Starting a business is an exciting time for those who are entering the world of running a business for the first time. The variety of legal considerations that need to be accounted for sometimes keeps people from this dream. With careful planning, and a discussion with a business lawyer, you can turn your business idea into a reality. There are ten legal considerations that every prospective business owner should consider before opening their doors for the first time.
1. The Name of Your Business
In most states, anyone operating a sole-proprietorship form of business will need to register a fictitious name with the state in order to operate legally. It can be considered a misdemeanor if a person operates under a business name without filing it with the state.
If you are forming a corporation, limited liability company, or partnership you will need to make sure your business name of choice is not already taken. Many states offer searchable forms for business names that are already registered. This will help to avoid any confusion or legal setbacks when it comes time to register. Each state has different laws in regards to naming a business.
2. Obtaining an Employer ID Number
An Employer ID Number (EIN) is another aspect of small business law that many business owners are going to explore. Those who need an EIN are business owners who have employees, operate as a corporation or partnership, or file employment, excise, alcohol, tobacco, or firearms taxes. If any of these above situations are true then you will need to obtain an EIN before opening your business.
3. Location and Zoning of the Business
If you are opening a physical location for your business you will need to research the local zoning laws to ensure your place of business is properly located. Cities and towns often have certain areas that are designated for residential or commercial buildings.
Almost every small business will be required to pay some form of taxes. A business lawyer should be consulted to ensure that you know how much profit to hold back in order to meet tax obligations. Businesses are required to pay quarterly taxes instead of a lump sum at the end of the year. Failure to do this can result in heavy penalties from the IRS.
5. Non-Disclosure Agreements
A business that works with suppliers or other professionals will want to keep some information private. Having a non-disclosure agreement helps to legally keep sensitive information from being shared.
6. Labor Law
If you hire employees or contractors you will need to be well versed in federal and state labor laws. This will prevent employees or contractors from suing your company because you unknowingly violate their rights.
7. Business Licensing
Many forms of businesses will need a business license in order to operate legally. This may involve a health inspection for establishments that serve food, or a license to sell liquor for bars. These can often be obtained through the state and are vital before opening a business in which they are required.
8. Protecting a Brand
You will also want to protect your brand right from the start. This will prevent others from using your brand as the business becomes more of a success. This can be done with copyrights, trademarks, patents, and other legal devices in place to help protect businesses.
9. Initial Funding
Those who need to request a small business loan should learn all the options available to them. Not only do banks lend money, but the Small Business Administration can connect you with lenders who can get you the funding you need.
10. Protecting Customer’s Privacy
Those who collect information from customers must meet strict laws in protecting that information. Many businesses will collect social security numbers, credit card numbers, or addresses in a business transaction. If a business fails to protect this information it can results in serious legal consequences.
Joe Knows Law is a law firm in McKinney, TX providing residents in the Dallas-Fort Worth Metroplex with expert legal counsel and litigation.