Engagement Letter - Business/Corporate

ENGAGEMENT LETTER — BUSINESS / CORPORATE

Firm Letterhead

[FIRM NAME]
[FIRM ADDRESS LINE 1]
[FIRM ADDRESS LINE 2]
[CITY], [STATE] [ZIP CODE]
Telephone: [____________________]
Facsimile: [____________________]
Email: [____________________]
Website: [____________________]

Date: [__/__/____]

VIA [HAND DELIVERY / CERTIFIED MAIL / EMAIL]

[CLIENT NAME — ENTITY OR INDIVIDUAL]
[ATTN: PRIMARY CONTACT NAME AND TITLE]
[CLIENT ADDRESS LINE 1]
[CLIENT ADDRESS LINE 2]
[CITY], [STATE] [ZIP CODE]

Re: Engagement for Business / Corporate Legal Services — [MATTER DESCRIPTION]
Our File No.: [________________________________]

Dear [PRIMARY CONTACT NAME]:

Thank you for selecting [LAW FIRM NAME] ("Firm," "we," or "us") to provide legal services for [CLIENT NAME] ("Client," "Company," or "you"). This Engagement Letter, together with the attached Fee Agreement, sets forth the terms and conditions under which the Firm will provide legal services. Please read this letter carefully and contact us with any questions before signing.

This letter constitutes a binding agreement between the Client and the Firm. Please retain a copy for your records.

1. CLIENT IDENTIFICATION

1.1 Identity of the Client

IMPORTANT — ABA Model Rule 1.13 (Organization as Client): When the Firm represents a business entity, the Firm's client is the entity itself, acting through its duly authorized constituents, and not any individual owner, officer, director, member, shareholder, partner, or employee.

Client (Entity): [________________________________]
Entity Type: ☐ Corporation ☐ Limited Liability Company (LLC) ☐ Limited Partnership (LP) ☐ General Partnership ☐ Sole Proprietorship ☐ Professional Corporation / PLLC ☐ Nonprofit Corporation ☐ Other: [________________]
State of Formation: [________________________________]
Primary Contact: [________________________________]
Title/Role: [________________________________]

1.2 Individual Representation

☐ Entity Only: The Firm represents only the entity identified above. No individual is separately represented.
☐ Individual Also Represented: In addition to the entity, the Firm will separately represent the following individual(s): [________________________________]. A separate conflict waiver is attached.
☐ Pre-Formation / Individual Only: The entity has not yet been formed. The Firm currently represents [INDIVIDUAL NAME] in connection with the formation of the entity. Upon formation, the Firm's client will be the entity.

If you are an owner, officer, director, or employee of the Company, please understand that the Firm does not represent you individually unless a separate written agreement is established. You have the right to consult your own attorney for personal legal matters, including matters where your interests may differ from those of the Company.

2. SCOPE OF REPRESENTATION

2.1 Matters Included

The Firm agrees to provide legal services in connection with the following (check all that apply):

Entity Formation and Governance:
☐ Entity formation and organization (articles of incorporation/organization, bylaws/operating agreement)
☐ Employer Identification Number (EIN) application
☐ Entity selection and structuring advice (LLC vs. corporation vs. partnership analysis)
☐ Corporate governance documents (board resolutions, member/shareholder consents, meeting minutes)
☐ Registered agent services
☐ Annual compliance filings and maintenance
☐ Beneficial Ownership Information (BOI) report filing under the Corporate Transparency Act (31 U.S.C. § 5336)
☐ Amendments to organizational documents
☐ Foreign qualification (registration in states other than formation state)
☐ Conversion or domestication of entity type

Contracts and Commercial Transactions:
☐ Contract drafting and review (general commercial agreements)
☐ Non-disclosure agreements (NDAs) / confidentiality agreements
☐ Independent contractor agreements
☐ Master services agreements
☐ Licensing agreements (IP, software, technology)
☐ Joint venture or strategic alliance agreements
☐ Distribution or supply agreements
☐ Terms of service and privacy policies

