Questions to Ask an Attorney When Starting a Business
Questions for a first meeting with a business attorney, covering fees, choice of entity, co-founder terms, contracts, hiring, and which legal work you can reasonably handle yourself.
The questions
Open any question for the note
Do you work with businesses at my stage, and who else in the firm would touch my file?
Why ask it
A firm built around funded companies may not be interested in a first year of work, and a solo practitioner may not have the bench for a financing. Ask for examples of clients your size, and meet whoever will actually answer your emails.
How do you bill: hourly, flat fees for formation, or a monthly arrangement?
Why ask it
Formation is often quotable as a flat fee while everything after it is hourly, which is where budgets break. Ask what a typical first year costs for a business like yours and what triggers a large bill.
Given how I plan to make money, which entity would you set up and why?
Why ask it
Push past the label to the reasons: liability, self-employment tax, whether you plan to bring in investors, and how profits reach you. An answer that recommends the same structure to everyone has not accounted for your situation.
Where should I form, and where do I have to register to operate?
Why ask it
Forming in another state and operating from your own usually means registering in both and paying both, which surprises people who followed advice written for venture-backed companies. Ask what your case actually requires.
What licences and permits does my specific business need, and who files them?
Why ask it
Requirements are often local rather than state level: a city business licence, zoning approval, a health or trade permit, sales tax registration. Ask which ones they handle and which they expect you to file.
My co-founder and I have been splitting things informally. What should be in writing before we go further?
Why ask it
Undocumented partnerships fail badly, because there is no agreed answer to who owns what when someone leaves. This is the single most valuable hour to spend with a lawyer in the first year.
How should ownership vest, and what happens if one of us walks away in six months?
Why ask it
Without vesting or a buyback, a departing founder keeps their full stake and you keep the work. Ask what is standard and what a court in your state would do with the arrangement you have now.
What do I own, and what could my current or former employer claim?
Why ask it
Employment agreements, assignment clauses, and work done on a company laptop all create exposure. Bring the contract you signed, because this is the risk most founders discover at the worst possible time.
Does my name or logo create a trademark problem, and should I be filing?
Why ask it
A conflict found now costs a rename; found in two years it costs a rebrand and possibly a claim. Ask what a search covers, what registration costs, and whether it is worth it at your stage.
Which of my agreements should be reusable templates, and which need drafting each time?
Why ask it
Paying for a bespoke contract for every small customer is a waste, and using a downloaded template for a major deal is a risk. What you want is the boundary between the two for your kind of work.
In my customer contract, what limits what I owe if something goes wrong?
Why ask it
Ask them to point at the clauses: liability cap, warranty terms, indemnity, termination. If you cannot identify your worst-case exposure under your own contract, you do not know what you have signed up to.
Are my first hires employees or contractors, and what happens if I get that wrong?
Why ask it
Misclassification carries back taxes and penalties, and the tests are stricter than most founders assume. Ask what specific facts about the role decide it, not just the general rule.
What do I have to do about payroll, workers' compensation, and required notices?
Why ask it
Hiring one person triggers a set of registrations and postings that vary by state. Ask for the checklist and who does each item, because these obligations start with the first paycheck rather than the first review.
What do I need to do to keep my personal assets separate from the business?
Why ask it
The protection an entity gives can be lost by mixing funds, signing personally, and skipping records. Ask specifically what will pierce it, since founders usually do all three without realising.
What insurance would you expect a business like mine to carry?
Why ask it
General liability, professional liability, and cyber coverage each answer a different failure, and some customers will require proof before signing. Attorneys see which claims actually arrive in your industry.
What privacy rules apply to the information I collect?
Why ask it
Obligations depend on where your customers live and what you collect, and they can apply to a small business with a mailing list. Ask what your published policy has to say and whether it currently matches what you do.
If I take money from friends or family, what has to be documented?
Why ask it
Informal money creates disputes and can breach securities rules even between people who trust each other. Ask what a loan versus an investment looks like on paper and what disclosure is required.
What corporate housekeeping do I have to keep up each year?
Why ask it
Annual reports, franchise taxes, registered agent details, minutes, and share records. Missing them can dissolve the entity administratively, which is a discoverable problem during a sale or a loan application.
What are the two or three legal mistakes you see most in businesses like mine?
Why ask it
This gets you their pattern recognition rather than a checklist, and the answers tend to be specific to your industry. Whatever they name, ask what fixing it costs before and after it happens.
What can I do myself, and when should I call you?
Why ask it
A useful answer names the DIY items, such as filings and small contracts, and the trigger points, such as a first employee, an investor, or a demand letter. Reluctance to give any of it away tells you how the relationship will feel.
Working with a business attorney early on
Practical guidance for the conversation itself
Before the meeting
Write down how the business makes money
Who pays you, how much, how often, and what you promise them. Almost every legal question, from entity choice to contract terms, follows from this, and a paragraph of it saves an hour of billed questioning.
Bring the paperwork that already exists
Your employment agreement from your last job, anything you and a co-founder have signed or emailed about ownership, any contract you have already given a customer, and any name you are using publicly.
Decide what you need in the next ninety days
Formation, a founder agreement, a customer contract, and a first hire are separate jobs with different urgency. Sequencing them keeps the first invoice proportionate to the stage you are at.
Where legal money is well spent
Anything about ownership between people
Founder splits, vesting, what happens on departure, and how a deadlock is broken. These are cheap to agree while everyone is friendly and ruinous to litigate afterwards.
The contract you will use hundreds of times
One well-drafted customer or services agreement pays for itself. A bad clause in a template you reuse is a bad clause in every deal you sign.
The first person you hire
Classification, offer terms, and intellectual property assignment are worth getting right once, then reusing. Fixing them retrospectively means renegotiating with someone who now has leverage.
Common early mistakes
Copying the structure of a company you read about
Advice written for companies raising venture capital often does not fit a business that intends to be profitable and stay privately owned. Say which one you are so the advice matches.
One bank account for everything
Paying personal costs from the business account undermines the liability protection you formed the entity to get, and makes bookkeeping and tax filing far harder than they need to be.
Verbal agreements with people you trust
The problem is not bad faith, it is that two people honestly remember different terms two years later. Short written confirmations are enough for most of it.
Waiting for a problem before making the call
Legal advice is cheapest before a document is signed or a person is hired. Once a demand letter has arrived you are paying for defence rather than prevention.