With the many costs of running a business, it is tempting for owners to take a do-it-yourself approach to fulfill their business’s legal needs. While business owners may save on upfront costs, they are at risk of sacrificing significant time, money, and security in the long run.
The Costs of DIY Trademarks
Without a thorough investigation by a legal professional into existing trademarks and confusingly similar trademarks, business owners risk serious setbacks in terms of time and money by filing a trademark application on their own.
Preliminary internet searches will show business owners exact matches to their potential slogans, logos, designs, phrases, symbols, or brand names. However, these searches will not show business owners slightly similar trademarked matches, which frequently result in the rejection of trademark applications. Unsurprisingly, the majority of trademark rejections and trademark disputes arise due to similar matches, not exact matches. It is incredibly frustrating for business owners to be forced back to the drawing board to rework their branding materials after months of waiting for approval.
Consequently, businesses forfeit hundreds of dollars, months of wasted review, and even potential trademark litigation if they have already been using a protected mark—a common occurrence. Partnering with an attorney ensures strong, well-researched trademark applications are filed, resulting in fewer issues through the trademark process and an increased likelihood of approval the first time around. Delegating this process allows business owners to focus on improving and growing their business without the time-consuming, costly need to rework trademarks and re-file applications.
A successfully trademarked brand sets an essential foundation for brand expansion and profitable business growth. Once a business’s trademark is legally owned and protected, it transforms these company materials, allowing business owners to sell, transfer, and license their trademarks. Trademarking brand materials is also critical to prevent the devaluation of trademark materials when competitors freely copy and distribute them—and the major loss of potential profits associated with growth and royalties.
The Costs of DIY Contracts
Contracts are critical to every business’s management and development. A business will often have numerous contracts in place with partner businesses, vendors, employees, customers, and many more—especially during the early establishment of a business. Well-drafted contracts that protect and promote a business’s interests are key to its future growth.
In an effort to cut costs, some business owners may be tempted to use online templates instead of outsourcing the work to a professional. Though it seems they are saving money, they are actually buying an expensive or potentially devastating legal headache later on. DIY contracts introduce a number of costly risks that could significantly damage the business and cheat the business out of profit opportunities.
DIY contracts run the risk of leaving out key legal terms and clauses that protect a business’s interests. Contracts inherently require specific legal language to meet the unique needs of the parties involved. Using generic online templates that are vague and overly broad can result in agreements that do not provide specific provisions, protections, or opportunities that are in a business’s interests. In some cases, these DIY contracts impose unintended obligations and can even be rendered unenforceable.
In the event of buying or selling a business, attorneys ensure fair valuation, negotiate a fair price, make sure money is not left on the table, and protect business owners at every stage of the transaction. In addition, having an attorney review a buy-sell agreement between co-owners of a business makes certain that there are legal provisions in place to protect the company’s financial operations and value when major life events come into play, such as death, divorce, or retirement. Contracts are not one-size-fits-all. They need to be tailored to every business’s unique needs and interests.
The Costs of DIY Corporate Records
As a business develops and expands, its corporate records require professional drafting and updating to evolve with the company. Many times there are regulatory requirements that must be satisfied within the corporate documents to protect the business and its owners. These may have unforeseen tax implications or raise concerns with the state of incorporation when done in a DIY fashion.
All corporations are required by law to maintain detailed corporate records. From a legal perspective, it is important to maintain organized, detailed records because it protects businesses should an audit ever occur. Corporate records also hold practical value since they show a business’s progression and the value of the company as a whole.
Articles of incorporation, corporate bylaws, business ledgers, tax returns, annual reports, minutes of board or stockholder meetings, and more must be up-to-date, organized, protected, and easy to access should a business want to attract investors, get a loan from the bank, or sell their business for a profitable margin in the future.
Banks and investors alike will want to review a business’s corporate records in detail before lending or investing money. Messy, mismanaged, outdated, and even missing corporate records will result in being denied loans or investors backing out. Partnering with a legal professional to properly create and manage your business’s corporate records ensures your business will not experience tax issues, automatically dissolve with the death or loss of a partner, miss out on profitable opportunities, or experience devaluation due to disorganization.
Your business doesn’t have to go it alone! Having an experienced legal professional at your side to champion your business’s interests and legal needs is invaluable.
About Peyton Law
Peyton Law has written this blog post to help small businesses understand the importance of hiring an attorney. View the originally posted blog post here.
Peyton Law (formerly Snyder Law) offers legal strategy designed specifically for growing businesses. All clients meet with an experienced and approachable attorney from our team who will address the company’s (or owners’ partners’) most pressing legal matters; and will work to provide fit-for-purpose deliverables to support growing businesses.
Remote COO uses Peyton Law for all of their legal needs. To learn more about Peyton law, or to make an appointment, check out their website at https://peytonlaw.com/ or call Cassandra Ortner at 484-801-0021.