Seven tips from the legal perspective before starting a business

Starting a new business brings excitement and a lot of innovative ideas. It can be challenging and requires hard work and dedication. There are a few critical things involved before commencing the business called legal aspects.

Often the legal procedures are termed confusing, and one can get lost in it. Therefore, in this blog, we are going to cover seven tips to know from the legal perspective before you get going.

1. Select a Name that’s Legally Permitted to Use it And Register it.

 First things first, before you begin the card printing with the name of your company, it’s important to know there is no infringement involved.

In simple terms, it means you need to check whether the name you are thinking does not have existence, especially in same geographical locations.

Check state and federal name registries like USTPO and secretary of state. If you are planning to create a website for your business, you should also check the domain name if it’s available.

Once you are settled with the name, get it registered to prevent others from copying the trademark and company name, logo.

2. Selecting a Proper Business Plan

Planning is the first step to start a business. A well-crafted plan will lead you to the path of success. By choosing the right choice structure, it will have a significant effect on critical areas of your business.

Your business plan should consist of notable things like company’s goal, management structure, marketing strategies, payment of tax, control over business and legal liability.

A business plan provides you with internal and external guidance for your business. It can become little overwhelming if you are not aware of laws. Hence, consultation with an experienced expert on the legal structure will help you out.

3. Get Agreements Written

As you are about to start a new business, it’s essential to get a written agreement also known as an operating agreement for any deals linking your business.

The agreement will summarize all the rights and responsibilities of the business owners. It will also specify how the business will run and a few more details regarding the company.

Here are 6 points the operating agreement will have.

1. The percentage of ownership owned by each investor.

2. How the profits and losses will divide amongst all the partners.

3. How the decisions are taken on behalf of the company.

4. What happens if one of the owners dies or decides to leave the company?

5. When a new owner is added, what will happen?

6. Lastly, how will the problems resolve among the owners regarding business?

Having a written contract will help in understanding the rights and obligations. Ensure, there’s a separate written contract for the employees, outside investors and everything else in between.

4. Protect Your Intellectual Property

Intellectual Property also is known as IP laws are much complex. The intellectual property means the creations and innovative ideas of the mind. Every business has the IP whether it’s the secret recipe for running your restaurant or a business name and logo.

Giving legal protection to intellectual property is superior. Moreover, that is done through the copyright, trademarks and patents. Failing to take these appropriate steps will leave you defenseless and your ideas being stolen. Today the intellectual property lawyers are getting popular each day. Hiring one for your business is recommended by the many of the high ranking businessmen.

5.    Get Your Finances in Order

Open a bank account in the name of your company. Remember, to keep your personals separate from those accounts.

If you fail to open a bank account, then the chances are that the court will find your business, not a separate legal unit.  This will result that you are liable for all the responsible debts or lawsuits against the corporation.

Your bank account of the company name should also show a cash flow which is capable enough to take a business loan. Secondly, pay all the required taxes that is employment tax, income tax, sales taxes.

Third, get your receivables ducks in a row. If someone isn’t paying you, then pursue after them either through a debt collector or an attorney. 

6. Get all the Licenses and Permits

Many businesses need some license and permit.  Research with your state and federal services to ensure if you have the authority to proceed further with the grants of the company.

7. Get Insurances Done

Your business needs protections against all the odds, no matter what the outcome may be. It’s better to get insurance. There is much different kind of coverage like general business liability insurance, business errors and more.

 You may need to buy unemployment insurance also worker’s compensation insurance depending upon the number of employees. Get in a conversation with an insurance expert to deal with the policies that preside over the industry.

Regardless of what business you start, it can become pretty daunting if you are not aware of the legal laws. They are the most crucial aspects taken into consideration.

The tips mentioned above will give you a brief idea on what to do before starting the business. However, nothing beats like speaking to an attorney to get your bases covered. 

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