Financing and Investment:
☐ Equity financing (seed round, Series A, etc.)
☐ Convertible note or SAFE agreements
☐ Private placement memorandum (PPM) preparation
☐ Securities exemption compliance (Regulation D, Rule 506(b), Rule 506(c))
☐ Investor / subscription agreements
☐ Commercial loan document review
☐ SBA loan documentation review

Mergers, Acquisitions, and Dispositions:
☐ Asset purchase agreement
☐ Stock / membership interest purchase agreement
☐ Merger agreement
☐ Due diligence coordination
☐ Letter of intent (LOI) / term sheet negotiation
☐ Business valuation coordination (legal aspects)
☐ Post-closing integration (legal aspects)

Employment and HR:
☐ Employment agreements (executives, key employees)
☐ Non-compete / non-solicitation agreements
☐ Employee handbook review
☐ Equity compensation plans (stock options, restricted stock, phantom equity)
☐ Independent contractor classification analysis

Intellectual Property:
☐ Trademark search and registration
☐ Copyright registration
☐ IP assignment agreements
☐ Trade secret protection policies

Regulatory Compliance:
☐ Industry-specific regulatory compliance: [________________________________]
☐ Data privacy compliance (state privacy laws)
☐ Anti-corruption / FCPA compliance
☐ Export control compliance

Dispute Resolution:
☐ Commercial dispute negotiation and resolution
☐ Demand letter drafting and response
☐ Mediation and arbitration
☐ Litigation (pre-trial through trial)

2.2 Matters Expressly Excluded

Unless separately agreed to in writing, the following are not included:

• Tax advice, tax return preparation, or tax planning (consult a CPA or tax attorney)
• Patent prosecution or patent litigation
• Immigration matters (work visas, employment authorization)
• Environmental law compliance
• Real estate transactions (beyond lease review if checked above)
• Labor relations, collective bargaining, or NLRB matters
• Bankruptcy or insolvency proceedings
• Insurance coverage analysis or claims
• Accounting, bookkeeping, or financial statement preparation
• Investment advice or financial advisory services
• Lobbying or government relations
• Appeals from any court or administrative proceeding
• Matters outside the specific scope described in Section 2.1

3. FEE ARRANGEMENT

3.1 Fee Structure

The Firm will charge for services under the following arrangement (check one or more):

☐ Monthly General Counsel Retainer:
Monthly retainer fee: $[________]/month for up to [____] hours of legal services.
Additional hours beyond the retainer are billed at $[____]/hour.
The retainer is payable on the [____] of each month in advance.
Retainer includes: [________________________________]
Retainer excludes: [________________________________]

☐ Hourly Fee:
Attorney rates: $[____]/hour (partners); $[____]/hour (senior associates); $[____]/hour (associates); $[____]/hour (paralegals).
Retainer deposit: $[________], held in trust and applied to invoices.
Replenishment threshold: $[________].

☐ Flat Fee — Entity Formation Package:
Total flat fee: $[________] for entity formation, including:

• Entity selection consultation
• Preparation and filing of formation documents
• Operating agreement / bylaws
• EIN application
• Organizational resolutions
• BOI report filing
  Does NOT include: securities filings, licenses, permits, or ongoing compliance.

☐ Flat Fee — Specific Project:
Project: [________________________________]
Total flat fee: $[________]
Payable: [________________________________]

☐ Blended Rate:
All attorney time billed at a blended rate of $[____]/hour regardless of seniority.

☐ Success Fee / Transaction Fee:
Base fee of $[________] plus a success fee of $[________] or [____]% of the transaction value upon closing of [TRANSACTION DESCRIPTION]. Subject to applicable ethics rules.

3.2 Billing Practices

• Invoices issued: ☐ Monthly ☐ Biweekly ☐ Upon project completion
• Payment due within [____] days of invoice date
• Late payment charge: [____]% per month on overdue balances
• Billing increment: [____]-minute increments (typically 6-minute / 0.1 hour)
• The Firm will provide billing narratives describing services performed
• Client may request detailed billing statements at any time

3.3 Costs and Expenses

You are responsible for costs and expenses, including:

