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When you run a small business, every cent counts. It can be difficult to spend money on anything you don’t consider vital. Hiring a lawyer during key times in your small business might seem like an unnecessary expense, but the money you spend now on a business attorney could save you time, money, and energy in the long run and could protect your business.
When it comes to your small business, you don’t want to leave anything to chance. You might enter into an employment contract or partnership agreement with the best of intentions but when things fall apart—which they sometimes do—it’s important that everyone knows and understands their rights and obligations.
Here are three contracts or agreements you’ll want a lawyer to look over.
If your business uses employment contracts with workers, you’ll want to be clear on what goes into that contract: the terms of employment, the circumstances in which the employment can be terminated, and the employment expectations. If your business requires confidentiality, protects trade secrets, or deals with sensitive matters that require employee discretion, your employment contract can enforce those.
An employment contract is designed to protect you and your employee, but a poorly written contract—or one that is unclear—can create headaches for everyone.
Having a lawyer write a contract that clearly sets out the employment expectations reduces the chances of misunderstanding or confusion. It means all parties know what to expect.
A partnership agreement is a contract between business partners that sets out how their partnership works. Do both parties have equal say in all matters? Are both equally financially responsible for the business? What happens if one party wants out of the agreement?
There are many factors to consider in a business partnership. Not only can a business attorney draft a clear business agreement, they can also raise issues you and your soon-to-be partner might not have considered, including what happens to the partnership as the company grows.
A shareholders agreement is a contract between each of the owners of a company. Similar to a partnership agreement, it sets out the expectations on each owner and lays out how shares can be sold and how disputes between owners are resolved. What matters require unanimous approval versus majority vote? What happens if a shareholder wants to sell shares? How much say does each shareholder have in business decisions?
Shareholder agreements are vital, as disputes between shareholders can result in a business failing. Talking about these matters beforehand with an attorney and formally agreeing to the terms sets the foundation for success.
A business attorney will advise you of your legal rights and obligations and make sure your contracts protect your interests. He or she will also raise issues you might not have thought of and suggest options for dealing with various situations.
Unfortunately, too many small business owners only seek out legal advice when they’re already facing a serious issue. Talking to a business lawyer before you face legal action protects you if any legal issues arise. If no legal issues arise, maybe that’s because you took the time to have an attorney write up clear contracts in the first place.