Questions to Ask an Attorney When Starting a Business
These are questions to ask a business attorney at a first meeting about a new company, whether you are setting it up alone or with a co-founder. The 60 questions follow the order that meeting usually takes: the attorney and the fee, structure and registrations, owners and money, contracts and intellectual property, hiring, then the risks and upkeep that come after opening. They also work as questions to ask a lawyer about a small business that is already trading, and wherever an answer turns on your state or country, ask how it works there.
The questions
Each question, and why to ask it
The attorney
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.
Which parts of this would you handle yourself, and which would you send to another lawyer: trademarks, employment, tax?
Why ask it
Business attorney is a broad label, and few people handle formations, employment law and trademark filings equally well. A lawyer who names the edges of their practice and has people to refer you to is easier to trust than one who says yes to everything.
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. Find out which items on your list could be fixed-price, and get the hourly rate of each person who might work on the others.
What would you expect a first year of legal work to cost for a business like mine, and what would push it higher?
Why ask it
A range with its assumptions spelled out is more useful than a single figure. The things that move it tend to be a second owner, a first employee, a lease, and any contract drafted by the other side's lawyer, so say which of those you expect.
Who is your client here: me, the company, or all of the founders?
Why ask it
When several founders hire one lawyer, that lawyer may be acting for the company and not for any one of you. Find out where that leaves you if the owners later disagree, and whether each of you should have someone independent read the ownership terms.
What does your formation fee include, and what gets charged on top of it?
Why ask it
Packages differ: some stop at the state filing, others add the operating agreement or bylaws, the tax ID application and the first set of company records. Government filing fees and a registered agent are commonly billed separately, so get the total and not only the headline price.
If I email you a quick question, does every reply get billed?
Why ask it
New owners tend either to stop asking because every answer is invoiced, or to ask constantly and get a shock from the statement. Settle the smallest billing increment and whether a quick yes or no is charged, so you know which questions to save up for one call.
Have you set up businesses in my industry, and what did they need that a generic company would not?
Why ask it
Food, childcare, construction, health services and anything involving alcohol or moving money carry rules of their own. Someone who has done it before can list the industry-specific steps from memory, and that list is worth more than a yes to the first half of the question.
Can you run a conflict check against my co-founder, my landlord, my former employer and my main competitor?
Why ask it
Conflict checks are routine, but the firm can only run one against the names you supply. Hand over the list at the start, because a conflict discovered after work has begun can mean changing firms halfway through a formation.
Will you put the scope, the fees and what is not included in an engagement letter before work starts?
Why ask it
The letter is where the word formation turns into a list of documents and filings you can tick off. Read the exclusions as closely as the price: tax advice, trademark work and anything contested often sit outside it.
Structure
Given how I plan to make money, should this be a sole proprietorship, an LLC or a corporation, and why?
Why ask it
Push past the label to the reasons: personal liability, how the owners are taxed, whether investors are likely, and how profits reach you. The names and the options differ by state and country, and an attorney who recommends the same structure to every client has not weighed your situation.
What would make you change that recommendation in two or three years, and how hard is it to convert?
Why ask it
Structures can usually be changed, but the cost and the tax effect of converting depend on where you are and what the company holds by then. If the attorney already expects you to outgrow the first choice, starting with the second may be cheaper.
Where should I form, and where do I have to register to operate?
Why ask it
Forming in one state and operating from another usually means registering in both and paying fees in both, which surprises people who followed advice written for venture-backed companies. Tell the attorney where your customers, staff and premises will be, since those are what the answer turns on.
I have already been trading under my own name. What has to move into the new company, and how?
Why ask it
Customer contracts, the bank account, licences, the domain, equipment and any lease stay in your name until something transfers them. Bring a list of what exists so the attorney can sort it into items that need a signed assignment and items that only need a fresh application.
What should my operating agreement or bylaws cover, even if I am the only owner?
Why ask it
A sole owner is tempted to skip the internal document because there is nobody to disagree with. Banks, lenders and buyers often want to see it, and it is where you record who takes over decisions if you are unable to make them.
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. Leave with two lists, the ones the firm will file and the ones left to you, with any renewal dates beside them.
Can I run this from home, and do zoning rules, my lease or a homeowners association get a say?
Why ask it
Home businesses run into rules about visiting customers, signs, deliveries, parking and stored stock, set by the city and sometimes by a landlord or an association. Describe what will physically happen at the address, since a laptop business and a home bakery get very different answers.
Do I need a registered agent, and should it be me, your firm or a paid service?
Why ask it
The agent's address goes on the public record and is where a lawsuit or a state notice would be delivered. Acting as your own is allowed in many places and costs nothing, at the price of publishing your address and being reachable there in office hours, so check the rule where you form.
In what order should things happen: the filing, the tax ID, the bank account, the first signed contract?
Why ask it
Sequence matters because each step tends to need the one before it, and something you sign before the company exists may bind you personally. Get the order written down with rough timings, including how long the state is currently taking to process a filing.
Which of my questions belong to an accountant, and will you talk to mine before anything is filed?
