Salt Lake City Business Law 101: What to Know
Starting and running your own business in Salt Lake City comes with its fair share of legal responsibilities. Understanding business formation is essential, as it lays the groundwork for business organization in the state of Utah. Salt Lake City business law encompasses business formation or dissolution actions, mergers and acquisitions, contracts, employment law, trademark law, and asset protection.
If you don’t have the right legal protections in place, business disputes and litigation can quickly become a costly distraction for your business. Even small oversights—like not putting necessary clauses in business agreements or failing to structure your business properly—can lead to major legal headaches down the road.
When Do You Need to Hire an Attorney for Your Business?
Knowing when to hire an attorney for your business is important for ensuring compliance and avoiding legal pitfalls. If you’re considering a merger or acquisition, it is a good idea to engage a skilled business lawyer from a reputable law firm. Mergers and acquisitions often require meticulous attention to corporate governance rules and business transactions. For matters like intellectual property or business litigation, consulting with business law attorneys can help you ensure your company’s best interests are protected. Local lawyers in Salt Lake City can also assist with business entity formations and drafting articles of incorporation.
For single-owner businesses, you typically don’t need an attorney to start your business. However, as your business grows, the need for legal services becomes more pronounced, especially in areas like tax law and contract law. Having a Utah business lawyer on board can help protect your business from potential legal pitfalls, like business disputes or non-compliance with local laws. While hiring a business attorney in Utah does come with a cost, it’s an investment that could save you a lot of money and headaches down the road by preventing costly legal problems before they arise.
Sole Proprietorship, LLC, S Corp? Nonprofit or L3C—Where to start?
Choosing the right legal structure for your business can be confusing. Sole Proprietorship, LLC, and Corporation are some of the most common business structures to consider when starting a business in Utah. Even in law school, an entire semester on LLCs, Corporations only scratches the surface. You may also have heard the terms S Corp and C Corp. Those do not identify legal entities, but taxation elections that can be made by either Corporations or LLCs.
For solo entrepreneurs, a sole proprietorship or single-member LLC is often the easiest route. If you’re already running a sole proprietorship, you can easily convert your sole proprietorship to an LLC. However, if you have business partners, expect to earn over six figures in your first year, or plan to raise money from investors, things can get trickier. That’s when you’ll want to talk to a Salt Lake City Business Lawyer to make sure you’re building a solid legal foundation for your business. For those interested in forming a nonprofit or Low-Profit Limited Liability Company (L3C), it’s essential to consult with an experienced business lawyer in Salt Lake.
Company Formation Documents (e.g. Operating Agreement)
When you start a business, the specific paperwork you need depends on the type of entity you choose. For a sole proprietorship, you’ll need to file a “doing business as” (DBA) name. For an LLC, you’ll need to file Articles of Organization and create an Operating Agreement, which should include succession planning and ownership transfer provisions to prevent issues like early dissolution. Without proper planning, unexpected events such as the death of a member can threaten the perpetuity of the LLC. Learn more about what happens when an LLC member dies and why proper planning is essential.
Corporations need Articles of Incorporation, bylaws, and possibly a shareholder or buy-sell agreement if there are multiple owners.
Common Contracts Every Business Needs
There are a few contracts you’ll need when you’re starting a business.
- NDA (Non-Disclosure Agreement): An NDA is a contract that keeps sensitive business information confidential between parties.
- Terms of Use/Privacy Policy: This depends on what your website does. If it’s just a very basic site, a simple template might be enough. But if you’re selling products or services, especially without using a streamlined platform to do so (like Shopify), it’s probably worthwhile to get some legal help to customize your Terms of Use and/or Privacy Policy.
- Services Agreement: This is the contract you’ll use for independent contractors or freelancers. It’s important to set clear terms upfront.
- Lease: If you’re renting a commercial space, having an attorney review the lease is a good idea, especially if it’s a high-dollar amount. If you’re in a coworking space, it’s usually straightforward since the landlord provides the lease.
While templates seem functional for many of these contracts, it’s always a good idea to work with a business attorney to fully customize it to your requirements.
Trademark Issues Related to Choosing a Business Name
Many new business owners don’t realize the trademark issues they might face right from the beginning. Even if your business name is available when you register, it doesn’t mean it’s not already protected by another company’s trademark. Always check to make sure you’re not unintentionally infringing on someone else’s trademark.
Contact Watts Law Salt Lake City business lawyers today
At Watts Law, I’m dedicated to empowering my clients with the knowledge they need. Contact me to schedule a free consultation where we can discuss your needs and how I can assist. My experience as an expert business lawyer in Salt Lake City business law has guided many business owners through even the most complex legal challenges.