Starting A Washington Business 101: The Legal Info You Need To KnowStarting a business is always inherently risky, but you can protect yourself from some of that risk with the right planning and help. Our law firm provides extensive and experienced legal services to entrepreneurs and small business owners in the Washington area. To help guide you through what might otherwise be an extremely stressful process, we have put together this article of essential information and tips, such as:
As your trusted business attorneys, our office can review your personnel documents such as employee handbooks, non-solicitation agreements, intellectual property assignments, confidentiality agreements, and other employment-related documentation to ensure that your business complies with applicable state and federal laws. We can also help you anticipate legal problems, plan for them, and be ready to conquer your legal problems while they are manageable.
It is ideal to find an attorney to provide you with legal advice and services as soon as possible. In order to maximize the protections you and your business can obtain from incorporation and organization, everything should be conducted under the rules of your organization, with meeting minutes, board resolutions, and other forms of documentation kept.
Your attorneys can not only assist you in preparing these rules and documents, they may also assist you in recordkeeping and proactively advise the board and ownership.
All that is required for the formation of a partnership is that “two or more persons carry on as co-owners a business for profit,” regardless of whether those people intend to form a partnership! RCW 25.05.055.
It is always best to set forth clear governing documents describing who has an ownership interest and who has a right to participate in the management of any business. Communicated expectations and agreements are essential to an effective business, especially in the long term. Make sure you get all material terms in writing. Although verbal partnership agreements can frequently be legal and binding, See RCW 25.05.005(7); See also Malnar v. Carlson, 128 Wn.2d 521, 533-34, 910 P.2d 455 (1996), it is always best practice to produce an unmistakable, clear, legally enforceable written instrument that each partner can refer to for guidance.
More complex business organizations, such as Limited Liability Companies and Corporations, generally start with creating governing documents (for example, Articles of Incorporation or Articles of Organization) and by registering with the secretary of state. Depending on your location, your city or county may also require business licenses. Your business will also need to designate a registered agent in order to meet regulatory compliance standards.
These procedures are only part of the complex process required to avoid long-term problems, liabilities, and vulnerabilities.
With proactive, regular consultation, businesses can often navigate difficult legal scenarios before they develop into a lawsuit. As is often said, “an ounce of prevention is worth a pound of cure.” Another frequently touted maxim in business is “failing to plan for problems, is planning to fail.”
Proper planning and risk management strategies can prevent significant and expensive problems before they arise, saving you considerable money. They can also help to ensure that your company’s assets and goodwill remain protected, eliminating collateral problems and allowing your company to focus on doing whatever it does best.
Contract law principles govern Your Articles of Organization and your Articles of Incorporation. See e.g., In re Olympic Nat’l Agencies, 74 Wn.2d 1, 7, 442 P.2d 246 (1968) (“The articles of incorporation are a contract, and govern, save as statute may provide otherwise, the rights of the parties”). When you form a business with your fellow shareholders, members, and partners, you agree to abide by the terms of those documents for the mutual benefit of all interested parties.
Although other types of contracts are not strictly required, it is smart for businesses to create separate agreements to protect their interests, such as
It is always best practice to get employees to agree to these things at the outset of their employment. Once an employment relationship is established, it is more difficult to modify the terms of employment to include post-employment restrictive covenants. That is because “independent, additional consideration is required for the valid formation of a modification or subsequent agreement.” Labriola v. Pollard Group, Inc., 152 Wn.2d 828, 835, 100 P.3d 791 (2004). “Independent consideration may include increased wages, a promotion, a bonus, a fixed term of employment, or perhaps access to protected information.” Id.
There may also be times when employers are faced with proposed terms and conditions from several employees in the form of collective bargaining agreements. These can end up quite restricting, so it is always best to have an experienced Washington business law attorney help with contract formation and review.
For more information on Legal Services Provided To Washington Businesses, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (253) 400-2232 today.
