Legal Help: What You Need to Know

Legal Advice Explained

It is illegal for a person who is not a lawyer to provide legal advice or representation for anyone else, although people may represent themselves in court if they wish to do so. When someone tells a person what legal action he or she should take by evaluating the situation and applying a specific law, it is legal advice. This involves attempting to impact the legal rights of another by applying legal knowledge gained through education. In addition to the potential for damaging the outcome of someone else’s legal issue, the person who offers legal advice initiates responsibility and even liability for the results. Getting involved in legal affairs is a serious matter that could lead to harsh penalties. Likewise, taking the advice of someone who is not an attorney or choosing to research legal information without speaking to an attorney can have disastrous consequences.

Common Business Start-Up Issues

Even a task that may seem straightforward, such as filling out and filing legal forms, requires extreme attention to detail to prevent minor mistakes from becoming major problems. Rather than waiting until an issue crops up, an entrepreneur should consider seeking legal advice before taking the first step in the start-up process. There are a number of legal business structures, and each includes its own benefits and disadvantages. For example, a sole proprietorship is the simplest and easiest to start, the owner has complete control over all business decisions, and the profits pass directly through to the owner. However, the owner can be held responsible for any liabilities that arise from the business. On the other hand, S corporations are owned by shareholders, who are not personally liable for any debts or legal actions against the business. Profits pass through to the owners, and some of the income may be tax free. The Internal Revenue Service is more likely to pay closer attention to an S corporation, though. If the owners make a mistake when fulfilling filing requirements or other tax obligations, the S corporation status could be terminated. Not only can an attorney make it easier to identify the best structure for a business, he or she should also be able to assist with an exit strategy, drafting agreements for shareholders or partners that allow them to leave the company without causing legal or financial issues. Having buy-sell or buy-back agreements in place from the beginning strengthens the company’s status. Other legal concerns a company may face at start-up could include finding funding sources, purchasing an existing business, developing policies and procedures, and negotiating contracts.

Employment Laws

Employment law deals particularly with the rights and responsibilities of the employee/employer relationship. Federal laws such as the Fair Labor Standards Act and the Americans with Disabilities Act and agencies such as the Occupational Safety and Health Administration create and enforce specific regulations. If a company ignores or accidentally fails to meet requirements, it could end up in litigation. State and local laws may also affect how a company interacts with its employees.

Legal Protections

Just as there are laws specifically prohibiting embezzlement and fraud, there are also legal safeguards in place for companies’ intangible assets, such as intellectual property. Copyrights, patents and trademarks prevent other companies from reproducing, copying, distributing or selling inventions, original works and the logos, slogans or symbols that represent the company’s products or services. Filing for these protections require actions that include a timeline, specific documentation and fees. Without legal advice to ensure that the process is completed correctly, a company may forfeit its right to collect damages if theft occurs. Trade secrets are also assets that a company should safeguard carefully through the proper legal channels. This often involves professional advice on the drafting of employment contracts such as non-compete and non-disclosure agreements. These prevent an employee from leaving the company and using sensitive information to join or start a rival business. This is not a complete list of legal issues that a company owner could encounter. Seeking the advice of a legal professional at the outset of starting a business and maintaining that relationship going forward may be the best way to prevent liability and litigation.