Guest Post by Melissa Woodson, community manager for Washington University in St. Louis (learn more about Melissa at the end of this article).
The numbers don’t lie: Women in the United States start businesses at a higher rate than men and are expected to create over half of the jobs in small business by 2018, Forbes recently noted. The article “Entrepreneurship is the New Women’s Movement” also highlights the fact that many women embrace business ownership as a way to align their values and work life.
For women business owners, an attorney can be a valuable business counselor who can reduce the risks to their business and protect all the hard work that goes into it. Here are a few of the common events in which an attorney can be an important ally in your quest to establish, run and grow your business.
Setting Up a Business
There are many different ways to set up a new business. Each choice brings with it different legal and tax ramifications for the business owner. An entrepreneur could elect to be a sole proprietorship, corporation or limited liability company. If there is more than one person involved in the venture, a partnership or limited partnership might be an option.
The legal status of your business should not be a decision made lightly. It will impact whether liability for any accident or mishap is limited to your business assets or whether you are placing your personal assets at risk.
Taxes are also an important consideration. Whether a new business can elect to become an S corporation depends in part on its legal status — sole proprietorship, partnership or corporation.
Business succession should also be contemplated. If a business is a partnership, what are the rights of the partners and their families in the event a partner should die? If there is an impasse between business partners, how will the problem be solved?
Once a business is created, an attorney can assist with many other matters that, if not handled properly, can threaten the profitability and viability of the enterprise.
For example, a property lease represents a significant investment for most businesses. Leases are typically prepared by the property owner and contain many clauses favorable to the owner. A lawyer can examine the lease terms, provide advice on problematic provisions and suggest alternative language.
As a business grows, independent contractors and employees may be necessary. Because there are important legal differences between independent contractors and employees, and whether a business is subject to certain employment laws and unemployment taxes, a lawyer can help discern whether a hire should be categorized as an independent contractor or an employee, and prepare contracts and employment policies to protect your business.
Trade secrets, customer lists and intellectual property are items that bring value to a business and ensure its continued viability and profitability. Sometimes trade secrets can be leaked to competitors. Former employees may be tempted to take customer lists to create their own business. Designs, unique processes and packaging could be tempting targets for a competitor to copy. A lawyer can make sure intellectual property protections are put in place, help prepare non-compete clauses and prepare policies that make it clear that customer lists and trade secrets cannot be divulged to outsiders.
For women entrepreneurs, a new business represents turning a dream into a reality. A lawyer can help you address practical issues to help you protect your business and your dream.
Melissa Woodson is the community manager for Washington University in St. Louis’ @WashULaw, a top-tier online LLM in U.S. law as well as a contributor to the LLM guide. In her spare time, she enjoys running, cooking and making half-baked attempts at training her dog.