You've put in the work and now your business is growing. There's a strong foundation in place, everything seems to be moving in the right direction and you're outgrowing your current situation. Before you sign that lease on a new location or hire a pack of new employees, you need to make sure that you've got the right legal foundations to support your expansion.
Continuing to grow your revenue is an important component, but it's not the only consideration in front of you. As you grow, the issues your business may face can change significantly, and you need to make sure you are doing things like mitigating risk, complying with a variety of different obligations and regulations, and in the legal facets of your business, making sure that your contracts are ready for growth, your business structure is properly documented and formed, and that your operations are generally ready for the upcoming growth.
When your business has hit this stage, there are some common steps that you should run through to make sure you're ready.
Review and Update Your Business Entity Structure
The legal structure you chose (or didn't choose) when you got things started may not be the best one to use as you grow. Especially if you've started as a sole proprietorship, when growth comes, moving to a formal, incorporated business structure like an LLC, corporation, or partnership should be considered. Some of the benefits of a new corporate structure are:
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Tax efficiency: Scaling often brings in more revenue, which can push you into a higher tax bracket. Using a tax election as an S-Corp might offer pass-through taxation benefits compared to a standard LLC.
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Liability protection: Adding new locations, services, or employees increases your exposure. Ensuring you have a structure that separates personal and business liability is crucial.
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Investor readiness: If you're seeking outside funding, some investors prefer specific entity types, such as Delaware C-Corps for venture capital deals.
Quick Tip for Minnesota Businesses: If you formed your business in another state but are now operating primarily in Minnesota, you may need to file as a foreign entity or consider domesticating your business in Minnesota to stay compliant.
Get Your Contracts in Order
As a lawyer, you could easily anticipate that this would be on the list of steps to take. When your business is growing, you're likely going to be working with more contracts (think leases, vendor agreements, employment agreements, Non-Disclosure Agreements, and other client contracts). So now is the right time to:
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Review existing contracts to ensure they are scalable and enforceable.
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Add protective clauses, such as limitation of liability, indemnification, and termination provisions.
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Update client agreements to reflect new pricing, timelines, or service capabilities.
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Draft clear employee contracts with non-compete or non-solicitation clauses if you're hiring or acquiring new staff.
Your business attorney can review your key contracts and reduce the chance of contract disputes as your business grows.
Register Your Intellectual Property
Your brand becomes more valuable as your business expands. Now is the time to:
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Register trademarks for your business name, logo, slogans, or product names.
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Protect proprietary processes or content, such as software code, written materials, or business systems, through copyrights or trade secrets.
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Ensure your IP is owned by the business, not by independent contractors or third parties.
Your business attorney may not be the attorney to help you with this aspect of your business (depending on the complexity of your intellectual property), but should be able to refer you to an attorney who specializes in the type of intellectual property you are looking to register.
Check Your State and Local Licensing Requirements
Your growth often means entering new markets: new counties, cities, or even other states. Every jurisdiction may have different requirements for:
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Business licenses
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Sales tax permits
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Food or health permits
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Professional certifications
Before you open your next location or launch new services, double-check that you're in compliance with each new jurisdiction’s laws.
Strengthen Your Employment Practices
Hiring is often the first step in expansion—and one of the riskiest if not handled correctly. To prepare:
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Create or update your employee handbook to reflect policies on PTO, remote work, workplace safety, anti-discrimination, and more.
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Confirm classification of workers (W-2 vs. 1099 independent contractors).
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Ensure compliance with wage and hour laws, especially if you're adding hourly or part-time staff.
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Implement clear onboarding procedures to maintain a consistent company culture as you grow.
Minnesota Businesses: Minnesota’s employment laws are evolving, with recent changes to non-compete enforcement and paid sick leave. Make sure your policies reflect the most current legal standards.
Your Plan for Business Succession and Ownership Changes
Whether you’re adding new partners, taking on investors, or planning for retirement, your legal agreements should outline:
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Buy-sell agreements: These define what happens if an owner wants out or passes away.
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Operating agreements or shareholder agreements: These clarify voting rights, profit sharing, and decision-making authority.
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Succession planning documents: If you’re building a legacy business, now is the time to ensure your estate plan aligns with your business growth.
This is particularly important if you’re a family business looking to involve the next generation during or after your expansion phase.
Check Your Insurance Coverage
The more you grow, the more exposure your business has.. Review your insurance to make sure it scales with your operations:
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General liability
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Workers’ compensation
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Property and casualty
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Cybersecurity or data breach policies
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Key person insurance if you're highly dependent on one or two leaders
Don’t assume your current policies automatically cover new employees, locations, or services. Work with a business insurance broker to tailor your coverage.
Audit Your Financial and Tax Strategy
It's not just your lawyers who can help out with the growth, you should also make sure your accountant and financial advisor are involved with these growth decisions:
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Are your bookkeeping and accounting systems efficient and scalable?
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Have you budgeted for increased payroll, marketing, and operational costs?
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Are your tax filings up-to-date, and are you taking advantage of growth-related deductions or credits?
Tip: In Minnesota, businesses may also need to file local tax reports for city-specific taxes (e.g., Minneapolis business taxes), so consult with a CPA or tax attorney familiar with local rules.
Prepare for Funding or Financing
If your expansion requires outside capital, be sure your business is “due diligence ready”:
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Clean and accurate financial statements
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Updated organizational documents (articles, bylaws, operating agreements)
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Employment and IP documentation
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Permits and licenses
Investors and lenders will look at your business through a legal lens. Being prepared not only speeds up the process—it also shows that your business is professionally managed.
Do I Need a Business Attorney?
If your business is ready to grow and needs some help with the legal aspects, let's schedule a Legal Strategy Session online or by calling my Edina, Minnesota office at (612) 294-6982 or my New York City office at (646) 847-3560. My office will be happy to find a convenient time for us to have a phone call to review the best options and next steps for you and your business.
