Orange County Business & Commercial Law Blog

When it comes to starting a construction business, Californians are going to have a lot on their minds. Where should the headquarters be? What is your operating capital? If a question about the form of the business is not one of your first few questions, however, it may be best to stay home.

• Why does it matter what kind of company you form?

It may matter a lot immediately but it will almost certainly matter more in the future. Some of the first concerns are how a company is managed and who owns it. Later, people may want to transfer or sell their interests. If the company is named in a lawsuit, it will certainly matter who may hold financial liability and how it is structured.

• How are companies formed to shield owners from liability?

Builders know they may run into a variety of legal challenges, from zoning issues to breaches of contract with subcontractors. California communities have caused some recent trouble with new restrictions that aim to reduce the number of new stand-alone housing units and increase the stock near transportation hubs to reduce pressure on expanding towns and cities.

• How can builders respond to legal issues?

Retaining legal counsel for businesses is often a good idea. Lawyers who are more familiar with specific business entities as well as the legal background of commerce may fare better defending their interests. Otherwise, legal advice is often helpful with specific types of construction litigation.

• How can builders manage costs as profit margins shrink?

Starting your own business is one of the best ways in California to declare your independence. It is one of the most American acts to take on all of your own potential while also taking on all of the risk in a business venture. Therefore, it's very important to plan a business' creation or expansion carefully to avoid failure.

Many industries offer more risk to entrepreneurs than others. Products and services with extra regulation are often the ones that may pose the greatest dangers to consumers if they are badly planned or misused by the people who buy them.

From plumbing to landscape architecture, few ventures bring together more disparate industries and professionals than construction. Contractors and management firms often have to put their money forward while getting projects off the ground, which can cause problems during sudden delays or cancellations.

Many types of construction are subject to delays that are not part of most long-term project planning. For example, a Santa Clara construction project is temporarily coming to a halt over its possible effect on a property with historic claims. A preservation society has filed a lawsuit against the city until it completes an environmental impact report on the project's plans.