language of your sector will allow them to dive into the needs of your business.

When interviewing potential startup lawyers, do not be afraid to ask about the types of clients they normally work with. This will give you a sense of if they have worked extensively in your industry.

3. The Startup Attorney Will Help Your Startup Company Develop a Solid Business Structure

One of the most important components of growing an early-stage startup company is setting the business up with the right corporate structure from the get-go. There are pros and cons for each business structure, and consulting with your attorney can help you identify what is best for your business goals.

Examples of structures include sole proprietorships for the sole business person, partnerships if someone else is joining the venture, and professional corporations for bigger business ventures. Your business lawyer can answer questions and help you way the benefits of each structure.

4. Preventing Lawsuits Saves Money in the Long Run

Litigation is an expense that many startup companies do not anticipate. However, the reality is that things go wrong, and efficient solutions are needed to fix them. Business lawyers often charge between $100- $400 per hour, and if a case goes to trial, these attorney’s fees can grow very quickly.

A skilled startup attorney can help you to prevent many lawsuits from even occurring. By advising you to do things like avoiding employment discrimination, addressing your cybersecurity to ensure compliance, and protecting your intellectual property products, they can save you from high expenses.

5. It Is More Cost Effective to Hire a Business Lawyer From the Beginning Than Once Problems Arise

Some business owners believe that they are immune to problems. They feel that things like structuring their business and drafting contracts can easily be done independently and that hiring a lawyer before problems arise is a waste of money.

This theory could not be further from the truth. Taking complex business tasks independently puts a business person in a ripe position to make expensive mistakes.

Imagine this- you draft a contract with a technology vendor, promising to purchase 100 laptops per month for your business. However, you made a typo and had only wanted to make a contract purchasing 10 laptops per month.

What happens next is ugly. You must breach the contract, and pay any associated damages in a settlement. Having a skilled lawyer to advise your major business actions is a great way to avoid liability.

6. A Startup Lawyer Will Help to Mitigate Risk within Business Law

One key aspect of a lawyer’s job is to mitigate risk in any aspect of the business. They will look for potential problems before they arise, to determine how to prevent them from happening.

When it comes to risk mitigation, the four types include risk acceptance, risk avoidance, risk limitation, and risk transference. The reality of being in the business world is that some risks will always be present. It is a good lawyer’s job to consult their client on how much risk they would like to take on, and how to avoid predictable trouble.

Since skilled startup attorneys have seen a lot of things go wrong in other business clients, they can help you to avoid simple mistakes. The team at De Bruin Law firm can help to foresee problems before they happen with their renowned. General Counsel Legal Service for Businesses.

7. They Will Be Your First Line of Defense if Lawsuits Arise

Though preventing lawsuits is very important, they are sometimes unavoidable within the business world. Many small startup companies have a small team, often which does not avoid a full-time lawyer. This is why hiring an outside startup attorney that you can consult on these matters is essential.

Since the startup lawyer would have been working with you for a while already, they know your goals and the structure of the business. They can advise based on what they know about your style, and not provide cookie-cutter advice that would apply to any business. Having this personal relationship is invaluable when times get tough.

8. Hiring an Outside Startup Attorney Is Cheaper Than Having an In-House Counsel

As businesses grow, they often hire In-House Counsel to work directly for the company and advice on legal matters. While this is wonderful for more developed companies, these salaries run an average of $241,325 in the United States.

Though hourly rates of startup attorneys may seem overwhelming, they are a fraction of what you would pay for someone full-time. Invest the money upfront, and it will pay dividends long-term. Finding the right startup attorney depends on business to business, but we can assure you that the right fit is out there for your budget and the expertise that your business seeks.

9. Startup Lawyers Will Help Protect Your Intellectual Property

Intellectual property is a work or invention that is the result of creativity. Whether it is a patent, trademark, or copyright, it is something that an individual has created and must be protected.

Many new startup lawyers create excellent inventions and ideas for their businesses. Without the proper intellectual property protections, those things can be stolen. Even if your business lawyer is not an intellectual property expert, they can assist.

The legal team at De Bruin Law Firm has a Trademark expert who would love to help with your business. You can protect your valued business with a company trademark, to ensure that everything is your property. This South Carolina firm is known to provide excellent service throughout the business law world.

10. They Can Advise You in Negotiations With Partnering Businesses or Vendors

Negotiations are an essential skill for succeeding in the business world. Nothing is quite as it seems, and there is always a deal to be made. Having a skilled lawyer on your side will help you to get the best deal in every situation.

Negotiations and mediations are now the preferred methods of settle disputes. A full-blown trial is becoming rarer in the legal world, as these mentioned methods are far more cost-effective. They also provide a stronger level of certainty that both sides may be satisfied with the outcome.

Now You Know Why to Hire a Startup Lawyer for Your Business

Thank you for reading this guide with us today! We hope you now understand the incredible impact that a skilled startup attorney can make on your business. Whether you need assistance with contract drafting, risk mitigation, or negotiations, a business lawyer can elevate your startup business to the next level.

Our team at De Bruin Law Firm is the legal counsel that you can trust for your business. We are three skilled attorneys, and service the Greenville, South Carolina region. Please contact us today to learn about how our firm can help your startup venture through a startup lawyer.

Registering for and Filing Income Tax Withholding in South Carolina

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South Carolina business owners must take several steps to get their businesses off the ground. They must choose a location for their business and they must obtain financing. They must choose a business entity, such as a limited liability company or a partnership, and they must register a business name. And, of course, the business must register for state and local taxes.

