By YEC
When starting your business, it is important to get all legal matters in order as quickly as possible.
If you’re a new business owner, making sure your business is compliant with all local, state, and federal regulations is an important job.
Some legal issues require immediate consideration and you want to address them as soon as possible. Help out, Council for Young Entrepreneurs members share 10 essential tasks they should do right away when starting a business.
When starting your company, it is important to have all legal matters in order as soon as possible. What do you think is a legal consideration that new entrepreneurs should immediately start working on and why?
Contents
- 1 1. Set up a business mailing address
- 2 2. Check for pre-existing trademarks
- 3 3. Find a good, experienced lawyer
- 4 4. Establish the business as an LLC or corporation
- 5 5. Put financial agreements on paper
- 6 6. If necessary, legally disclose your business
- 7 7. Understand your estimated tax payments
- 8 8. Make sure you follow the correct payment rules
1. Set up a business mailing address
It’s important to set up a business mailing address, especially if you run an outside business and don’t have a physical location. This address will be used in all your email correspondence, legal documents and more. You can set this up through a registered agent or through a company that handles corporate mailboxes. Please note that you cannot use a PO box to receive certain government forms and you may need a physical mailing address. —Nathalie Lussier, AccessAlly
2. Check for pre-existing trademarks
One legal issue that needs to be addressed when starting a business is trademark issues. When creating your brand or developing a product, always check if someone has trademarked the name. If so, you have to go back to the drawing board. The last thing you want is to infringe on a registered trademark and get into legal trouble before you get your business off the ground. —John Brackett, Smash Balloon LLC
3. Find a good, experienced lawyer
Engage a good lawyer who understands corporate law, finance and mergers and acquisitions. It’s impossible to know what future legal issues you’ll face upon incorporation, but good attorneys know what’s in store for you, even if you don’t. A good law firm can amend existing documents and help with negotiations. It is important to have a good lawyer who knows how to structure legal matters. —Sean Adler, GZI
4. Establish the business as an LLC or corporation
When you first start out, one of the most important legal considerations is to incorporate the business as a limited liability company (LLC) or corporation. That’s because every other step of the business opening process requires the legal name of the business. It’s what makes it possible to be one federal tax ID, which is also required for important financial elements such as bank accounts and insurance policies. —Richard Fong, Reliable technology
5. Put financial agreements on paper
Always record financial agreements in writing. Money can easily break friendships and relationships and you don’t want any misunderstandings to arise in the future. The agreement should include the nature of the return on investment. This is a serious expression of your commitment to the company and your intention to make money from it. —Bryce Welker, Crush the GRE test
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6. If necessary, legally disclose your business
One of the first things you should do before starting your business is to determine whether you need to legally publicize your business. Some cities and states require business owners to publicly announce that they have formed a business before they are recognized. Failure to follow this step can lead to hefty fines, confusion and legal trouble. —John Turner, SeedProd LLC
7. Understand your estimated tax payments
Talk to a CPA about your estimated tax payments, especially if you offer professional services. It would be a shame if you lost your driver’s license because of the back taxes you owe. In the first few years of business, you don’t want to underestimate your contribution to the IRS or get into financial trouble. Estimated quarterly tax payments are ideal. —Givelle Lamano, Lamano Law Firm
8. Make sure you follow the correct payment rules
Make sure you are compliant with payment issues. There are many rules governing how you can accept payments from your customers. This is especially important if you work with customers who live in other countries, as you need to take exchange rates and taxes into account. By working with a legal professional, you can ensure that your business is following all the right rules. —Syed Balchi, WPB Beginner
About the author
Council for Young Entrepreneurs (YEC) is an invite-only organization made up of the world’s most successful young entrepreneurs.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.