I Own a Small Business, Do I Need a Business Lawyer?

I get asked this question all of the time. Mainly, this question comes from people I run into that own and operate a small business and have always done things for themselves. The business may have a few employees, own some assets and is quite profitable. When speaking with them, I always hear “I don’t really have any legal problems so why do I need a lawyer? Business is good and my employees love me.” Well, when I hear this, I know what I am getting into.

The first thing I ask these people is: how is your business structured? LLC? Corporation? Once we determine that answer, the next questions become: Do you have an operating agreement if you are an LLC or by-laws if you are a corporation? Do you have annual meeting minutes? Seven out of ten times people respond “no” to these questions. This is why they need a business lawyer. If they are not following corporate formalities and organizational protocols and someone would sue the company, the chance of that plaintiff piercing the corporate veil and attacking the owner’s personal assets increases exponentially.

Another question I ask is: do you have written contracts for the work you perform and the business dealing you are involved in? About 4 out of 10 say no. Again, this is why they need a business lawyer. The handshake agreement doesn’t work in today’s society. Everything should be in writing, not because you can trust no one, it is because you need

What Is A Business Litigation Lawyer?

In one of his most famous and tautological quotes, President Warring G. Harding once observed that, “The business of America is business.” He was right. No nation on earth has a stronger commitment to free enterprise than the United States. According to the Small Business Administration (SBA), there are nearly 30 million small companies in the U.S., which represents over 99 percent of all employer firms.

Although it is invariably the corporations that make headlines when accused of wrongdoing, most business-related lawsuits are filed against small companies since there are so many of them. This specialized area of practice is called business litigation in the legal profession. Lawsuits that involve malpractice, contract law, and class action suits are the most common types of these cases.

Who To Call

Even though the law is supposed to be blind, companies of all sizes are often cast as villains when accused of wrongdoing. Whether the case is about food poisoning or a defective airbag, a firm must work fast to defend the company’s good name. Failure to do so will almost inevitably result in a deluge of bad press, which will almost certainly hurt the bottom line.

In any civil case, the complainant is the accuser, while the litigant is the accused, hence the term “business litigation.” These accusers could be anyone, including a current or former employee, customer, client, or former partner. The most sophisticated cases litigation lawyers handle are class action suits.

A lawyer that specializes in class action lawsuits must defend his client against

What Many Business Owners Do Not Know When Registering Their Business Online

As a business attorney, I have helped countless clients form companies over the years. However, as the times are changing, many people have begun to form their LLCs or corporations online through one of those self-help document preparation websites, which can lead to trouble in various ways. I am not saying these sites are not good to use, not at all. If you have done your research about the proper entity and the availability of the business name, then using one of these sites may suit you just fine. I have found, however, that most people don’t have the proper knowledge about what entity they use and more importantly, whether they can use the business name.

Most of these sites search the state databases to check for name availability and if the name is available, you are able to file your documents. This is where things go wrong. When working with a new client that wants to start a business and has a business name, there are a couple of things we do. First, we do a basic name search on the state website, just like the online companies do, to see if the name is available for registration in the state in which we are forming the company. Next, we search the US Patent and Trademark website to determine if there are any potential conflicting names in the class of goods or services in which our clients company will be engaging in commerce. Some analysis is required at this

How to Form a Company in Hungary

Setting up a company in Hungary follows the same legal system that is currently used in other countries in the EU.

Our guide will help you to find out more about the procedure of forming a company in Hungary.

Foreign individuals and companies are freely allowed to pursue business activity in Hungary.

Individuals may obtain a sole trader’s licence, while companies shall be registered at the Court of registration.

The time required to set up a company in Hungary is as short as approximately 1 week. This includes consultation, preparation of the legal documents, and registration at the court.

Legal representation is a must in company formations and modifications. However in the process of forming a company in Hungary there are questions beyond the competence of the lawyer it is also advised to engage a consultant. He may explore your needs in depth and share information that are essential for the initial financial and tax planning of the new company, and gives you the best solutions for the particular requirements.

Founders of the company must sign the company’s constitutive document, which, together with some other documents must be countersigned by a Hungarian lawyer, who will then apply for the registration of the company from the Court. The registration process is fully electronic with electronic signatures either from the side of the attorney or the court of registration. Hard copy certificates are not issued in the process.

