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Why Seek Legal Advice Before You Start?
“Small business owners should know how to ask the right questions. Owners must understand employment procedures, treatment standards, wage legalities, and how limited liability works.”
– Steven Reeves, LegalCORPS Board Member and Business Attorney
Having a basic understanding of business law is essential when starting your own business. By working with LegalCORPS, Small Business Development Centers across Minnesota can provide access to free business law advice for their small business clients.
LegalCORPS, a nonprofit, supports small business owners and nonprofits in Minnesota by arranging free business law assistance for those for whom it otherwise would be out of reach. Its core mission is to expand access to the business law part of the legal system.
LegalCORPS recently asked some of its volunteer attorneys as well as business consultants from its small business support partners around Minnesota why the average person should seek out legal advice when starting or expanding a business. The responses explain the benefits to people in spending their time and resources to get business advice first.
Overwhelmingly, the attorneys and business advisors concur that entrepreneurs should take the time and spend the resources to consult an attorney before they start their venture. Cathy Lindquist, the Executive Director for West Central MN SBDC, believes that, “in doing so, clients can increase the success rate of their small business and they can be proactive by knowing their options and potential risks.” She notes that, “there are many laws that small business owners need to be aware of before beginning their own course of action. In meeting with an attorney, entrepreneurs will gain a better understanding of these laws and how they can affect their business.”
Additionally, SBDC business consultants Mark Thein and Jenny Herman believe that clients should meet with an attorney so they can discuss liability issues. Mark says, “There are different levels of liability depending on what type of business someone is starting.” By talking with an attorney, clients can increase the success rate of their small business and they can be proactive by knowing their options and potential risks. Jenny says, “Seeking advice beforehand allows a client to determine the type of entity and the different law issues that go along with owning and managing a business.”
The experts point out that it is extremely important to protect personal assets, and an attorney can provide guidance to do so. LegalCORPS Board Member and business attorney Ivory Ruud says that she “sees a lot of over-reliance on the internet as a source for legal information. While internet research can yield some helpful information, there is also a lot of junk out there. Online forms and online legal service providers are not good substitutes for legal advice from an attorney licensed to practice in (and familiar with the laws of) the state where the business is to be located.”
After spending several years advising entrepreneurs, LegalCORPS Board Member Steven Reeves has realized that “it doesn’t matter what we do unless we educate clients on how to use us; we need to teach them not to be afraid of things, and to ask the right questions.”
Developing good relationships with professional advisers and an attorney is a necessary step in creating a business. Especially for the many small business owners who do not go into business with a business or legal background, these professionals are available to provide support throughout the process. Business owners that do not have those relationships and understand the importance of those connections find it more challenging to reach their growth potential. The only barrier comes in reaching out and accepting this assistance.