☐ State filing fees (incorporation, LLC formation, amendments, annual reports)
☐ Registered agent fees
☐ UCC filing fees
☐ Trademark filing fees (USPTO)
☐ Copyright filing fees
☐ Court filing fees (litigation matters)
☐ Corporate service company charges
☐ Travel expenses (if pre-approved)
☐ Overnight delivery and courier charges
☐ Large-scale copying and document production
☐ Expert and consultant fees (with prior approval)
☐ Electronic data room costs (for transactions)
☐ Third-party due diligence reports

3.4 Client Billing Guidelines

If the Client has internal billing guidelines, outside counsel guidelines, or cost management requirements, these must be provided to the Firm before work begins. The Firm will use reasonable efforts to comply with Client billing guidelines but reserves the right to discuss any guidelines that may conflict with professional obligations or unreasonably limit the Firm's ability to provide competent representation.

4. CLIENT RESPONSIBILITIES

4.1 Cooperation and Information

You agree to:

☐ Designate [________________________________] as the primary contact with authority to give instructions and make decisions on behalf of the Client
☐ Provide complete and accurate information regarding the Client's business, finances, and operations
☐ Respond to Firm communications within [____] business days
☐ Provide timely decisions and approvals when required
☐ Maintain and provide access to corporate books and records
☐ Notify the Firm of any material changes in the business, disputes, or regulatory inquiries
☐ Comply with all legal obligations, including filing deadlines and regulatory requirements

4.2 Document Preservation

The Client must preserve all documents and communications potentially relevant to any matter in which the Firm is providing legal services. This includes electronic documents, emails, text messages, and voicemails. The Firm may issue specific document preservation directives as needed.

5. RISKS AND DISCLOSURES SPECIFIC TO BUSINESS / CORPORATE MATTERS

5.1 No Guarantee of Business Outcomes

The Firm cannot guarantee any particular business result, including whether a transaction will close, whether a contract will be enforceable, or whether a business will succeed. Legal advice is based on the Firm's professional judgment and cannot eliminate all business risk.

5.2 Entity Selection and Liability

The choice of entity type (corporation, LLC, partnership, etc.) has significant legal, tax, and liability implications. While the Firm provides legal analysis of entity options, the Firm does not provide tax advice. You should consult a qualified tax professional regarding the tax consequences of entity selection.

5.3 Corporate Veil and Personal Liability

Forming a business entity (corporation or LLC) provides limited liability protection to its owners. However, this protection may be lost ("veil piercing") if:

• The entity is inadequately capitalized
• Corporate formalities are not observed (meetings, minutes, resolutions)
• Personal and business funds are commingled
• The entity is used as an alter ego or instrumentality of the owner
• The entity engages in fraud or injustice

Maintaining proper corporate governance is essential to preserving limited liability protection. The Firm can advise on governance requirements but is not responsible for the Client's ongoing compliance unless a separate governance maintenance agreement is established.

5.4 Securities Law Compliance

If the Company issues equity interests (stock, membership interests, partnership interests) to investors or employees, federal and state securities laws likely apply. Violations of securities laws can result in civil liability, rescission of transactions, and criminal penalties. Key considerations include:

• Federal: Securities Act of 1933 (registration or exemption required for all securities offerings); Regulation D exemptions (Rule 506(b), Rule 506(c))
• State: Blue sky law compliance and notice filings
• Accredited Investor Requirements: Regulation D offerings may be limited to accredited investors
• Anti-Fraud Provisions: Apply regardless of exemptions (SEC Rule 10b-5)

5.5 Corporate Opportunity Doctrine and Fiduciary Duties

Officers, directors, and controlling members/partners owe fiduciary duties to the entity, including:

• Duty of Care: Make informed business decisions in good faith
• Duty of Loyalty: Act in the best interest of the entity; avoid self-dealing and conflicts of interest
• Corporate Opportunity Doctrine: A fiduciary may not usurp business opportunities belonging to the entity without proper disclosure and authorization

The Firm can advise on fiduciary obligations but does not monitor individual compliance.

5.6 Beneficial Ownership Reporting (Corporate Transparency Act)

Effective January 1, 2024, the Corporate Transparency Act (31 U.S.C. § 5336) requires most small business entities to file Beneficial Ownership Information (BOI) reports with the Financial Crimes Enforcement Network (FinCEN). Failure to comply can result in civil penalties of up to $591/day and criminal penalties of up to $10,000 and 2 years imprisonment.

