Brad Nakase, Attorney
California businesses should hire a corporate lawyer to ensure corporate compliance. A corporate lawyer advises a business client of the company’s responsibilities, rights, legal duties, and rights. When a corporation hires a corporate lawyer, the lawyer represents the corporation. The corporate attorney does not represent the corporate officers, employees, or directors. Under corporate law, a corporation is considered a “person” and is separate and distinct from the shareholders and natural person running the company.
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What is Corporate Law?
Corporations are treated like people; they can sue and be sued. Corporations are legal entities that are authorized to conduct business. As separate legal entities, corporations are set apart from their individual owners and shareholders. Corporate law focuses on all the legal hurdles that corporations may face. There are so many state and federal requirements that corporations must abide by which is why most states make it mandatory that corporations hold annual meetings. An attorney along with owners and shareholders attend this meeting as to make sure that the corporation is following all rules and regulations.
Corporations also confront the normal everyday issues that businesses face, such as employment issues, disputes regarding contracts, and product liability issues, etc. Depending on the corporation’s size, they can either hire a legal team with various types of specialties, or one individual attorney with a broad range of experience.
- Corporation. A corporation is a legal entity whose main purpose is conducting business. Corporations are either closed or public. Few people own the corporation when it is a close corporation, it also does not have its stock publicly traded. With public corporations, stock is traded on the stock exchange market.
- S Corporation. This kind of corporation has a limited number of shareholders. Although the shareholders have some certain tax benefits, they have no stock options.
- Piercing the Corporate Veil. The person with the highest ranking in a company, who is responsible for making decisions regarding management.
- Chief Executive Officer (CEO). Appointed by board of directors, the CEO is the executive chief with the power to make decisions and authority to manage the corporation’s daily operations.
- Board of Directors (BOD). Elected by the corporation’s shareholders, the board is a group of individuals that manage the corporation’s affairs and with power to appoint the corporation officers.
What to Consider When Hiring a Corporate Lawyer
Although corporations must be incorporated, they do not necessarily have to be in their home state. For example, Delaware is actually a popular pick when it comes to incorporation due to its tax benefits and the low costs of incorporation. However, corporations still need to register their corporation in states where they conduct their business. It’s always best to check with an attorney if you would like to incorporate out of state.
As mentioned above, corporations are heavily regulated by state laws and the federal laws. Actions like calling for board meetings, issuing stocks, appointing employees, and having communications with shareholders- are all actions which are governed by several state and federal statutes. Corporations that fail to follow statutes can be subject to heavy fines and even lawsuits. Taking this into consideration, it is extremely important that a corporation has a lawyer to help it navigate the murky waters of state laws and federal laws.
Corporate Lawyers Los Angeles Businesses Trust
Most Los Angeles business owners know that a corporate attorney can help their company with litigation, but there are a number of other ways corporate lawyers can help your business:
What Can’t a Corporate Attorney in California Help With?
There are a number of things a corporate attorney cannot help with, either because it is something that is more financially viable to do yourself or because it requires the help of other professionals. Here are some things that your corporate lawyer cannot help with:
- Applying for an EIN
- Filing formation papers
- Choosing domain names and business names
- Anything to do with taxes
- Applying for a business license
- Writing a business plan
- Hiring employees and independent contractors
- Applying for business loans
A corporate lawyer is a great source of advice on the above topics, but they cannot perform those tasks for you. If you need to find an accountant, ask your corporate lawyer who they will recommend.
How to Pay a California Corporate Lawyer
A corporate attorney will use a number of different fee structures when charging you. Certain fee structures are more appropriate for different services. Here are the five most common fee structures:
- Retainer – By hiring an attorney on retainer, you buy a certain amount of their time per month. This means that you can seek advice and questions from them anytime you need, and you will receive a quicker response because that time is set aside for your business. This fee structure is beneficial for new business owners or those that may need a lot of assistance.
- Contingency Fee – For lawsuits where a client will win damages or compensation if they win the case, a lawyer might work on a contingency fee. The client will not pay any legal fees upfront (though they may need to pay court fees), and the attorney will take their fee as a percentage of the compensation they win. If your attorney does not win the case, then you will not pay them.
- Flat Fee – For simple services, a corporate lawyer will charge a flat fee. This means that you will only pay them this fee for the task, no matter how long it takes them. Attorneys will usually allow flat fees for routine tasks that will not vary in the amount of time or work they take.
- Hourly Rate – For tasks that may vary in the time it will take or those that need negotiation with another party, your attorney will charge an hourly rate. This means that you will pay them for the time they spend on each task.
- Business Equity – This is not a common fee structure, but if your attorney believes in your business, they may offer their services in return for business equity. They will come on board as a legal partner as they are more invested in the success of your company.