Legal Do’s And Don’ts For Small Businesses by Alan S. Kopit, legal editor of lawyers.com (NAPSA)—Doinga little legal legwork is an important first step in starting a small business. That’s because there are a numberof different ways entrepreneurs can suc- ceed. Before taking the plunge into entrepreneurship, consider: Business Form Selection An entrepreneur must decide the best legal form for his or her new enterprise. Different forms carry different costs, and each has various legal and financial ramifications. Consider: A sole propri- cere <=, / . \ etorship is the most basic business form, where one person owns the business and is personally responsible for all businessdebts. Kopit A corporation is formed by filing certain documents in the state of the new business. In this business form, only the shareholders’ investments in the business are at financial risk, not their personal assets. Employment Issues Employment agreements help businesses keep key employees. Theyprovide other benefits as well: The agreements can assist in the protection of the firm’s trade secrets by requiring the employee to protect such information. The agreements can provide that if an employee leaves your business, he or she won’t compete in the samefield for a specified period. Exit Strategies The time to consider your exit strategy from any businessis at its inception. Remember: * Decide if your goal is to ulti- Legal Issues Small Business Owners Must Address Whatis the correct legalform for my business? Should it be a sole proprietorship, partnership, corporation or someother type of entity? Will | need employment agreements with my salesstaff? How abouttop management? Someonein a new position? Do | need to register a trademark or patent to protect my product? If | create analliance with another company, what legalsteps do | need fo take to protect my business? How can | make sure my business’ operations comply with state, federal and local laws? @ mately sell the business, take it public or plan for an appropriate business succession. Each plan has tax issues to consider. If you do not have an exit strategy, you mayfind it difficult to attract investors, who want to know how and whentheyare getting their money back. You can find morelegal tips and business information in a free booklet called Getting Started On Your Legal Legwork. It’s available at www.lawyers.com/lawyers/hand book.php. Search lawyers.com’s free database of 440,000 attorneys and firms worldwide to find an attorney to answer your small business questions. Alan S. Kopit is the author of Getting Started On Your Legal Legwork. Heis also the legal editor for lawyers.com, where he answers questions on consumer and small business legal issues. In addition to his law practice, Kopit is a regular contributor to NBC-TV’s Today show.