Why ask it
Entity choice sits on the border between law and tax, and each adviser sometimes assumes the other has covered it. A short call between the two before the filing costs far less than undoing a structure or a tax election afterwards.
Owners and money
My co-founder and I have been splitting things informally. What should be in writing before we go further?
Why ask it
With nothing written, there is no agreed answer to who owns what when one of you leaves, and the law where you live may fill the gap with default partnership rules neither of you chose. For two founders this may be the most valuable hour of legal time in the whole 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 right, a founder who leaves early may keep the whole stake while the rest of you keep the work. Describe the arrangement you have now and get a plain account of what would happen under it today, before discussing what a better schedule looks like.
If two of us own half each, how do we get past a decision we cannot agree on?
Why ask it
Equal ownership feels fair on the first day and can freeze the company on a bad one. Options the attorney might describe include a casting vote on named subjects, an outside tie-breaker, or a clause letting one owner buy the other out by a set formula.
What happens to an owner's share if they die, divorce, become unable to work or go bankrupt?
Why ask it
Left unaddressed, you could find yourself in business with a spouse, an heir or a creditor you never chose. A buy-sell clause sets who may buy the share and how its price is worked out, and the rules behind it differ from state to state.
Who can sign contracts, borrow or spend above a set amount without the other owners agreeing?
Why ask it
Outsiders may be entitled to rely on any owner's signature unless the company's documents and its bank mandate say otherwise. Agree the limits as numbers, then check that the bank account is set up to match them.
How should the cash, equipment and unpaid work each of us puts in be recorded?
Why ask it
Contributions of different kinds are hard to compare after the fact: one founder's savings against another's eighteen months of evenings. Writing down what each counted for at the start, and whether any of it is a loan to be repaid, settles an argument that otherwise waits until there is money to argue over.
If I take money from friends or family, what has to be documented?
Why ask it
Money from relatives tends to arrive without anyone saying whether it is a gift, a loan or a share of the business, and selling a stake can fall under securities rules even between people who trust each other. Get the paperwork for each version explained, along with any filing or disclosure your state expects.
I may want outside investors one day. What should we set up now so that stays possible?
Why ask it
Investors tend to look for a clean ownership record, founder shares that vest, and intellectual property held by the company. You do not need a venture-style structure to keep those three tidy, and the attorney can tell you whether your entity type would have to change first.
A bank or landlord wants my personal guarantee. What exactly would I be agreeing to, and can it be narrowed?
Why ask it
A guarantee steps around the company and reaches your own assets, which is the very thing the entity was meant to prevent. Have the attorney read the wording before you sign: a cap, an end date or a release once the business has a track record is sometimes negotiable.
Can I promise an early helper a share or a cut of profits, and what is the right way to do it?
Why ask it
A percentage promised over coffee is easy to give and hard to define later: a percentage of what, from when, and does it survive the person leaving? There are several ways to put it on paper, each with different tax and control effects, so raise it before you make the offer.
Contracts and IP
I started on this while working for someone else. What could my current or former employer claim?
Why ask it
Invention assignment clauses, limits on side work, and anything built on an employer's laptop or time can each give an employer an argument, and how far it goes depends on the contract and the state. Hand over the agreement you signed, because the attorney can only answer this from its actual wording.
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. The details worth pinning down are what the search covers, what registration costs with and without the firm's fee, and whether filing makes sense before you have sales.
Does registering the company name or owning the domain give me any right to the brand?
Why ask it
People often assume a state name registration or a domain purchase works like a trademark, and in many places it does not. Have the attorney explain what each one protects where you trade, and what a competitor with an earlier claim to the name could make you do.
A freelancer made my logo, website or code. Does the company own it?
Why ask it
Paying for work and owning the rights in it are not always the same thing, and the default depends on the country and on what was signed. Bring the invoice or agreement, because a short written assignment is far easier to get now than after a falling-out.
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
The clauses that do this work are the liability cap, the warranty terms, the indemnity and the right to terminate, and you should be shown each one in your own draft. If you cannot say what your worst case is under your own contract, you do not yet know what you are offering customers.
What should my contract say about getting paid: deposits, due dates, late fees, and stopping work?
Why ask it
Payment terms are the clauses you will lean on most often and think about least in advance. Check whether the late fee or interest you have in mind is allowed where you operate, and whether you can pause work without becoming the one in breach.
If I sell online, what terms does the site need, and how do customers have to accept them?
Why ask it
Refunds, delivery, renewing subscriptions and digital goods all come with consumer rules that change with where the buyer lives. How the terms are presented can matter as much as what they say, so show the attorney the actual checkout screen.
What should my contracts say about where and how a dispute gets decided?
Why ask it
Court or arbitration, which state's law applies, and who pays the legal fees are pre-printed lines that nobody reads until there is a disagreement. For a small business, having to fight in a distant state can settle the matter before anyone looks at who was right.
A larger customer or supplier has sent me their standard contract. Which clauses would you read first?
