Entrepreneurs seeking to start a new business must deal with many business challenges simultaneously. They must manage a constant balancing act of risk and opportunity. Often, entrepreneurs focus so much on creating a product or developing their service that they don’t spend enough time thinking about and managing the legal risks involved with setting up a new business.
In his article entitled Seven Sadly Common Mistakes when Forming a New Company, Steven Gladstone highlights a few important legal mistakes that entrepreneurs tend to make when starting a new business.
We’ve found that two mistakes on his list are ones that we come across most frequently. Both of these mistakes relate to not getting the proper legal advice. Once these mistakes are made, it’s our job to step in and help our clients avoid disaster.
Get Legal Assistance from the Start
We are always surprised at the number of new business owners that come to us AFTER they have made, or ignored, important decisions relating to the legal risks they face. Remember the old adage “he who is his own lawyer has a fool for a client.” Business owners must focus on the tasks of running their business while relying on lawyers to handle legal matters.
Every entrepreneur must build a professional team to help not only manage risk but also to find opportunities for growth. A lawyer is an essential part of that professional team. The team should also include an accountant and any trained professional who has specific knowledge and experience in other important areas of the business.
Don’t Use Cheap Legal Forms Found on the Internet
Far too many business owners believe that they can save money by using cheap legal forms found on the Internet. You can easily find forms that will help you incorporate your business, make certain required filings, and enter into important contracts. But you should beware of using them. That’s because those “standard” forms cannot possibly cover all of the circumstances and risks that are specific to your business.
Corporate law is not one-size-fits-all. There would be no need for corporate lawyers if anyone could simply fill in the blanks of a form. You need a lawyer who is trained to identify current and future risks, and plan for them properly. Saving money at the start by using forms you find on the Internet can mean expensive legal trouble down the road.
Take care to avoid the common mistakes that entrepreneurs make by seeking legal counsel from the start and relying on trained lawyers to handle your legal matters.
