The legal needs of an expanding business
Starting a new business or expanding a current business is an exciting but stressful time. Hiring employees to meet a growing demand for a business’ customers, obtaining additional space and establishing company wide policies can create the need to take several legal steps. For example, a growing business may need to:
•· Draft a lease agreement
•· Update or create bylaws
•· Draft an employee handbook
Most business owners would rather concentrate on business operations than human resource and legal necessities. Below are a few legal issues that may come up that require a business to outsource to an experienced attorney.
Lease and purchase agreements
A commercial business lease often lasts three to five years, so obtaining a fair lease agreement is an important step to expansion. Legal issues like preventing a competing business from renting nearby, negotiating Common Area Maintenance fees and avoiding provisions that favor the landlord are all issues that come up frequently in a commercial lease agreement.
A business does not have a legal requirement to create bylaws. However, bylaws can provide an outline of a company’s operating procedures. This could include meetings for officers of the company, its shareholders and directors. Bylaws can dictate employee titles and compensation. Rules on how to amend provisions should be included.
Depending on the size and need of the business, its bylaws could be lengthy and detailed or smaller in scope.
Drafting an employee handbook
Like bylaws, there is no legal requirement to have an employee manual; however, if done correctly such a document can provide numerous benefits. They can establish company policies and set a tone for the atmosphere of the business. They provide a way to communicate employer expectations. Employee manuals can also explicitly state anti-discrimination policies and may be useful to guard against lawsuits. Information regarding time off, vacation time and medical leave is also usually included in the company handbook.
Handbooks can also provide traps for the unwary. An employee manual may unintentionally create a contract between an employer and employee, and the manual should be clear that is not the case. Handbook language may be interpreted to create contractual obligations that may affect how and when employers can terminate employees, such as changing an employee’s status as an at-will employee. The manual should also include language regarding who can modify the employee handbook and that such people can modify the manual at any time.
An attorney can help
Expanding a business the right way can spare a business owner a wide variety of problems in the future. From anticipating lease agreement problems, creating or amending bylaws or creating an employee handbook and conducting supervisor training, an experienced business organizations attorney can help a business expand while saving time for the owners and operators to focus on the business itself. Businesses looking to expand should contact a skilled business law attorney to discuss their legal needs.