Often, entrepreneurs or business owners who are trying to exercise financial restraint while operating a business decide to forge ahead and make important decisions without the advice or input of a corporate attorney near San Jose. This can have unseen, long term consequences, since working with a business lawyer throughout the “life cycle” of your company—from start-up funding (if it happens to be a new business) to sale of the business or turning it over to another generation of owners—can have a significant, favorable effects on your bottom line. There is always a cost benefit analysis that the owners must make about hiring an attorney and determining when the advice of counsel is needed. However, it is often wise to bring in a trusted corporate attorney as part of the team before a crisis arises.
Business and Entity Formation
One of the many ways a corporate attorney can help you is by helping you select the right business structure for your needs. Commonly, a company’s owners try to decide among an array of entity choices including C corporations, S corporations, limited liability companies (LLC), limited partnerships, or limited liability partnerships will best fit your needs. Choosing the right structure for your company is essential for laying the foundation for long-term growth, limitation of liability, investment strategies, tax minimization, and many other key objectives. A related decision is where to register the entity – California, Delaware, elsewhere? The owners’ plans for the business directly affect these decisions and may make one form of entity or domicile superior to the others.
Employment issues often prove tricky for entrepreneurs and business owners and employment law can be a particularly complex area to navigate. It is highly advisable for business owners to take a proactive stance toward employment issues. By having a corporate attorney draft employment agreements, offer letters, equity incentive plans, and severance agreements, you can reduce the risk that your company will be adversely affected when a dispute arises. Your attorney can reduce the possibility of a dispute occurring – or a claim against the company being successfully pursued by a disgruntled employee – by drafting an employee handbook, evaluation procedures and perhaps forms for conducting evaluations, employee performance improvement plans, or independent contractor agreements.
Mergers and Acquisitions
Nothing in the business sector remains static for long, and mergers and acquisitions are often vital for a company’s long-term success. An acquisition often provides an exit opportunity for the company’s shareholders, allowing them to convert their ownership of the company into cash or liquid stock. Before acquirers or target companies begin the initial negotiations, it’s essential to retain the services of a corporate attorney. Your attorney can provide referrals to other professionals you’re likely to need, such as investment bankers or business brokers, tax advisors, and accountants. If you are thinking of selling your company, your lawyer can investigate your company’s current operations and documentation, and determine those areas where existing practices create risks to shareholder value. By cleaning up missing or incomplete documentation, your lawyer can improve the efficiency of the diligence process, and resolve documentation issues. Your lawyer can also assist you in structuring the best deal for the company’s shareholders, and spotlight business and legal risks for the sellers in the deal. If you are thinking of buying another company, your attorney can assemble the deal team, organize the diligence investigation of the prospect, draft sale documentation, insure legal compliance, and perform many other essential functions to enable a smooth closing.