6. COMMUNICATION POLICY

6.1 Primary Communication Method

☐ Email: [________________________________]
☐ Telephone: [________________________________]
☐ Client portal: [________________________________]
☐ U.S. Mail

6.2 Response Times

The Firm will respond to communications within [____] business days. For general counsel retainer clients, the Firm will provide priority response times as agreed.

6.3 Privilege Considerations

Communications between the Firm and the Company's authorized representatives are protected by the attorney-client privilege. To preserve this privilege:

• Limit distribution of privileged communications to those with a need to know
• Mark privileged communications as "PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION"
• Do not forward privileged communications to third parties without Firm authorization
• Be aware that communications with outside auditors, regulators, or opposing parties are generally not privileged

7. CONFLICTS OF INTEREST

7.1 Entity vs. Individual Interests

The Firm represents the Company. If a situation arises where the interests of the Company diverge from those of individual owners, officers, directors, or employees:

• The Firm's duty of loyalty runs to the Company
• Individual constituents will be advised to seek independent counsel
• The Firm may be required to take action on behalf of the Company that is adverse to individual interests (consistent with ABA Model Rule 1.13(b))

7.2 Adverse Representation

☐ The Client consents to the Firm's representation of other clients in matters unrelated to this engagement, even if such clients are competitors of the Client, provided no confidential information is used.
☐ The Client does not consent to adverse representation and requests further discussion.

7.3 Current Conflict Check

☐ No conflicts identified
☐ Conflict(s) identified and waiver attached: [________________________________]

8. TERMINATION OF REPRESENTATION

8.1 Client's Right to Terminate

The Client may terminate this engagement at any time by providing written notice. All fees and costs incurred through the date of termination are due immediately.

8.2 Firm's Right to Withdraw

The Firm may withdraw as permitted by the Rules of Professional Conduct, including for failure to pay fees, failure to cooperate, or ethical conflict. If litigation is pending, withdrawal is subject to court approval.

8.3 Transition of Matters

Upon termination, the Firm will cooperate in the orderly transition of matters to successor counsel, including transferring files, providing relevant information, and executing any necessary substitution of counsel documents.

9. FILE RETENTION AND DESTRUCTION

The Firm will retain Client files for [____] years after conclusion of the engagement. After that period, files may be destroyed. Original corporate documents (certificates of formation, stock certificates, minute books) will be returned to the Client upon request.

10. DATA SECURITY AND CONFIDENTIALITY

The Firm maintains reasonable safeguards to protect Client confidential information, including:

• Secure document storage and transmission
• Access controls on client files
• Staff confidentiality obligations
• Compliance with applicable data protection requirements

The Client should notify the Firm of any special data security requirements or regulatory obligations that may apply.

11. NO GUARANTEE OF OUTCOME

THE FIRM MAKES NO PROMISES OR GUARANTEES REGARDING THE OUTCOME OF ANY MATTER, INCLUDING THE SUCCESS OF ANY BUSINESS VENTURE, THE ENFORCEABILITY OF ANY CONTRACT, OR THE RESULT OF ANY TRANSACTION, DISPUTE, OR REGULATORY PROCEEDING.

12. MULTI-STATE JURISDICTION NOTES

12.1 California

• Written fee agreements required for matters exceeding $1,000 (Cal. Bus. & Prof. Code § 6148).
• Cal. Corp. Code governs corporations; Cal. Corp. Code §§ 17701.01–17713.13 governs LLCs.
• California Franchise Tax Board requires a minimum $800 annual franchise tax for LLCs and corporations (with recent exemptions for new entities in their first year).
• California's Revised Uniform Limited Liability Company Act applies to all LLCs.
• California does not recognize Series LLCs.

12.2 New York

• 22 NYCRR Part 1215 requires written engagement letters for matters exceeding $3,000.
• N.Y. Business Corporation Law (BCL) governs corporations; N.Y. LLC Law governs LLCs.
• New York requires publication of LLC formation notice in two newspapers (N.Y. LLC Law § 206).
• New York imposes an annual filing fee for LLCs based on gross income.
• Professional service entities must use PC (Professional Corporation) or PLLC (Professional Limited Liability Company) forms.

