Starting a Business – 7 Legal Requirements to Consider
Estimates are that there are 1.35 million attorneys in the United States, and that around 80,000+ of those are in Washington, DC. Why is this important to your new business venture? Many of the non-government attorneys are seeking lawsuits to get a hefty fee, while the government lawyers are often busy regulating or investigating your business type or activities.
The key is to get prepared legally when starting a business, and here are some of the key considerations to protect your business, self, family, and assets from missteps in the legal arenai. The costs of letting some of this get by you can be far higher than getting the help of a business attorney in setting up properly.
- Are You Required to Publicize Your Company? – This is something that is state-specific, as it is not required everywhere. However, if it is, you must take specific actions to publicize the intent to form your company, especially a corporation. If required and you skip this step, you could face fines and lose the protection of the corporate veil.
- Protect Your Personal Assets – This begins with choosing the business entity structure appropriate for your business and personal financial situations. There is no protection for personal assets when you form as a Sole Proprietorship. Consult with an attorney for legal aspects and the possible formation of a C-Corporation, S-Corporation, or LLC, Limited Liability Company. Determine your business-specific risks for appropriate insurance coverage. Also consider an umbrella insurance policy that kicks in and covers you when other insurance will not or is exhausted.
- Properly Insure Your Employees – Just about everywhere in the country, you will be required to provide worker’s compensation insurance to cover them for injuries on the job. Check with the proper authorities and an attorney to see what insurance coverage you should provide for employees.
- Check Trademarks and Patents if Applicable – It is exciting to start a new business, and naming it is one of the things that make it fun. You may be registering your name in the state where the business is located, and you will probably want to devise a logo image. Be sure to check that you are not violating a registered trademark of another company with your name or logo. If you are producing something, be sure there is not a patent that you could be violating.
- Must Your Business be Licensed? – Are licenses or local permitting required for your business? Definitely check to see if your chosen location and facility are in a place appropriately zoned and see if a permit is required. Licensing is common for many occupations and businesses, so investigate if your business will need to get a license and the requirements.
- Get Your Federal Tax Liability Ducks in a Row – As a sole proprietor, you can operate your business using your Social Security number. For other business entities, such as LLCs, S-Corporations, and C-Corporations, you must get a TIN, Taxpayer Identification Number or EIN, Employer Identification Number. This is critical at the very beginning so that you are reporting with the proper identity.
- Work with an Attorney – A good business attorney is a necessity in today’s litigious society. For government compliance and for legal actions, you should have a relationship with an attorney for advice. Whether it is for business formation, in-house or customer legal issues or contracts and documents, an experienced attorney is worth the cost of their services.
Get excited about forming your new business but get the basics in place so your excitement is not shot down by a costly legal blunder.