- The two most common structures for business development are LLCs (Limited Liability Companies) and Corporations.
- Some businesses require profession-specific licensure in order to operate. You can consult a business attorney or do your own research to determine if your business requires a license to operate.
- Hiring an attorney is not a legal requirement for forming a business. However, if you are forming a business, hiring an experienced business attorney can be an invaluable resource and can prevent you from taking on undue risk.
- Always make sure to choose a business attorney with specific experience in business development, ideally within your community or the community where you intend to establish your business.
When clients come to my office wanting to talk about legal structures for business development, there are a few things we have to establish right off the bat.
Are we starting a business from scratch—i.e., is this a brand-new entity? Or, alternatively, are we restructuring a current business? Or perhaps it’s a combination of those two things, and we’re starting multiple entities at the same time.
Whatever the case may be with each particular client, these questions come down to matters of structure. In general, when it comes to structuring a business, the two most important structural options are LLCs (Limited Liability Companies) and corporations.
Of course, there are other business structures, such as professional LLCs (specialized LLCs for certain professions) and partnerships. However, for my clients’ purposes, LLCs and corporations are the two main modalities that we tend to work with.
So, each case has to be examined and analyzed to determine which sort of business structure will best suit the client’s needs, and the answer will often be either an LLC or a corporation.
There is also the matter of licenses. Many people do not realize that establishing their specific business requires licensure, and that they, as the person opening the business, are subject to the licensure process.
In some professions, licensure is an established and understood part of the vocation that gives the individual practitioner their ability to practice. This is true, for instance, of lawyers, doctors, dentists, registered nurses, and teachers, among other professions. The educational processes/degrees that train individuals for these professions include a test at the end to acquire the requisite licensing necessary to practice in the field.
If it is not immediately clear whether or not you need to acquire licensure in order to practice your business, the best thing to do is to consult with a qualified business attorney. However, if you prefer to research on your own, a quick Google search of your type of business and the term “in Michigan” with keywords like “licensure required” will likely yield results. If you do decide to conduct your own research, the best place to check with is the Michigan Department of Licensing and Regulatory Affairs (LARA).
Once you check with Michigan’s LARA, you should have a better sense of whether your proposed business is subject to licensing. If you’re still unclear, you can send an email to the contact address on the LARA website and inquire.
Knowing whether or not licensure is required to start your business helps inform the entity/business structure selection process and moves the surrounding discussions forward. Then we can move into factors like how many employees you plan to have, and how large you intend to expand your business if all goes well.
In my day-to-day practice at Wagner Law, I use a very specialized intake sheet for incoming clients that streamlines this process and these conversations. Whenever I get a query from a perspective client that is looking to start a business, I send out my intake sheet to them. This really helps drive the conversation and it also makes our meetings much more efficient. I have found that the intake sheet makes the selection process clearer, easier, and quicker.
What Is Business Development?
When creating your business, consulting with an experienced attorney can help smooth the launch. There are many aspects that a business planning attorney can help you with when starting your business. These areas include structuring your business, taking care of any licensing that is needed, creating non-disclosure agreements, zoning laws, and more.
Is An Attorney Always Needed To Create A Business?
No, you do not always need an attorney to create a business. There is no legal requirement to have an attorney helping you through the process or representing you at any step of the way.
It is, however, highly recommended to have an experienced, qualified business attorney by your side if you are starting out on an endeavor like building your own business. Unless the business is an exceedingly simple one-person operation—and even then—a layperson trying to go through this process on their own takes on enormous risk. Specifically, this is often the type of risk that laypeople wouldn’t know about, or know how to look for.
Simply put, if you aren’t an expert in the legal requirements for businesses, you expose yourself to taxation concerns from the IRS, contract concerns, labor concerns, concerns about going into business with other people, and more.
Many of these risks can be mitigated or eliminated by having the counsel of an experienced business attorney, who knows what problems to look out for and knows how to fix those problems if they find them.
Quite simply, in addition to the reduction of risk, having a business attorney to help you through the process gives you peace of mind. This is reflected by the vast majority of my clients who already have some experience or exposure to the realities of running a business, none of whom would think to go through that process without an attorney. I think everybody realizes the benefit and the value that an experienced attorney provides to the process.
I would caution that you shouldn’t pick any business attorney. You should be more discerning and do your research according to set criteria. When looking for a business attorney to help you get a business off the ground, you want them to be community-based and familiar with the community where you will be opening your business. I have always considered my firm a community-based firm, local to Northern Oakland County. I do have clients that are outside of that geographic area, but from most part, I am a community attorney.
You also want an attorney that practices in business development first and foremost. Whether or not an attorney says that they are a “business attorney”, you want a lawyer who specializes in business development specifically. This is essential, since it will assure you that your attorney has all of the best up-to-date information about the field, as well as local connections and practiced expertise. It will also allow you to view their track record and portfolio when it comes to cases that are similar to yours.
Once again, at my firm, you will find that level of specialized expertise. I offer central, key experience in business development, with cases in Northern Oakland County and the surrounding areas.
There are numerous legal matters an entrepreneur must consider when establishing their own business. Not only are there federal laws governing the creation of an enterprise, but there can be state and local laws as well. Keeping up with all that is required of you as a business founder can be daunting without the help of experienced legal counsel.
How Can An Attorney Help Me?
By safely navigating company founders through the critical stages of creating business, an experienced business attorney can help ensure the protection of not only the young business, but also the personal and financial lives of the founders. Some legal matters to consider when creating your business include:
- Federal, state, and local legal compliance
- Avoiding legal problems with employees
- Protection of personal assets
- Partnership agreements
- Copyright issues
- Lawsuit protection
If you’re starting your own business and need a trusted advisor to help you, please feel free to contact us for a complimentary consultation.