At the very same time the company is registered it will also get its VAT number. The company may also apply

Selecting Appropriate Business Structure Is Important To Incorporate a Company in Singapore

They say, it is easy to incorporate a business in Singapore. However, ‘they’ fail to tell you the complexities and twists involved in setting up a business a Singapore. To incorporate a company in Singapore, the first hurdle you will come across is selecting an appropriate business structure. To a great extent, outsourcing the process of Singapore company registration to an external firm is the widely accepted option. However, it becomes necessary to understand the different business structures in Singapore before you employ any firm offering Singapore company registration services.

The Various Business Structures to Incorporate a Business in Singapore

Usually, foreigners do not require any type of government approval to set-up a new business in Singapore. Singapore allows about 100% foreign ownership, which makes it the best and preferred location for foreign entrepreneurs, to do business.

For incorporating a bank or a financial institution, getting an approval from the Monetary Authority of Singapore is a must. Let us check out the different options for business structures entrepreneurs have, for incorporating a company in Singapore.

    • Representative Office: A foreign company willing to have its presence in Singapore, but does not intend to carry out any business activities herein, should incorporate their company as a representative office. Singapore corporate environment considers a representative office as an administrative arrangement, primarily, designed for the non-commercial activities. Therefore, a registered office will not have any kind of separate legal status from its parent company. Please note, Singapore does not allow a registered office to perform any business

Should You Incorporate?

You may operate your business as a Sole Proprietor, like 70% of US businesses. However, if business should become fabulous and you begin to rake in some serious cash, then it could be wise to incorporate, as a method to lower your taxes and protect profits.

You may be implementing a growth strategy that requires you to take on additional investors, or maybe implementing your exit strategy, with a plan to sell your business, perhaps to employees through an Employee Stock Option Plan (ESOP). Either scenario may prompt your accountant or business attorney to recommend that you establish a separate legal entity and the preferred strategy could be to incorporate.

What does that mean in practical terms? For a Solopreneur consultant or small business owner, incorporating usually means setting up an S Corporation. A Limited Liability Company (LLC) is another frequently used legal business entity and there are certain similarities between the two.

Both LLCs and S Corporations provide business owners with a degree of protection from lawsuits and creditors.Yet if negligence is involved, the “corporate veil” of protection will be pierced and owner(s) will be liable for any damages.

Second, there are certain similarities in how taxes are handled. LLCs and S Corporations, unlike the more common C Corporations, allow a “pass through” of business profits or losses to the owner’s (the S Corporation shareholders) personal tax Form 1040 in accordance with the share of ownership. There is no separate (double) taxation, as occurs with C Corporations. Both S Corporation and LLC owners

Setting Up a Limited Company

Many people wonder why should they start a private limited company, as such a venture would often involve additional expenses and administrative work. In the case of a sole proprietorship business, these expenses are very nominal.

The deciding factor for forming such a company is your financial liability as an individual. In case you were the sole proprietor and the business flops for whatever reason, you alone are liable to clearing all your debts. When you have large debts that you are unable to pay, you are exposed to the risk of personal bankruptcy. The formation of a limited company provides protection against such an eventuality.

The advantages

By itself, a limited company being an entity is accountable for the actions it takes. The funds of such a company are totally detached from those of the people owning it. There can be one or additional shareholders in private limited companies, though the owners can’t sell the shares to the public, or trade them through the stock market. Only public limited companies can do that.

As long as you do not trade in a false or reckless manner, your risk of losing money as the director of the limited company is only to the extent of the money you may have invested in that company. Nonetheless, if you availed loans from banks against personal guarantee, you will be held liable for paying those loans.

Having such a company may, to some extent, enhance your credibility to prospective clients.

How to start one?

You may hire the services

Employee Incentives and Good Leaver/Bad Leaver Considerations

One of the issues facing companies whether large or small is how to incentivise and retain good staff. There are various types of employee incentive schemes. However a very common one is either to grant share options and/ or shares to an employee.

The assumption upon which the employee is receiving the share options and/ or shares is that they add direct value through their employment endeavours. This is fine while everything is working well but what happens in the event that the employee ceases to be an employee of the company whether voluntarily or involuntarily.

In essence the employee has received his share options/shares in recognition of his endeavours whether past or present and also in anticipation of future endeavours. What options are available to the employer in the event that the employee leaves the company?

Where employee share options have been granted but have not been exercised, the scheme rules or option agreement as well as the employee’s employment contract should state that the share option shall terminate upon ceasing to be an employee. They should also state that the employee agrees that he shall not challenge and/ or pursue any claim in relation to the share option arrangement.

The position is somewhat more complicated where shares vest in the employee whether as a consequence of the exercise of the share option, or otherwise. If an employer has been shrewd it will ensure that the employee/ shareholder is also a party to a shareholders agreement upon vesting of the shares.

A shareholders