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Starting up and owning a small business as an owner can often be riskier than it is rewarding. There's a multitude of North Carolina and federal business laws you and your business will need to abide. Cutting legal corners for a competitive edge or merely for survival in your market could land your business and you in an expensive legal quagmire.
For business owners in Greensboro, Raleigh or Charlotte, it's important to understand state and federal laws and know how to proceed when a legal issue develops. LawInfo has the North Carolina small business law information you need from registering for a business license to buying an existing small business.
Legal issues crop up for all businesses, be it contracts, taxes or employment. Legal questions and issues will vary widely by industry and it's a good idea to consult a business attorney beforehand. But a small business owner may encounter legal issues such as:
While there are a few advantages to buying an established small business—such as bypassing most of the startup costs and having insight into the business's financial, tax and legal track record—there are still some risks.
An important step in the buying process is performing your due diligence. This means doing research on the business's financial records, tax returns and any past or ongoing litigation. You don't want to incur any hidden costs after purchasing the small business. You'll also want to determine why the current owner is interested in selling.
Buying a small business can be an expensive venture. If you don't have the funds to complete the purchase, you can always seek financing. There are several financing options, each of which has their advantages and disadvantages.
Some sellers may be open to helping you out with financing the purchase with a down payment and payments over time. You can also take out a term loan from a bank or collaborate with angel investors and venture capitals.
If you co-own your business with multiple partners or shareholders, one of the concerns you may have is what will happen to the company when one of your co-owners leaves the company or dies. You can ensure that your business's welfare is secured using a buyout (or buy-sell) agreement.
A buyout agreement is a lot like a premarital agreement. You and your co-owners agree to buy a leaving coowner's interest in the business at a determined price. If a co-owner dies, their estate must agree to sell the coowner's shares back to the business or its surviving co-owners.
Buyout agreements are usually used to protect a business from a coowner's bankruptcy, which could threaten to liquidate business assets or shares to pay off the coowner's debts. They're also used when a coowner's family is involved in the transfer of ownership.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified business lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local business attorney to discuss your specific legal situation.