Whether you are starting a small business or running an established company, it is vital to understand business laws and regulations. But that is easier said than done. My goal is to provide business-related legal services so that you can spend more time dealing with the actual business and less time with legal intricacies of operating your business. My services include:

Business formation

You have a new and innovative product or service and you are interested in forming a new business. You may have concerns about liability, taxes, investors and other considerations. As your small business lawyers, we will assist you in deciding whether your startup business should organize as a limited liability company (LLC), partnership, S corporation or C corporation. We will form the most appropriate business organization for your new business and register the business in all jurisdictions in which it will conduct business.

Mergers and acquisitions

If your business is fortunate to thrive and become a merger or acquisition target, we can represent you as the seller; or if you are on the other side and looking to acquire a business, we can assist with the due diligence in purchasing a business. We will review various approaches in purchasing a business through merger or acquisition. We will discuss with you various structures in purchasing the stock or purchasing the assets of an acquisition target. In either case, your business will need thoughtful and comprehensive representation in all aspects of a merger or acquisition.

Government contracting

Government contractors face numerous issues when contracting with the government. And with a hands-on approach and substantial experience, we will help you navigate those legal issues. We prepare teaming agreements, subcontracts and joint venture agreements and can handle a variety of other government contract matters. As government contract lawyers for your small business, we can assist you in applying for programs for HUBZones, service-disabled veteran-owned small businesses or women-owned businesses. If your company is facing debarment or suspension because of allegations of corruption or bribery, we can assist in your defense before the U.S. government or the World Bank.

Business transactions

Once you have an ongoing business, however organized, you will have a host of various commercial transactions. We prepare agreements with lenders, lessors, partners, customers, employees, and consultants. We provide business legal services for your company, preparing confidentiality agreements, nondisclosure agreements, licensing agreements, distribution, employment agreements, independent contractor agreements, lease agreements, and many others. We will help you understand what each part of these agreements require and make sure that these agreements provide protection to you and your business.

Corporate law

Once your startup business has been created, your company will have ongoing requirements to maintain its separate status. We will assist in guiding you on how to prepare corporate minutes or resolutions of the company to maintain the corporate form and other steps to protect the limited liability of your company. You will also have to make sure that your bylaws or operating agreement continues to reflect the needs of the business organization. We are available to assist you in addressing these issues. And once your company is ready to raise additional capital from investors, we can work with you to determine whether you are subject to securities laws or fall within one of the exemptions.

Business disputes

Few businesses are immune to business disputes. If your small business was well-advised, you have an agreement that will provide guideposts on how to resolve your business dispute. If you are unable to settle your dispute, you may have a dispute resolution mechanism such as mediation or arbitration in the agreement. An alternative dispute resolution mechanism such as arbitration or mediation generally can provide a relatively quick resolution of your business dispute. If not, then you may have to consider litigation. We handle business disputes, including pre-litigation matters, mediation, arbitration and litigation.

Anti-corruption compliance

Every company should have procedures and policies to minimize its exposure to allegations of corruption or bribery. An integrity compliance program (ICP) is essential for businesses doing work internationally for the United States government or work financed through one of the development banks. We can assist in reviewing or preparing an ICP to assure that is consistent with the anti-bribery and anti-corruption guidelines from the World Bank. If your company is facing debarment or suspension because of allegations of corruption or bribery, we can assist in your defense before the U.S. government or the World Bank.

Non-profit law

We work with organizations to obtain their tax exempt status under Section 501(c)(3) of the Internal Revenue Code. There have been recent changes to obtaining 501(c)(3) status and we have worked with organizations in submitting successful applications on the simplified track by filing a 1023-EZ and the more rigorous 1023 application for larger organizations. Nonprofits also face similar legal challenges to assure that they comply with business requirements and additional requirements to assure that they do not jeopardize their tax exempt status. As a law firm for nonprofits, we work with nonprofit organizations to guide them through these issues.

FAQ Small Business Attorney in DC

What is considered a small business?

Almost all our clients fall within the definition of small business/startup as determined by the Office of Advocacy of the U.S. Small Business Administration. Under this definition, a small business has fewer than 500 employees. Small businesses encompass about 99.9% of all business organizations in the United States.

