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Annual Checkup
What you and your business lawyer should review now.
By Michael E. Young
To make sure your company is heading in the right direction with minimal legal headaches, it’s time for an annual checkup with your business lawyer. If you hate lawsuits and government investigations, here are five things you should cover during your consultation.
1. Changes in Business Ownership
It’s important to verify who owns equity in your company and decide if
changes in ownership need to be made for tax or other purposes.
Frequently, a key player joins or leaves a business, but the legal
paperwork to reflect changes in ownership gets overlooked. In addition,
the marriage or divorce of an equity owner may result in necessary
changes in ownership. As time passes, it may also make sense to plan to
transfer some or all of your equity to your children as they assume
responsibilities at your company. These are just a few scenarios. What’s
important is recognizing that ownership frequently changes hands in a
company and you want to do it correctly to ensure that the business is
protected and taxes are minimized.
2. Entity Status
If you’re operating your business as a sole proprietorship or a general
partnership, it’s probably time to discuss with your business lawyer the
advantages of converting your company into either a corporation or a
limited liability company. Your legal counsel can explain the pros and
cons of each type of entity so that you can make an informed decision as
to the best path for protecting yourself as the company grows during the
coming year and beyond.
3. Existing Contracts
Have your business lawyer review your existing contracts to ensure
you’re protected and to spot potential legal dangers that can be
prevented by taking action now rather than procrastinating. Sometimes
this may mean amending an existing agreement, replacing it with a new
agreement that better reflects the deal between the parties, or simply
taking certain steps (e.g., giving required advance written notice) to
extend or terminate a contract.
4. New Agreements
During your consultation with your attorney, be sure to discuss new
relationships with employees, independent contractors, suppliers, and
joint venture partners. You will want to review or draw up legal
agreements to ensure that you are adequately protected in the event
something goes wrong, to reduce the risk of misunderstandings with the
other parties, and to avoid lawsuits in general.
5. Website Compliance
Since the laws and regulations governing e-commerce are constantly
changing, make sure your attorney reviews your website for any potential
compliance issues. Based on my experience as a business lawyer, I’ve
found it may just involve a simple update to your site’s privacy policy
and other legal documents. Occasionally, you may also need to tweak some
of the language on your site to avoid getting in trouble with the
Federal Trade Commission or other government regulatory agencies.
This list is not all-inclusive; however, it does cover the most common
legal problems that you’ll want to get fixed during an annual checkup
with your business lawyer.TBJ
This article was
originally published on mikeyounglaw.com and has been edited
and reprinted with permission.
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MICHAEL E. YOUNG is an internet business lawyer based in the Dallas suburb of Plano. To learn more, go to mikeyounglaw.com. |
This content is for informational purposes only. Consult an attorney regarding specific legal questions.
