What You Need to Know About Starting a Business or Non-Profit

Many individuals and organizations are unaware of the benefits that an attorney can provide for their business. An attorney can help you successfully navigate numerous issues and transactions, including formation, real estate leases, taxes, licenses, governance, employment, and many more considerations.

The decision to incorporate your business, for example, impacts its structure, taxes, operations, liability – to name only a few considerations.  Did you know that an attorney can explain the basic benefits and consequences of forming a business?  If you work with a partner, do you have a formal written agreement describing the relationship?  An attorney can assist you in creating your business and understanding the formalities involved.  An attorney can also:

• Help you decide which business entity will be most beneficial in meeting your goals.
• Assist you in registering your business with the necessary state and federal agencies.
• Aid you in obtaining the necessary governmental licenses your business will need to legally operate.

On-going businesses need constant assessment of their operations, management, finances, and policies to ensure that they are operating at their best capacity.  Are you aware that an attorney can provide essential support to operating businesses?  An attorney can:

• Explain your current city, state, and federal obligations, such as paying taxes and maintaining the necessary licenses.
• Analyze your current business contracts and explain your rights and obligations. An attorney can also draft new forms that will better benefit your business.
• Review your business’ compliance with corporate governance policies.

Leases of commercial space, such as offices and retail stores, are often complex documents that are drafted to benefit the landlord.  Did you know that your rights and remedies are limited to what the lease expressly states?  An attorney can help you explore all of your options before you sign a lease, and:

• Advocate and negotiate on your behalf for favorable terms in the lease.
• Explain the obligations and consequences of the lease, if you have already signed an agreement with your landlord.

Your business’ formational documents, along with many state laws, describe the proper roles, responsibilities and activities for your company’s Board of Directors.  An attorney can advise your Board of these obligations, as well as provide appropriate board training to ensure that the directors understand and will comply with their fiduciary duties.  An attorney can also help your business to acquire director and officer liability insurance.

Non-profits must comply with many obligations that do not affect for-profit companies.  An attorney can advise your not-for-profit on incorporation and tax exemption matters, such as:

• Assisting in training the non-profit’s board of directors on non-profit corporate governance and compliance.
• Drafting fiscal sponsor agreements for your non-profit, while its tax exempt status is pending.
• Advising previously-incorporated non-profits on their on-going reporting obligations, to ensure compliance with applicable laws.

Did you know that when a business or individual considers raising capital, its decisions may implicate contract law, federal and state securities laws, and corporate law?  An attorney can advise you on your financing options, by:

• Explaining the legal issues relating to raising capital, including seeking a loan from friends and family, private lending arrangements, crowd-funding, and creating equity in your company.
• Advising you on state and federal laws on soliciting investors.
• Reviewing any private lending arrangements in which you or your business may engage.
• Creating the necessary documents that your business will need for its stakeholders.

An attorney can provide essential assistance in managing the many legal issues that employees and independent contractors create for a business.  An attorney can:

• Help you determine whether your company’s workforce is classified as employees or independent contractors.
• Explain your city, state, and federal employment tax obligations.
• Ensure that all employees are registered with the state Department of Labor and are authorized to work in the US.
• Recommend best-practice employment record-keeping policies.
• Suggest the employment insurance that your business should purchase.

Create independent contractor agreements for all third party contractor relationships

Has your business made an oral agreement with a customer, vendor, or employee?  Did you know that not all verbal promises are legally enforceable?

An attorney can advise you on your rights and obligations if you have entered into an oral agreement.  An attorney can also draft written agreements for your business to use when contracting with others, to ensure that it is protected against non-performance.

The laws on cyberspace, websites, and the internet are constantly changing.  If you have a website or conduct business online, you need to be aware of your legal obligations.  An attorney can help you to understand the many legal issues that your business may face in connection with its website, including:

• Collecting online data.
• Sending email blasts to your customers.
• Drafting appropriate policies and disclosures on your website.
• Controlling the ownership of your website and domain name.
• The legal implications of having links from your website to other websites.

An attorney can register your trademarks, slogans, and any other intellectual property that your business owns, with the proper state and federal authorities.

Individuals or organizations seeking information or assistance should call 212-426-3000 during business hours and ask for the Community Development Project or email us at communitydevproject@legal-aid.org .

The information in this document has been prepared by The Legal Aid Society for informational purposes only and is not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. You should not act upon any information without retaining professional legal counsel.