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One can conceive of a business as a living, growing organism that migrates through various changes and evolutions. We here at San Diego Corporate Law have discovered that there are natural growth points and retraction points at which it is necessary to hire a good San Diego corporate attorney to help. Here are nine such growth points.
When Your Business First Incorporates
We here at San Diego Corporate Law believe that most business should operate in a limited liability entity, like a corporation or limited liability company because there are many advantages to having a corporate form and many risks to not having one. But, we recognize that small, just-starting businesses may decide to wait and avoid the time and expense of forming a corporation or an LLC. But, at some point, your business is big enough and strong enough that it should be incorporated. While the incorporation forms might seem simple enough, there are a lot of necessary steps to take after your corporate entity is formed. These include the need for custom-drafted bylaws or operating agreement, ownership agreement(s), electing of directors or managers, securities issuance, annual corporate maintenance, etc. See our discussion here. A good corporate lawyer is essential.
When Ownership Expands
Many San Diego businesses start off as one-woman or one-man shops. But, at some point, your business probably expands and you want to add new owners. This is another natural growth point at which it is essential to have good advice from a trusted corporate attorney. You need to consider how control of the business will be divided, how profits (and losses) will be handled, any buy-sell conditions, etc.
When Your Business Hires its First Employee
Hiring employees implicates a host of legal issues and laws. See here. Your business must now be in compliance with labor laws, tax laws with respect to withholdings, must purchase unemployment insurance, develop business policies and an employee handbook, etc. Having a corporate attorney assist you with making sure you meet these and other requirements, as well as a good employment contract or employee handbook will make this process much smoother for your business, and for you.
When You Lease or Buy Your First Commercial Real Estate
Owning and/or leasing commercial real estate is a complex endeavor. A commercial lease is typically 75-100 pages long with many tenant obligations. Likewise, buying real estate also comes with a myriad of issues with respect to condition of the property, title and various duties imposed by California law on property owners. If you are leasing or buying real property, you will need a good attorney to help make sure your business is in the best position possible.
When You Develop Your First Significant Intellectual Property
Every San Diego business has intellectual property, if only in the list of customers, vendors, and clients. When your business develops serious and significant intellectual property such as valuable trade secrets, trademarks, copyrights and/or patents, then it is essential to hire trusted legal counsel to protect the value of those IP assets.
When You are Thinking of Acquiring or Merging with Another Business
Needless to say, buying or merging with another business is no simple task. The sales agreements itself is a major legal endeavor that is fraught with many potential risks. You must have proper guidance with that alone. From a letter of intent, through due diligence and investigation, and culminating with the execution of the final agreement, there is a series of steps you must undertake to be assured that you are getting the deal that you think you are getting. There are also legal requirements to be met such as bulk sales clearance or recordation and title requirements if real property is involved. You will need trusted corporate counsel to help navigate through this process.
When You are Thinking of Selling
For similar reasons, you need trusted corporate counsel when you are thinking of selling your business. Whatever your reasons for selling, a business must be put in its best condition to attract the best offer and find the best buyer. This is similar to how you might make some repairs and update the decor of your house before you put it on the market for sale. A good corporate lawyer can help with drafting a purchase agreement, negotiating terms, and other issues that come up during the sale of a business.
When You Need Financing or Need Investors
You also need legal guidance when you are obtaining needed financing and/or seeking investors. At a minimum, compliance with disclosure and securities laws must be taken care of, along with any amendments or additions to your business’s corporate structure and investor contracts.
When Things are Going Badly and You May Need to Close
Sadly, there are times when a business fails. If that is happening to your business, you need advice and guidance on how wind up the business and properly dissolve any corporate entities that you have created. There are very important steps to take to avoid the corporate/business debts and liabilities becoming personal debts and liabilities. As just one example, failure to remit employee withholding taxes to the state or to the IRS from the business will cause such liabilities to personal obligations of the business owner(s). Hiring a business lawyer during the winding-down process avoids legal troubles and complications down the road.
Call San Diego Corporate Law Today
If you need legal advice relating to setting up your corporation, call experienced business attorney Michael Leonard, Esq., of San Diego Corporate Law. Mr. Leonard has been named a “Rising Star” for 2015, 2016, 2017, and 2018 by SuperLawyers.com. Contact Mr. Leonard by email or by calling (858) 483-9200.