Everything from the name of your business to how you structure it has legal implications. This is why starting a business is not as easy as you may think.
As a young entrepreneur, you have to research the legal aspects of starting a business before you make the move. Without this, it means you are taking a big entrepreneurship risk and starting on the wrong side of the law.
This could see you attract a fine, jail sentence, or other consequences. To operate within the confines of the law, follow these four legal issues when starting your business.
#1]]. Your business Name
Table of Contents
You may land in trouble if you start operating using a certain name, only for you to discover someone else owns it. It’s your legal obligation to do a thorough name search through the Secretary of State Office to find out if your desired name is in use or not. If it’s not in use, reserve the name and complete the necessary paperwork.
#2]]. The business structure to use
Deciding which business structure best suits you is tricky for most people. To simplify it, first determine the best tax structure for your company and the liability issues that may be associated with your business.
If your product negatively affects someone, for instance, you want to protect yourself from the lawsuit, so you are not held liable when your company gets sued.
The opposite is also true. If you are charged with a DUI or in possession of some pot, you will need to hire a Nashville criminal attorney, but you will want to keep this issue away from negatively affecting your company. Also, consider your growth plan and what it will mean for your business. Do you plan to go public, or will you remain private focused?
#3]]. Written agreements
Do you have partners in your business? It’s essential to have in writing the obligation and rights each partner holds in the company. Agreements could range from partnerships, shareholder, and employment agreements.
Verbal agreements are mostly inadmissible in court because the battle between you and the other party is likely to end in a tag-of-words. Clearly written documents make the work easier for you, the other party involved, and for the court if or when you need concrete evidence to support your case.
If you are operating with vendors, written agreements will protect your trade secrets through non-disclosure agreements.
#4]]. Business licenses
You will need several licenses and permits depending on the business structure you decide to go with. Research the type of permits you need by visiting your municipality to find out the rules and regulations of the kind of business you are starting.
At the least, you need a business permit and tax registration certificates to start operations. Food businesses need an additional retail food license, meat license, bakery license, dairy operator’s license, and a non- alcoholic beverage license.
You may also need health-related permits for your employees. Although these are the most crucial legal issues every entrepreneur should know, it’s wise to hire the services of a lawyer. Many startups get into legal trouble because they did not have the right information. With a lawyer on your side, you will safeguard your investment.