Running a small business means that every dollar matters, and it can be challenging to justify expenses that don’t seem essential. However, hiring a lawyer at crucial moments in your business’s lifecycle may initially appear costly but can ultimately save you time, money, and effort, while also safeguarding your business. In the realm of small business, leaving things to chance is risky. Even with the best intentions when entering into employment contracts or partnership agreements, misunderstandings can arise. It’s crucial that everyone involved clearly understands their rights and obligations to prevent potential issues down the line.

Here are three types of contracts or agreements that you should have a lawyer review:

Employment Contract

When your business utilizes employment contracts, it’s crucial to clearly define the terms of employment, conditions for termination, and job expectations. If confidentiality, protection of trade secrets, or handling sensitive matters is necessary, the contract should enforce these requirements. A well-drafted employment contract protects both you and your employees, while a poorly written or ambiguous one can lead to complications. Having a lawyer draft a contract that clearly outlines employment expectations minimizes the risk of misunderstandings, ensuring that all parties are aware of their obligations.

Partnership Agreement

A partnership agreement outlines the operational framework between business partners. It addresses questions such as whether both parties have equal decision-making power, share financial responsibilities equally, and what happens if one partner wants to exit the agreement. A business attorney can draft a comprehensive partnership agreement and highlight potential issues that you and your partner might not have considered, such as the implications of business growth on the partnership.

Shareholders Agreement

A shareholders agreement is a contract among the owners of a company, similar to a partnership agreement. It defines each owner’s responsibilities, outlines how shares can be sold, and establishes procedures for resolving disputes. It specifies which decisions require unanimous consent versus a majority vote and addresses what happens if a shareholder wishes to sell their shares. Shareholders agreements are critical because disputes among shareholders can jeopardize a business. Discussing these issues with an attorney and formalizing the terms can lay a solid foundation for the company’s success.

Final Thoughts

A business attorney will advise you of your legal rights and obligations and make sure your contracts protect your interests. He or she will also raise issues you might not have thought of and suggest options for dealing with various situations.

Unfortunately, too many small business owners only seek out legal advice when they’re already facing a serious issue. Talking to a business lawyer before you face legal action protects you if any legal issues arise. If no legal issues arise, maybe that’s because you took the time to have an attorney write up clear contracts in the first place.