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Start Your Business Startup Basics

Legal DIY 101: What's OK to Do Yourself

Legal DIY 101: What's OK to Do Yourself
Credit: Lukas Gojda/Shutterstock

As any small business owner knows, launching a new business comes with a slew of legal paperwork. From acquiring licenses to incorporating your business, it can be quite a chore to make sure all the details are in order.

You might consider paying a lawyer to dot the i's and cross the t's, but this takes away critical dollars from your already-limited pool of resources. If you're strapped for cash, you can take the time to handle some of these legal items yourself.

"For the typical small business owner, every dollar counts," said Nellie Akalp, founder and CEO of online legal service CorpNet. "Attorney retainer fees can really eat into the budget, yet in some cases, the upfront investment in getting sound legal advice can save you much more down the road. The key is to find the right balance between legal DIY and an attorney."

In a 2013 email interview, Business News Daily asked Akalp about what legal tasks small businesses can feel comfortable doing on their own (without an attorney), and what should definitely be done by a small business lawyer. [Should a Small Business Use an Attorney?]

Here are some common legal issues a business may need to address. The more intricate an item is, the better it may be in the long run to seek and utilize a lawyer and his or her professional legal expertise, Akalp said.

Business structure. Every business needs to choose its legal structure before registering it with the local government. The Small Business Administration provides a comprehensive guide to choosing and registering various business structures, and some of them are better suited to DIY than others. For example, Akalp said it's very easy and cost-effective to use an online legal-document-filing service to incorporate a business or form an LLC. However, if you have a very complex shareholder structure or are dealing with millions of dollars, then you should turn to a lawyer.

New-hire paperwork. Whenever a business adds an employee, the state and federal government want to know. From I-9s to W-4s and more, there are forms to be filled out. By following the detailed instructions provided online, it becomes a relatively simple process, especially with practice.

Employment agreements. These documents outline an employee's duties, responsibilities and requirements for employment. Creating the language with the employee to ensure every item is included, and then signing when both agree, can reduce the chance of disagreement later. In the event of an employment dispute or workman's compensation claim, having a signed agreement on file can be of benefit.

Contract employment. Instead of hiring someone to work as part of the company, small business owners are more frequently turning to hiring freelancers by contract to complete particular tasks. Many samples of such contracts can be accessed online and turned into documents that serve your small business needs. For more information on hiring contract-based workers, visit Business News Daily's guide.

Nondisclosure agreements (NDAs). Often going hand in hand with contract employment, NDAs can be handled the same way. In both cases, it may take some time and reading to find everything you are looking for in an agreement or to customize for your industry.

Collection letters. DirectRecovery.com reported that, according to the Commercial Collection Agency Association, you have a mere 52 percent chance of getting an invoice paid once it is six months overdue. The biggest mistake that many small business owners make is to trust that the invoice will be paid and to delay collection actions until too late. Start the conversation right away with a phone call or email on the first week payment is past due, and develop a set of collection letters to send as the invoice reaches your 30-, 60- and 90-days Aged Invoices Detail report. Prompt and consistent requests for payment provide the necessary documentation if you do need to involve an attorney in the collection process while minimizing the chance that you would need legal help at all.

Trademarks and patents. While not all businesses will need to file trademarks and patents, doing so can be a good idea if you want to protect your business name, logo and other intellectual property. You can use an online service to file for trademark protection, Akalp said, but you're going to need to turn to a patent attorney to help you navigate the patent process.

Even if you choose to tackle many of these issues on your own, every small business owner should have an identified lawyer with whom he or she can discuss problems or concerns. Whenever there is doubt, it is best to consult with an attorney.

Further information on business legal issues can be found in the following articles:

This article was originally published in 2013 and updated Aug. 4, 2015. Additional reporting by Chad Brooks.