5 Legal Things I Wish I Knew Before Starting A Business

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Starting a business, store front open signStarting a business is an exciting yet stressful venture that often leaves you with more questions than answers. In order to make your transition to a small business owner more seamless, here are five questions you should ask a lawyer to get their insight regarding how to start a business.

What Type of Business Should It Be Classified As?

There are a variety of business types that you should take into consideration when starting a business. Factors such as the size of your company, your expected revenue and the amount of liability you can afford to take on will play a role in your decision.

A small business can be structured as a sole proprietorship, corporation, limited partnership or nonprofit corporation. Here’s a basic breakdown of each type but you should ask a lawyer to provide legal advice and any additional information to make sure that you are choosing the right option for your small business.

  • Sole Proprietorship – An informal business with one owner where you are considered personally liable to any debts or lawsuits that your business may incur. This is often a reasonable option for a very small business with a low legal and tax liability risk.
  • General Partnership – Same as a sole proprietorship except that there is more than one owner of the business, but all owners will be held accountable to any legal issues with the business.
  • Corporation/Limited Liability Company (LLC)/Limited Liability Partnership – To protect your personal assets and keep them separated from the business, you can form one of these business types. Under these circumstances, any financial losses are limited to what you have invested in your company. An LLC is the most common form of a small businesses.
  • Limited Partnership – Under this business classification, some partners may be held liable for business losses while others are not.
  • Nonprofit Organization – If you’re providing a public service and are considered tax-exempt, you will likely qualify as a nonprofit organization.

Choosing which type of business that you plan to own plays an important role in how you manage it and how it is taxed so make sure that you’re choosing wisely and ask a lawyer for their legal advice.

How Do I Handle Trademarks and Copyright Infringements?

Whether it is your company’s name, logo or another unique identifier of your business, you will want to protect yourself from copycat threats. You can seek the legal advice of an attorney before you trademark your brand to make sure that you’re not infringing on an existing brand and a lawyer can also offer guidance if you encounter any copyright infringements by others once you are an established business. Once you’re ready to get a trademark, you can register with the U.S. Patent and Trademark Office. Find additional information on Trademark Infringement Evidence here.

How Do I Handle Filing Business Tax?

Getting the right lawyer and accountant to handle your business tax forms is an important step to avoid legal hassles with the IRS. An attorney can provide you with the guidelines that you need to follow to ensure that you are compliant with tax laws while an accountant can handle the specific numbers.

What Types of Contracts Do I Need?

Business contracts are important in order to protect yourself from potential lawsuits. You will want to have separate contracts to use with vendors, clients, employees, investors and partners. By having everything in writing with a signed agreement by all parties, you will eliminate any possible confusion regarding everyone’s roles and responsibilities. Consult with a business lawyer to help you draw up a personalized contract that will cover all the specific elements of your business.

How Do I Ensure That I’m Being Compliant with Local, State and Federal Laws?

At all levels of government, there are business laws that you must abide. From having a business license to paying fees, you are responsible for knowing and understanding these laws. An attorney can help you find all the rules you need to follow and make sure that you are aware of any changes to the laws to make sure that you remain in compliance with them.

Remember, if you ever find yourself with questions when starting a business, don’t hesitate to ask a lawyer. By seeking legal advice upfront, you could avoid extensive legal trouble in the future.

Additional Helpful Articles:
Why Small Companies Need Effective Legal Counsel
What Can a Lawyer Do for My Small Business?