Business
Business Law for Entrepreneurs
Professional business law advice helps clients make sense of numerous choices facing businesses, from legal structures to governance documents, company policies, and more. Business clients have included store owners, real estate developers, fitness programs, and businesses that operate entirely online. Clients have sought advice on local rules in Washington, D.C. and Montgomery County, Maryland (e.g., Bethesda, Chevy Chase), as well as laws for e-commerce and online transactions.
Choosing a Legal Structure for Your Business
Every business has a legal structure. By default, if you file no paperwork, your business is considered either a sole proprietorship or a general partnership. To limit your personal exposure as the business grows and potentially increase future profits, you will need to file paperwork with the government. That is where Paul comes in. With years of experience helping companies get started from the ground up, he can help clients choose from the following legal entities in D.C. and Maryland:
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Each legal entity has unique advantages and disadvantages in terms of taxes and liabilities. Moreover, different entities give owners different rights, reporting requirements, and protections when conducting business deals and making strategic decisions. The type of legal structure you choose may also affect your underlying business purposes. For example, a B Corporation allows leadership to be socially responsible even at the cost of profit.
Consulting an attorney early in the process of starting a business can help you pick the most favorable and tax-friendly structures, as well as avoid many potential problems down the road. While for some businesses it makes sense to become LLCs or corporations right away, others can benefit from waiting until they are prepared to expand or engage in commercial activity across state lines, such as doing business over the internet. An attorney can help you decide when the time is right to take the next legal step, based on your business circumstances.
Consulting an attorney early in the process of starting a business can help you pick the most favorable and tax-friendly structures, as well as avoid many potential problems down the road. While for some businesses it makes sense to become LLCs or corporations right away, others can benefit from waiting until they are prepared to expand or engage in commercial activity across state lines, such as doing business over the internet. An attorney can help you decide when the time is right to take the next legal step, based on your business circumstances.
Operating and Partnership Agreements
When forming an LLC or partnership, it is highly recommended (and in some jurisdictions required by law) that you create an agreement that sets forth how the organization will be classified for tax purposes, how the organization will operate, and the respective duties and powers of the partners and managers, in order to avoid conflict later on.
In the case of an LLC, the agreement is called an operating agreement. In the case of a non-LLC partnership, this type of agreement is called a partnership agreement. The agreements effectively serve many of the same purposes.
If you do not have an agreement, then your organization will be bound by default statutory provisions of the District of Columbia or Maryland (or other relevant jurisdiction), which may not be to your liking in key respects. Once you are locked in to the default statutory provisions, you can only make changes if enough members of your organization agree.
The good news is that many default provisions can be overridden by a well-crafted agreement that takes into account the unique nature of your business and your personal preferences. By creating an agreement early, you decide from the onset what your business’s operations will look like, rather than improvising and hoping for last-minute consensus.
For a sizeable percentage of clients, another key reason to have an operating agreement in place early is asset protection. The most effective asset protection strategies often rely on non-default rules that can only be established via an agreement of the owners.
Moreover, in the event of a legal dispute, courts frequently look to operating and partnership agreements to glean insights about the nature of the business. Sometimes, the outcome of a case hinges on the content of an agreement and the conclusions that a court draws on that basis. Paul has helped clients resolve disputes that could have been avoided with an effectively worded agreement; and he can help clients avoid many common problems.
In the case of an LLC, the agreement is called an operating agreement. In the case of a non-LLC partnership, this type of agreement is called a partnership agreement. The agreements effectively serve many of the same purposes.
If you do not have an agreement, then your organization will be bound by default statutory provisions of the District of Columbia or Maryland (or other relevant jurisdiction), which may not be to your liking in key respects. Once you are locked in to the default statutory provisions, you can only make changes if enough members of your organization agree.
The good news is that many default provisions can be overridden by a well-crafted agreement that takes into account the unique nature of your business and your personal preferences. By creating an agreement early, you decide from the onset what your business’s operations will look like, rather than improvising and hoping for last-minute consensus.
For a sizeable percentage of clients, another key reason to have an operating agreement in place early is asset protection. The most effective asset protection strategies often rely on non-default rules that can only be established via an agreement of the owners.
Moreover, in the event of a legal dispute, courts frequently look to operating and partnership agreements to glean insights about the nature of the business. Sometimes, the outcome of a case hinges on the content of an agreement and the conclusions that a court draws on that basis. Paul has helped clients resolve disputes that could have been avoided with an effectively worded agreement; and he can help clients avoid many common problems.
Corporate Bylaws
The purpose of corporate bylaws is to codify the internal rules of your organization. Well-written bylaws can streamline company processes so that your business runs smoothly and leadership can focus on meaningful matters. The bylaws also help create accountability through well-defined leadership roles and expectations for company stakeholders.
The bylaws of a corporation will often be the primary way your company balances the interests and respective powers of the board of directors, corporate officers, investors, management, employees, clients/customers, and other parties. How detailed a given organization’s governance documentation needs to be will depend on the specific activities and purposes. Closely held companies will often have different governance considerations than companies that are publicly traded with high frequency.
Common features of corporate bylaws include a statement of whether the corporation issues stock and if so what type; the number of officers and directors; the record-keeping and inspection policies; the procedures for holding meetings; the rights of shareholders and other parties; and the process for amending the corporate bylaws or articles of incorporation.
Bylaws are open-ended documents and can contain many other provisions, such as indemnification from liability provisions; employee policy, how to handle conflicts of interest, communications with the media or third parties, and other considerations which an attorney can advise on.
The bylaws of a corporation will often be the primary way your company balances the interests and respective powers of the board of directors, corporate officers, investors, management, employees, clients/customers, and other parties. How detailed a given organization’s governance documentation needs to be will depend on the specific activities and purposes. Closely held companies will often have different governance considerations than companies that are publicly traded with high frequency.
Common features of corporate bylaws include a statement of whether the corporation issues stock and if so what type; the number of officers and directors; the record-keeping and inspection policies; the procedures for holding meetings; the rights of shareholders and other parties; and the process for amending the corporate bylaws or articles of incorporation.
Bylaws are open-ended documents and can contain many other provisions, such as indemnification from liability provisions; employee policy, how to handle conflicts of interest, communications with the media or third parties, and other considerations which an attorney can advise on.
Drafting and Legal Review of Communications
As a business leader, you probably know that communications can have unintended legal consequences which affect the valuation of your business and its capacity for future growth. Having a lawyer carefully draft or review communications can be of great value to businesses of all sizes. Whether you are publishing a new advertisement, issuing a press release, writing a letter to a government official, or delivering remarks or to your own employees, every word is meaningful.
In his career as a lawyer, Paul has drafted and edited communications for representatives of major industry trade groups and corporations. He can evaluate the communications issued by your organization for consistency with laws that confer advantages, such as liability protections, in both the District of Columbia and Maryland.
In his career as a lawyer, Paul has drafted and edited communications for representatives of major industry trade groups and corporations. He can evaluate the communications issued by your organization for consistency with laws that confer advantages, such as liability protections, in both the District of Columbia and Maryland.