12.3 Texas

• Texas Disciplinary Rules of Professional Conduct, Rule 1.04.
• Texas Business Organizations Code (BOC) provides a unified statutory framework for all entity types.
• Texas imposes a franchise tax (margin tax) on most entities.
• Texas recognizes Series LLCs (Tex. BOC § 101.601 et seq.).
• No state income tax, but franchise tax considerations are important for entity selection.

12.4 Florida

• Florida Bar Rule 4-1.5 governs fee agreements.
• Florida Revised LLC Act (Fla. Stat. Chapter 605) governs LLCs; Florida Business Corporation Act (Fla. Stat. Chapter 607) governs corporations.
• Florida imposes an annual report filing fee for all entities.
• No state personal income tax, but corporate income tax applies (Fla. Stat. Chapter 220).
• Florida's Sunbiz (Division of Corporations) handles all entity filings.
• Florida has adopted the Revised Uniform Limited Partnership Act.

13. ACKNOWLEDGMENT AND ACCEPTANCE

By signing below, the authorized representative acknowledges that:

☐ The Firm represents the entity, not individual owners, officers, or directors (unless separately agreed)
☐ The signatory has authority to execute this agreement on behalf of the Client
☐ The Client has read and understands this Engagement Letter and the attached Fee Agreement
☐ The Client understands the scope of representation, fee arrangement, and responsibilities
☐ The Client understands that the Firm cannot guarantee any outcome
☐ The Client has received a copy of this Engagement Letter and all attachments

Signature Block

AGREED AND ACCEPTED:


CLIENT:

____________________________________________
[ENTITY NAME]

By: ____________________________________________
[AUTHORIZED REPRESENTATIVE NAME] (Printed)
Title: [________________________________]

____________________________________________    Date: [__/__/____]
[SIGNATURE]


ATTORNEY:

____________________________________________
[ATTORNEY NAME], Esq.
[LAW FIRM NAME]

____________________________________________    Date: [__/__/____]
[ATTORNEY SIGNATURE]

14. ATTACHMENTS CHECKLIST

☐ Fee Agreement (retainer, hourly, flat fee, or hybrid terms)
☐ State-Required Fee Disclosures (CA: Bus. & Prof. Code § 6148; NY: 22 NYCRR 1215; FL: Bar Rule 4-1.5)
☐ Conflict of Interest Waiver (if applicable)
☐ Outside Counsel Billing Guidelines Acknowledgment (if applicable)
☐ Authorized Representative Certification
☐ Entity Formation Questionnaire (if applicable)
☐ Due Diligence Request List (if applicable)
☐ Privacy Policy / Electronic Communication Consent Form
☐ Data Security Addendum (if applicable)
☐ Fee Arbitration Notice (as required by applicable state bar rules)

SOURCES AND REFERENCES

• ABA Model Rules of Professional Conduct: https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/
• ABA Model Rule 1.13 (Organization as Client): https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_13_organization_as_client/
• Securities Act of 1933: https://www.law.cornell.edu/uscode/text/15/chapter-2A
• SEC Regulation D: https://www.law.cornell.edu/cfr/text/17/part-230/subpart-ECFR0c2ab6ea53e3a0a
• Corporate Transparency Act (FinCEN BOI Reporting): https://www.fincen.gov/boi
• Delaware General Corporation Law: https://delcode.delaware.gov/title8/c001/
• Corporate Opportunity Doctrine: https://www.law.cornell.edu/wex/corporate_opportunity
• California Corporations Code: https://leginfo.legislature.ca.gov/faces/codesTOCSelected.xhtml?tocCode=CORP
• New York BCL: https://www.nysenate.gov/legislation/laws/BSC
• New York LLC Law § 206 (Publication): https://www.nysenate.gov/legislation/laws/LLC/206
• Texas Business Organizations Code: https://statutes.capitol.texas.gov/Docs/BO/htm/BO.1.htm
• Florida Revised LLC Act: http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0605/0605ContentsIndex.html