Which industries do you serve as a small business attorney?

Most of our clients are service providers such as consulting companies, law firms, accounting and bookkeeping services, cybersecurity consultants, video production companies, and lobbyists, just to name a few. We also represent foreign and domestic manufacturers and software developers.

As a small business lawyer in DC, we represent some retail operations, such as bookstores and restaurants. We also represent numerous nonprofits with varying missions. Our government contractors clients hold various IDIQs (Indefinite Delivery, Indefinite quantity Contracts) and GSA schedules.

In which areas of the law does a small business or startup need legal assistance?

Most times, small businesses/startups need the services of outside general counsel. As outside general counsel for small businesses, we can handle most matters as a small business attorney that small businesses generally encounter. Usually, anything with the word agreement or contract is within our practice areas. This includes operating and shareholder agreements, which are used for small businesses and startups that are formalizing their relationships with their owners. Once a business is formed, then we prepare and review a host of other agreements, such as service agreements (which may be referred to as client agreements or consulting agreements), independent contractor agreements (which may be referred to as subcontracting agreements), employment agreements, teaming agreements, purchase and sale agreements, merger agreements, option agreements, license agreements, lease agreements, and the list goes on.

What factors should a small business and startup look for in retaining the services of a lawyer for small businesses?

With our extensive experience of working as a small business attorney in DC for decades now, background and experience should come right at the top of the list when looking for a small business lawyer. We think that accessibility and communication are essential for a successful relationship between an attorney and a client. Hourly rate is important but not as important as quality of service.

What kind of experience do you have in advising small businesses as an attorney?

Keith Rosten has not only legal experience but also business and practical experience that allows him to relate to the trials and tribulations of a small business owner. Keith has BigLaw experience before working for small and medium-sized businesses, first at his own law firm focused on small businesses and then with Berliner Corcoran & Rowe LLP.

Keith has substantial business experience. He received an MBA from the Tuck School at Dartmouth College. During his business studies, he worked on several group projects with small businesses, including a furniture manufacturer, a manufacturer of leak location precision equipment, real estate developer. After business school, Keith operated a successful real estate business in California and overcame numerous issues, such as asbestos abatement and underground storage tank remediation.

Keith worked as a legal adviser to a government contractor and was a legal adviser to a major initiative in Russia. Keith ran another small business, selling and marketing solar energy equipment. The business had an e-tailer component, hosted the largest solar energy forum online, and sold solar energy equipment to the government. Keith negotiated two GSA schedules for the business and obtained HUBZone certification for the business. Keith was also president of the Dartmouth Entrepreneurial Network – Washington, a networking organization for small businesses in the greater Washington, DC community.

Keith has also volunteered for Compass Pro Bono, working with local business professionals to conduct long-term consulting engagements for local nonprofits in fundraising, governance, and strategy.

With this breadth of legal and business experience, Keith is attuned to some of the challenges facing small businesses, which allows him to provide effective advice and guidance.

As a small business lawyer, do you take in-person meetings only?

Yes. We are located in downtown Washington DC and host many of our clients. For those clients who cannot come into our offices, we usually meet over Zoom or by telephone.

How do you charge for your services as a small business attorney?

We charge our clients based on hourly fees. We usually provide a budget of how much certain matters cost so that startups and small businesses know in advance the ballpark cost of the matter.

What if a client does not like our services?

Clients can terminate our services anytime if they don’t find it satisfactory.

Should my small business lawyer or startup lawyer be in the same state as me?

No, not always necessary and may depend on multiple factors. For example, though we are an expert small business lawyer in DC, we have also provided consultation to other cities’ clients.

Case study: Looking to buy an existing business (Part 1)

Trying to acquire an existing business is not a sport for the short-winded. Buying a small business can be challenging. As a merger and acquisition attorney, I represented a prospective buyer for eighteen months, before he decided to give up the hunt. During our debrief, I learned from his long, ultimately unsuccessful search. This article highlights key lessons learned from his experiences and observations about business acquisitions.

yacobchuk © 123RF.com

This article is divided into two parts. The first part describes his search and the various challenges he faced. The second part describes the lessons he learned from his search.