Why ask it
You rarely get to rewrite a big company's paper, so the useful advice is which three or four terms to push on. Indemnities, automatic renewal, exclusivity, ownership of what you create, and how either side gets out are the usual candidates.
Should you look at my commercial lease before I sign it, and what tends to go wrong in them?
Why ask it
A lease is often the largest commitment a new business takes on, and the draft normally comes from the landlord's side. Have the term, the renewal option, the repair and fit-out costs, the permitted use and the right to assign or sublet checked while they can still be changed.
When is a non-disclosure agreement worth using, and when is it a formality?
Why ask it
An NDA is only as good as your ability to show what was confidential and that it leaked. Talks with a manufacturer or a possible buyer are where one tends to earn its place, and the attorney can say whether a single mutual template would cover most of yours.
Hiring
Are my first hires employees or contractors, and what happens if I get that wrong?
Why ask it
Getting it wrong can mean back taxes and penalties, and the test is not the same in every state or country. Describe the actual role: who sets the hours, whose tools are used, whether the person works for anyone else. Facts like those tend to weigh more than the label on the contract.
Can a family member, a friend or an intern help out unpaid, and where is the line?
Why ask it
Unpaid help is where a small business can drift into wage rules without noticing, and the rules for interns, volunteers and relatives are set by state and national law and are not the same everywhere. Say exactly who would be doing what and for how long, including a spouse or a teenage child, so the answer fits your case.
What am I not allowed to ask in an interview or check in someone's background?
Why ask it
First-time employers are rarely trained to interview, and the off-limits subjects come up naturally in friendly conversation: age, family plans, health, religion. A one-page list of what to avoid, and of the consent a background check needs locally, is cheap to get and easy to follow.
What belongs in a written offer or employment agreement for my first hire?
Why ask it
Pay, hours, start date and notice are the obvious parts; ownership of what the person creates, confidentiality and any probation period are the ones that get left out. Come away with a version you can reuse, blanks marked, so the second hire does not need a second fee.
Would a non-compete, non-solicit or invention assignment clause hold up here, and should I use one?
Why ask it
Enforceability of these clauses varies sharply between states and countries, and some places restrict them heavily. A clause that would not stand up can still sour a hire, so find out which ones are worth having for the role you are filling.
What do I have to do about payroll, workers' compensation, and required notices?
Why ask it
Hiring one person sets off registrations, insurance and workplace postings that vary by state, and several are typically due by the first paycheck. A written checklist that says which items the firm, your accountant or a payroll service will handle keeps any of them from falling between the three.
If I hire someone who works from another state or country, what does that set off?
Why ask it
A remote hire can mean registering with another state's tax and labor agencies and following its rules on pay, leave and termination, and a hire abroad raises a different set of questions again. Get the answer before the offer goes out, since it sometimes changes whether the person should be an employee, a contractor or engaged through a third party.
If someone is not working out, what should I do before letting them go?
Why ask it
Notice, final pay, accrued leave and the paperwork expected all depend on where the person works. Have this conversation before the hire and not in the middle of a dispute, and learn which records of performance you ought to be keeping along the way.
Risk and upkeep
What do I need to do to keep my personal assets separate from the business?
Why ask it
The protection an entity gives is not automatic, and courts in some places set it aside when an owner has treated the company's money as their own or kept no records. A list of the habits that put it at risk in your state, in the order the attorney sees them go wrong, is worth writing down.
How should I sign things so that the company is bound and I am not?
Why ask it
The signature block matters: a contract signed in your own name with no title may be read as your personal promise. Have the attorney show you the exact form to use, and name the documents you should refuse to sign any other way.
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 want proof of cover before they sign. The attorney is not a broker, but can tell you which claims they have seen against businesses like yours and which policies your contracts or your state require.
What privacy rules apply to the customer 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. List every place you gather data, from the checkout to the newsletter form, so the attorney can check your published policy against what you really do.
What can I claim in advertising, reviews and email marketing without creating a problem?
Why ask it
Comparisons with competitors, health or earnings claims, paid endorsements and unsolicited email are all regulated to some degree. Bring a real ad or your home page, since comments on your own wording are more use than a summary of the rules.
What filings and records do I have to keep up each year to stay in good standing?
Why ask it
Annual reports, franchise taxes, registered agent details, minutes and share records are the usual items, though the list depends on the state and the entity type. A missed filing can lead to the state dissolving the entity administratively, and that tends to surface at a bad moment, such as a sale or a loan application.
If a demand letter or a threat to sue arrives, what do I do in the first day or two?
Why ask it
The instinct is to reply at once and explain, which can hand the other side admissions. Agree now who you call, what you must not delete, and whether your insurer has to be told within a set time.
If the business does not work out, how do I close it properly, and what could follow me personally?
Why ask it
Ceasing to trade and dissolving the entity are separate things, and a company left open can go on owing annual fees and filings. Personal guarantees, payroll taxes and leases signed in your own name are the items that often outlast the company, so find out which would apply to you.
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, a draft lease if you have been sent one, 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 can weaken the liability protection you formed the entity to get, and it 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.