One of the worst things that may happen to a fledgling company is making the mistake of not keeping properly documented records about all relationships involved in the business from day one. This observation also applies to the early start-up stages as well.
"While it's natural to be rather informal at the beginning, who knows what value the company will really have later. The value of the company later is the crucial key here and means that hiring a lawyer at the beginning of the start-up process for a company is a wise investment move for all concerned," states Los Angeles Business Attorney Steven C. Peck.
Often investors feel it's not necessary to hire legal advice that early in the process. Unfortunately, it's this very time when the business is making crucial decisions that will affect their future that they "need" legal advice. They also need to be keeping good records of everything that happens during their start-up. No one knows when these records will come in handy.
Even though it's statistically likely that most company founders will do just fine during their start-up by not documenting everything they do, the chances are high that those who don't take this precaution will have serious problems later. "The facts are that without any documentation on the company start-up, the founders assume legal risk," Peck says.
For these reasons, it's a good idea to discuss the founding of the company with a competent Los Angeles business lawyer, setup the correct entity, review and edit agreements, properly explain to the clients' the possible worst case scenarios and plan for them accordingly, and make sure that the new entity has been properly advised of the legal ramifications pertinent to their particular start up company. Many of these same issues will appear upon the purchase or sale of a company, too. Document any and all transactions in writing, and when in doubt call your attorney immediately.
There are many other pitfalls that a good business lawyer will be able to outline to founders of a new business and steer them in the right direction to success. Hiring a lawyer early is one smart business investment.
Contact Steven Peck's Premier Legal toll free at 1.866.999.9085 to talk to an experienced California Business lawyer and visit us on-line at www.premierlegal.org