Related article: Business Acquisitions: Key Takeaways

The prospective buyer

The client is a commercial airline pilot, who previously served in the Air Force. For the purposes of this article, I will call him Jack. His business partner and wife worked for the government as an administrator.

Their goals and prospects were clear to them as they went into the search. As they embarked on their search, their vision was to find a marginally profitable but “clunky” business and turn it into something more efficient.

Parameters: strategic search for the ideal business

In his quest to control income beyond traditional employment, Jack embarked on an 18-month journey to buy a business. Jack was about as directed and determined as anyone as I have represented.

He was looking to purchase a small business with a price tag between $1-$2 million. He and his wife were prepared to invest $100,000-$200,000, and wanted the seller to take back a seller note of about 5% with the rest coming from bank financing, possibly a 7(a) SBA small business loan.

Jack undertook a strategic approach to acquiring a business. He identified four criteria in evaluating a business: risk, growth, transferability, and documentation. He constantly thought about these criteria when reviewing a particular small business.

Related article: Checklist for Buying or Selling a Small Business

Manageable Risk. Risk assessment focused on market conditions, business processes, and obsolescence—avoiding outdated industries like encyclopedias in 2024.

Scalability. Growth emphasized scalability, leadership, labor pool, demand, and modernization opportunities. Growth potential was key, with an emphasis on leadership, labor demand, and modernization. Many businesses Jack reviewed lagged in adopting modern payment systems, presenting opportunities for efficiency improvements.

Transferability. There was a consideration of workload, branding, and contracts when determining transferability. One of the challenges of transferability was branding related to original owners. For some small businesses, it can be a challenge to transfer goodwill associated with founders to new owners. Jack related how many businesses bear the names of their founders or are otherwise closely associated with them.

Related article: Sale of a Business: Goodwill

Documentation. The state of the business records of the target company was possibly the most important factor in reviewing a specific company. Jack looked to make sure that there were adequate financial records to back up the business’s financial health. Documentation proved the toughest hurdle, as 80% of businesses lacked proper accounting records, complicating financial assessments.

Jack recounted that many of the businesses he reviewed did not have what he called “clean documents”, and “it just went downhill from there.”

Not as important as the financial records but also important were the standard operating procedures, like customer onboarding. Jack sometimes searched in vain for basic training manuals.

The search

In 18 months, Jack reviewed 91 businesses, met with 40 sellers, and engaged in price negotiations with 15. Among the 91 businesses, only four met all of Jack’s criteria.

Competing offers

Jack failed to close any of these deals, however, losing two of the deals to private equity and the other two went to buyers who were willing to pay all cash, even though they offered a lower purchase price than Jack’s.

Frustrations abound

There were three major sources of frustration when it comes to finding an existing business and closing a deal.

Frustration 1 – Mismatch between buyer background and size. Frustrations included affordability constraints for larger businesses suited to their leadership experience. Jack conceded that he could not afford the size and type of business that his competency would have supported.

When he was in the Air Force, Jack had run a 3000 person group around the world. Jack’s wife and business partner had been a government official with significant responsibilities across functional teams. As Jack put it, “that’s different than making donuts.” In retrospect, he reflected that he should have been looking for businesses with a price tag of $6-$7 million.

Frustration 2 – Gatekeepers interests not aligned with buyers. Each broker representing the sellers had different processes. According to Jack, the brokers would hide behind a lot of the legal procedures like non-disclosure agreements. And each NDA had different provisions.

Related article: NDAs: Who Do They Protect?

Another gatekeeper was the lending institution. Jack eventually identified four different sources of funding from traditional banks to business loan advisers. Even these sources of funding were limiting and had narrow criteria, including the location of the business, how much time you would devote to the business.

Frustration 3 – Listing and search criteria limitation. There are several business search engines, but they are “archaic,” according to Jack, and “they haven’t caught up to the 2020s.” They are generally focused on location.

Conclusion

Jack’s journey to acquire an existing business faced numerous challenges that ultimately derailed his efforts. In the next section of this article, we will delve into the key lessons Jack learned from his experience, offering valuable insights for others navigating the complex process of business acquisition.