Starting a Business? You Need Legal Representation.

posted byBagasian LawOctober 28, 2020

Hiring legal representation is an inevitable step in ensuring the success and security of your business.

Starting a business is exciting and, with the right support and decision making, can be extremely lucrative.

However, there are also many legal implications when starting a business, from establishing a business structure to drafting contracts .

In this article, you will learn about:

The Importance of Legal Representation When Starting New Business

There are many reasons why legal representation is crucial when starting your own business. They include:

If the Business Was Created by Co-Founders: When more than one person has stakes in the business, especially if both party’s intellectual property contributed to the creation of the business, it is crucial to have the stakes defined contractually.

For example, what percentage of the company belongs to each founder needs to be clearly defined.

Protecting Intellectual Property: Intellectual property is an original creation or development.

A new business is inherently creating something new for the market, but defining that those ideas arose from the creators of the business is crucial.

There are multiple legal ways to protect intellectual property. They include:

  • Patent: Patents allow the owner of the business to inhibit anyone else from replicating the intellectual property of that business. The best-known example is a design patent.

  • Trademark: Trademarks protect a business’s logo, color scheme, or other designs representative of the company.

  • Copyright: Copyright ensures that the creator of a tangible piece of work, from music to writing, owns the rights to that property.

  • Trade Secret: Trade secrets are secrets that are particular to a business. Legal representation can help define and protect these trade secrets.

Drafting Contracts

Every business requires the creation of contracts, whether they are between a business and its employees or a business and external clients.

Contracts tend to have complex legal jargon not easily understood by those who have not studied the law.

Not only will legal representation help with drafting contracts, but it will also help with ensuring all contracts that a business engages in are fair.

Deciphering Taxes

Tax laws are always changing, and a business owner, not a lawyer, keeping up with these changes is not an easy task.

Therefore, getting legal representation when starting a business is imperative to prevent any tax issues in the future.

For example, knowing what tax deductions your business qualifies for helps prevent overpaying in taxes.

How Legal Representation When Starting a Business Helps with Understanding the Implications of Business Structures

Different business structures , such as LLCs (limited liability companies), LPs (limited partnerships), LLPs (limited liability partnerships), to name a few, have different legal implications.

When starting a business, legal representation will not only help you navigate these different business structures but also help you choose one that will best represent and benefit your business.

Let’s go more in-depth about each type of business structure .

The first type of business structure is a sole proprietorship, which is for a business run and created by a single person.

The next type of business structure is a partnership that is for a business run by multiple people.

A business can be either a general partnership that assumes that all partners are liable or a limited partnership, which assumes that there are both general partners and limited partners. Limited partners serve as investors and are not held to the same standards of liability.

Additionally, a business can be structured as a corporation, meaning the company itself is liable while its owners are not. However, corporations have greater tax requirements and are held to a different standard of liability.

A variation of the corporation is an S corporation, which is a corporation of “100 shareholders or less,” and is, therefore, taxed as if it is a partnership. However, a company must fit within parameters to be labeled as an S corporation.

Finally, a business can be structured as an LLC, or a limited liability company. LLCs are often described as both a corporation and a partnership. In an LLC, owners have “limited liability,” as the name suggests, but pay fewer taxes than a corporation would.

How Legal Representation Ensures Accurate Legal Documentation

There are also numerous legal documents needed to start a business.

However, this differs by state. When starting a business, a lawyer can advise on the following documents:

  • Articles of Organization: To form an LLC (limited liability company) in California, a business must file an Articles of Organization Form along with other paperwork.

  • Statement of Organization (SOI): An SOI details the services that your business provides and must be filed 90 days before your articles.

  • Operating Agreement: An operating agreement is used by LLCs to describe how the business is being managed and defines rules and regulations that guide decision making and management.

  • Limited Partnership Set-Up: A Limited Partnership (LP) is for businesses created by two or more people. It ensures that each person is only liable relative to how much they have invested in the business.


Starting a business requires fulfilling numerous legal requirements. Hiring legal representation ensures your business is established legally.

From drafting contracts to understanding tax laws, a lawyer will ensure the success and safety of your business.

Los Angeles-based lawyer, Alina Bagasian, will provide the best legal services for your business. Possessing an understanding of corporate and commercial business, Alina Bagasian is ready to represent your business and provide you with excellent legal advice.

The Law Offices of Alina Bagasian have achieved 100% client satisfaction, providing clients with unlimited advice, and offering eight different services to avoid any legal complications when starting a business.

Get the help you need today!

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