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Business Law And The Need of a Lawyer and an Accountant

Business Law

Business law deals with the creation of new businesses and the issues that arise as existing businesses interact with the public, other companies, and the government. This area of the law draws on a variety of legal disciplines, including tax law, intellectual property, real estate, sales, employment law, bankruptcy, and others.

Business law attorneys specialize in transactional work, meaning they do not represent clients in court. In fact, business lawyers are often hired for the purpose of avoiding future litigation. An enforceable system of business laws also benefits the economy as a whole and provides for more efficient transactions. For example, a supplier who sells goods on credit can be confident that the buyer will held to the agreed payment terms. As long as the contract is drafted and executed in accordance with the Uniform Commercial Code (UCC) adopted in that jurisdiction, the supplier knows ahead of time it will be able to enforce the contract against the buyer if necessary.

Business Formation and Internal Agreements

New companies must take steps to comply with the law even before opening their doors for the first time. Business law attorneys are routinely asked to form new entities on behalf of their clients by filing the necessary documents with the Secretary of State. Clients may also need assistance choosing the business entity best suited for their enterprise.

Businesses can be formed as corporations, limited liability companies (LLCs), partnerships, and other entities. Most of these business forms can be further customized to meet the needs of the company. Examples include corporations formed as S-corps in order to achieve tax savings, and partnerships formed as limited partnerships to allow some owners to participate as investors only.

While the selection of the appropriate business entity will depend on numerous factors, the primary purpose of most entities is to shield owners from individual liability. Operating a business that is not set up to provide limited liability means that the owners are putting all of their personal assets within reach of the business's creditors. By working with an attorney at the inception of the business, this situation can easily be avoided.

Business law attorneys are also available to draft the internal agreements that will control how a new company is managed. A common example is an LLC operating agreement. This document should be drafted with care, as it governs how the company's owners will share profits and losses, make important business decisions, and transfer their ownership rights.

Navigating Complex Transactions

Some commercial transactions are within the ability of business owners to handle on their own. Others are not, especially when a deal touches on complicated and evolving areas of the law, such as securities regulation or internet commerce. In heavily-regulated industries in particular, companies rely on their in-house or hired lawyers for advice regarding the latest legal developments affecting their businesses.

Even for savvy business people, problems can develop when emotions become involved. Attorneys can provide valuable insight into a transaction, not only because of their legal training, but also because of the objective nature of their analysis. This allows them to spot issues overlooked by business owners and managers who may be too emotionally invested in seeing the deal go through.

Preemptive Measures to Avoid Litigation
One way to distinguish business law as its own field of practice is to take note of when these issues arise. Business law provides rules and guidance for companies to follow before disputes occur. Attorneys who practice in this area are experts at structuring transactions to minimize the company's exposure to litigation. This sort of strategic legal maneuvering can end up saving the company huge amounts of money.

Consider the example of a services company headquartered in one state, with customers all across the nation. The company might hire a lawyer to draft customer agreements that require customers to follow specific dispute procedures, such as giving the company an opportunity to remedy deficient services before a legal claim is made, or providing that disputes must be submitted to arbitration in the company's home state. In every industry, there are opportunities for business attorneys to save their clients money and provide them with a greater competitive advantage.

The Importance of  a Lawyer and an Accountant When Buying or Selling a Business

When buying or selling a company, it is important to have experts to back up the owner during these transactions. A lawyer is needed for interactions, contracts, documentation and various transactions, but an accountant is necessary for the financial data, numbers and funds either being obtained or when buying a new business.

The Need for an Accountant

An accountant may assist in analyzing reports, statements and issues that may be complicated. The accountant has knowledge if equipment has been purchased or leased and other assets are on hand. This is essential when selling the company so the new owner is aware of what items exist in the inventory.

The professional may compare debt to income, future and past data and explain these matters. When buying a new company, the accountant may have detailed documents about the company structure so that tax situations may be understood, how much in liabilities are accrued and what assets exist to assist with the purchase. He or she could help with business plans and help in determining the actual and perceived value of the company so that an asking price may be determined more easily.

The Need for a Lawyer

When buying a business This is to ensure that due diligence is performed and all factors are considered when purchasing the new company. This means understanding assets, liabilities and equity in the business and knowing what conditions may be applied to the contractual sale.

Drafting contracts and editing the terms is necessary when sealing a deal with the seller. This may even mean negotiating with the seller or his or her lawyer to ensure the best terms are attached to the arrangement. The lawyer may need to contact state officials, file documents with certain agencies and obtain licenses when buying a new company. It is his or her job to protect the owner from litigation, liability and legal injury when buying or selling a company.

With a business lawyer, it is possible to achieve success. When buying a business, the lawyer may have more work than when selling. This is to ensure that due diligence is performed and all factors are considered when purchasing the new company. This means understanding assets, liabilities and equity in the business and knowing what conditions may be applied to the contractual sale. Drafting contracts and editing the terms is necessary when sealing a deal with the seller. This may even mean negotiating with the seller or his or her lawyer to ensure the best terms are attached to the arrangement.

The lawyer may need to contact state officials, file documents with certain agencies and obtain licenses when buying a new company. It is his or her job to protect the owner from litigation, liability and legal injury when buying or selling a company. With a business lawyer, it is possible to achieve success. 

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