Withholding Tax

Withholding tax is taken out of wages. The withholding tax goes toward the total annual income tax liability. Employers that hire South Carolina employees must issue a return to the South Carolina Department of Revenue for the taxes that have been withheld.

First, the business owner should complete Form SCDOR-111, which is the Business Tax Application. After this form is completed, the business owner will be able to move forward with a number of steps, such as registering for a retail license. After completing the Business Tax Application, the business owner will also be able to register for income tax withholding. Once the application is completed, the business will receive a withholding file number. The business owner will reference the withholding file number in all correspondence and when making payments. It must also be referenced when the business owner calls the Department of Revenue.

Tax Payments

The method of payment varies depending on the amount of withholding tax the business is filing. For those whose withholding tax is more than $15,000 during a quarter, or that make more than 24 payments each year, the business must pay online. These businesses must also submit the Withholding Tax Coupon, Form WH-1601. For businesses that must pay less than $15,000 per quarter, payment may be submitted voluntarily online.

W2 forms for employees are due by January 31 following the tax year. So for tax year 2017, W2s are due by January 31, 2018. These may be submitted online.

As for filing the returns, businesses must file a withholding quarterly tax return (form WH-1605) for the first three quarters of the year. At the end of the fourth quarter, a withholding fourth quarter and annual reconciliation return, WH-1606, must be filed.

Tax Deadlines

These returns are due on April 30, July 31, October 31, and January 31. It is very important to meet these filing deadlines. If a business misses one of the withholding tax deadlines, the business may be subjected to penalties.

As of January 1, 2017, the South Carolina Withholding Tax Tables have been updated for the first time in 25 years. The withholding tax tables will also be updated every year beginning with 2017. It is very important that business owners use the new tables to ensure they are submitting the proper amounts. These tables, along with the withholding tax formula, are available at the South Carolina Department of Revenue website, www.dor.sc.gov.

How business attorneys can help with registration and filing

Navigating the websites of South Carolina’s governmental agents is not always easy. There are dozens of forms online, and it is not always clear which ones you need to use. With the assistance of a business attorney, you will ensure that you are taking the proper steps to launch your business and meet state tax requirements. Rather than risk being subjected to penalties, it is better to seek the guidance of an experienced attorney who understands applicable laws and regulations.

Let our business attorneys advise you

At the De Bruin Law Firm, our attorneys are experienced in helping businesses register for state and local taxes and filing those taxes. To schedule a free consultation with our attorneys, call 864-982-5930 or visit debruinlawfirm.com.

Benefits of an Operating Agreement

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Operating Agreements

If you are considering starting your own business, you need to take certain steps to protect that business, as well as your own legal interests. When business owners decide to form a limited liability company, or an LLC, they often skip creating and implementing an operating agreement. However, the failure to draft and enforce an operating agreement may be a costly mistake in the future if the business runs into trouble. Without an operating agreement, the default laws of a state will govern any disputes that arise, which may lead to unpredictable results.

Many business owners choose to make their businesses an LLC because the company itself becomes a separate entity from the members (the owners). Typically, the members are shielded from liability in certain incidents involving the LLC. The members are also not usually responsible for the debts or liabilities of the LLC. Operating agreements are executed between the LLC itself and the members of the LLC. Operating agreements are legal contracts. The operating agreement describes how the LLC will be managed, as well as how profits and losses will be distributed. Essentially, the operating describes how all aspects of the LLC will be handled.

How Operating Agreements Work Within LLC’s

Although the LLC and the members are unique entities, there are occasions in which members may be liable for their actions and the protections of the LLC do not apply. Members may find themselves accountable for debts and liabilities of the LLC if they personally guarantee debts, such as business loans.

You may have heard the term “piercing the corporate veil.” A creditor may try to go after a member’s personal assets if the creditor can offer evidence that the only reason the LLC was created was to provide legal protections for the members. There are a number of ways to demonstrate this. For example, if annual meetings were never held and minutes were never recorded, the court may find the member liable. If a member maintained too much control over the LLC, if personal funds were mixed with business funds, or if the LLC was not adequately capitalized at the time of its inception, courts may determine that the members are personally liable for the debts of the LLC. Committing fraudulent actions will also usually result in liability.

To avoid these scenarios, the operating agreement must lay out the expectations of its members. The operating agreement may be as detailed as the members like. An enforceable operating agreement also shows that the LLC is legitimate.

Operating Agreements Can Resolve Disputes

In addition, operating agreements may prevent disputes from arising between the members of an LLC. Since operating agreements lay out the expectations of the members, the members are less likely to be involved in disputes because they understand what actions will not be tolerated or may result in liability. If the members are involved in a lawsuit, it often turns into a time consuming, expensive ordeal. A clear operating agreement significantly reduces the odds of such an event.

Operating agreements may also address unforeseen events. For example, what would happen if a member died? The operating agreement may include a key man life insurance clause, which provides that the LLC will purchase life insurance to cover the death of one of the members.

Contact our attorneys for guidance with your new business

At the De Bruin Law Firm, our business law attorneys possess the experience necessary to help business owners launch limited liability companies. We can help you with setting up your business and helping you arise disputes in the future.

The De Bruin Law firm offers a wide range of legal services to clients in Greenville, SC and the surrounding upstate. Our experienced attorneys can help you with legal matters in the areas of business law, criminal law, estate planning, and real estate law.

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