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Do I have to hire a lawyer to start an LLC? If not is it wise to go about it with little legal experience?: I am looking into selling my woodworking items on e-commerce websites + it's own website sometime down the line.

Asked over 1 year ago in Business

Roger’s answer: Forming a single-member LLC is quite simple in Colorado, and quite inexpensive. Although protection from claims may be limited, the LLC may still be a good way to start. If protections from claims is important, a two-member entity could be formed by adding a spouse as a member.

An S corp may have some tax advantages, but is a bit more complicated to set up properly. The LLC can elect to be treated as an S-Corp for tax purposes or the LLC can be converted to an S Corp down the road. If the risk of claims is minimal, the LLC is a good way to start. Just forming a separate entity adds credibility. Both customers and vendors will take you more seriously.

Answered over 1 year ago.

What is the most cost efficient way to get term sheets for venture capital investment reviewed by lawyers?: What is the most cost efficient way to get term sheets for venture capital investment reviewed by lawyers?

Asked almost 2 years ago in Venture Capital

Roger’s answer: Cost is an important consideration when starting a business. You can keep costs down by selecting an experienced attorney who knows how to successfully negotiate venture deals (without over-lawyering or playing up to the VC). Although most lawyers prefer hourly billing, there are attorneys who will work on a fixed fee basis, even for negotiating term sheets.

If the attorney is willing to do it for free, be sure you are comfortable with their long term billing practices. One advantage of paying for the initial legal work that you get to see how the attorney works, and whether the bills are reasonable before accruing a huge amount.

More important than the fees are the relationships. You are just starting to build a relationship with your investor. You want to build confidence by selecting an attorney who facilitates the deal. Also, you want to build a relationship with an attorney you trust, one who adds value, and provide the expertise and perspective you need to complete the transactions successfully, and ideally become a key member of your outside team of advisers.

Answered almost 2 years ago.

Do I need a lawyer: I was given keys to move a friend's car and when I went to move it, I hit a tree. I signed a paper saying I will pay her back a certain amount of money for damages but I later found out that she received a large sum of money for the accident and I wasn't held accountable. Now the person is being persistent about the money I said I would give to her and I think she is lying about the cost. Is that paper that I signed considered a legal document and will it hold up in court?

Asked almost 2 years ago in Contracts

Roger’s answer: Whether the signed paper is enforceable may depend on contract law. The basic elements for creating a valid contract are: (1) mutual assent, (2) consideration, (3) capacity, and (4) legality (see explanation https://www.law.cornell.edu/wex/contract). If any of those elements are lacking, the signed paper may not hold up in court.

In this case, the issue may be whether there was adequate "consideration" for signing the paper. What was the incentive for agreeing to pay damages? Was there a waiver of claims? Was there some other benefit received in exchange for the signature?

Even if the signed paper is invalid, the friend may still have a claim for damages. However, it would appear unfair if she were to benefit twice by collecting both from the driver and the insurance company. Would the insurance company have paid the claim if they knew that the driver had agreed to reimburse damages? What does the insurance policy say? Did the friend mislead the insurance company in filing the claim?

It is possible that the friend is entitled to both if the insurance money did not adequately cover all the damages. One would need to know how much the repairs would cost and how much the insurance company paid? And, of course, was the driver responsible in the first place? Was the signed paper a valid contract?

This may sound like a lot of questions, which they are. These are the questions that a lawyer might ask in trying to find a simple answer. Although the friend may not file a law suit in civil court, they could bring a complaint in small claims court. If it goes to that, having answers to some, if not all, of the questions above would help to prepare a good defense.

Answered almost 2 years ago.