ABA Family Legal Guide

Forming and Operating a Small Business

Business Problems

Operational Problems

Must a business have a lawyer involved in all these transactions?

At the very least, a business should consult a lawyer regularly about major transactions and compliance problems. Even if the law firm representing a bank prepares the loan documents and the borrower has to pay for this work, which is customary, the borrower's lawyer should review all of the documents before they are signed.

To provide adequate legal protection for a business, the company's lawyer should be involved whenever a major change occurs in the business. Some companies may wish for the additional security of having the company's legal documents reviewed on a regular basis, preferably at least once a year. This annual legal audit might uncover omissions, such as the absence of corporate minutes and changes in documents necessitated by changes in statutes and regulations. The review of the annual audit with the client could also provide the lawyer with the opportunity to discuss with the client recent legal changes so that the executives and employees will be alerted to potential problems and will be better able to comply with the changes. As part of this process, the lawyer may uncover potentially serious legal problems at a time when they can be resolved in an efficient, cost-effective fashion.