When will my new small business need a lawyer?

Setting the right foundations for your business may require legal help. Make sure that you know when to turn to a small business lawyer.
An image of a lawyer signing a contract for a new small business.

Let’s be honest, no one dreams about going to see a lawyer. We get it. It’s one step worse than going to see a mechanic, but not as bad as going to the dentist, so I guess we’re lucky. Lawyers have a reputation of being expensive, formal and sometimes painful – although they do stop short of pulling your fillings out.

What we’ve found though is that very often entrepreneurs don’t fully know what lawyers do or when they need to go see a lawyer. And for good reason – running a business is hard and in an era of self-help services, we often try to do what we can ourselves before paying others to do it. 

With that in mind, here are a few aspects of your small business where a lawyer can help.

Business Structures

Every business needs a business structure. Your structure is like the land on which your business (the house) sits. There are a few options for a basic structure, such as a sole proprietor or private company, and structures can get very complicated the bigger a business gets.

The best advice is to start simple. Play the hand that’s in front of you and don’t create a structure for the business you imagine you can be, rather structure your company for what your business is. South African law is geared toward people running businesses through private companies. So provided you’re not a sole proprietor, registering a company and running your business in that way is a good place to start. 

There is lots to read online on this topic (see the Get Started guide for more).

Business partners

Your business partners have an interest in your business. This means that they co-own a part of your business, and that’s a commitment more binding than marriage. The trick here is to manage your relationship with your partners. 

Relationships are managed in two ways – through building trust and through binding agreements. Both are necessary and neither is sufficient alone. Of course, it’s possible to do this yourself by having an open and frank conversation about your business interests and obligations and then putting that down onto paper. However, lawyers are useful because they can help you think through the issues and decide on fair terms and processes.

Employment

Employing in South Africa can be complicated, but there are also a lot of rumours about the complexity too. Employment in South Africa is governed by a strict set of regulations: the Labour Relations Act and the Basic Conditions of Employment Act. If you’re going to hire staff, the best thing you can do is to get an understanding of these regulations and to codify your relationship in an employment contract. If you’re struggling to understand the legislation, then book a consultation with a small business lawyer to talk you through it and check out the Legalese store for an affordable way to get a tailor-made employment agreement.

Clients

No business can succeed without clients. In fact, one would argue that without clients it’s not a business. Managing your relationship with your clients is incredibly important to avoid the age-old issues of non-payment, damage of goods, poaching employees and the rest. The bigger your business, the bigger the chance of things going wrong. 

So if your deal size is reaching a level that the risk is pretty grown-up, then it’s time to go and see a lawyer who can help you with your small business. The best way to manage your client relationship is through terms of engagement or if you have an online business, then through your website terms. We’ve tried to make this process as easy as possible on the Legalese Store.

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