{"id":12227,"date":"2021-05-18T10:21:57","date_gmt":"2021-05-18T15:21:57","guid":{"rendered":"https:\/\/legaltalktexas.hammerle.com\/?p=12227"},"modified":"2025-06-18T17:01:46","modified_gmt":"2025-06-18T22:01:46","slug":"8-questions-small-business-owners-should-ask-their-attorney","status":"publish","type":"post","link":"https:\/\/hammerle.com\/legaltalk\/business-law\/8-questions-small-business-owners-should-ask-their-attorney\/","title":{"rendered":"8 Questions Small Business Owners Should Ask Their Attorney"},"content":{"rendered":"

If you\u2019re an entrepreneur trying to get your small business off the ground, it\u2019s important to meet with a <\/span>small business attorney<\/span><\/a> to help navigate complex legal issues and minimize future risks. As you prepare to speak with an attorney, here are several important questions to keep in mind.<\/span><\/p>\n

1. How Do I Limit My Personal Liability as a Business Owner?<\/span><\/h2>\n

The best way to limit your personal exposure to liabilities generated by your small business\u2019s activities is to form a business entity with the Secretary of State. Once formed, your entity provides you protection from liabilities generated by your business. As such, your business\u2019s creditors are limited to the assets held within the business and cannot reach your personal assets.<\/span><\/p>\n

2. How Should I Structure My Business?<\/span><\/h2>\n

For most small businesses the <\/span>limited liability company or S-Corporation entity forms<\/span><\/a> will work well.\u00a0 These two <\/span>entities<\/span><\/a> are called \u201cpass-through entities\u201d as the small business itself does not pay any tax to the IRS.\u00a0 Instead, the income tax generated by business activities are passed through to the owners.\u00a0 This avoids a double taxation situation where the small business pays an income tax and the owners pay a tax on the same earnings when such earnings are distributed out of the company.<\/span><\/p>\n

3. How Should I Establish Ownership Responsibilities?<\/span><\/h2>\n

The deciding factor here is how active each of the owners will be in the day-to-day operations.\u00a0 The ownership of a corporation is allocated by shares of stock.\u00a0 These shares allow the stockholders to vote for the board of directors.\u00a0 Then the board sets the direction of the corporation and appoints the officers who run the day-to-day operations.\u00a0 This is great for less active owners.\u00a0 For owners who actively run the business, a limited liability company may work better.\u00a0 The LLC is less regimented and allows for owners to directly operate the business.<\/span><\/p>\n

4. What Should Be Included in the Bylaws or Company Agreement?<\/span><\/h2>\n

A corporation\u2019s bylaws and an LLC\u2019s company agreement set out the internal rules governing the interaction between the owners, officers, and managers.\u00a0 These documents should contain all specific details for the roles, responsibilities, and relationships among the various parties.<\/span><\/p>\n

5. What Compliance Practices Does My Business Need to Adhere to?<\/span><\/h2>\n

This will depend heavily on what type of business you are running.\u00a0 Some services and products are more regulated than others.\u00a0 Local businesses like liquor stores and barber shops are regulated by the state and require licenses to operate.\u00a0 Also, if you have a physical location you may also be subject to federal regulation under the American\u2019s with Disabilities Act or the Occupational Safety and Health Administration.<\/span><\/p>\n

6. What Types of Insurance Will My Business Need?<\/span><\/h2>\n

Again, this will depend on the type of business.\u00a0 If you have a physical space or automobiles, you will want to obtain general liability and automotive insurance.\u00a0 This type of coverage may even be required by your lenders or landlords.\u00a0 You may also want to consider business interruption insurance to protect against events that can temporarily depress your revenues \u2013 like tornados or weather-related power outages.<\/span><\/p>\n

7. What Contracts Does My Business Need?<\/span><\/h2>\n

Your <\/span>business should have a contract<\/span><\/a> with most of the people and businesses it engages with.\u00a0 Examples of the types of contracts include:<\/span><\/p>\n