You’ll have plenty to worry about while you’re getting your startup business off the ground, so you probably won’t be able to spend years learning the ins and outs of every federal, state, and local law that applies to your business. With that in mind, we put together this list of the 10 crucial legal checkpoints for any startup. You’ll likely want to hand most of these off to a qualified attorney and we have the best Sarasota has to offer at Norton Hammersley.
10. Get your name right. Once you’ve settled on a name for your business, you’ll need to check that it’s available, and that it doesn’t step on the toes of any other entities with similar names (or operating in similar industries).
9. ID your business. You’ll need a Federal Tax ID Number or Employer Identification Number. This is so the IRS can keep tabs on you. There’s no way around this, so just get it out of the way.
8. Protect your property. Your business name isn’t the only thing you’ll need to protect. You’ll need to protect your intellectual property, too. If you’ve developed product names, processes, or any other content you’d like to keep as your own, it most likely can be protected by a trademark, patent, or copyright.
7. Decide on a legal structure. There are many, many considerations involved, the most common types of business: the sole proprietorship; the LLC; the “C” corporation; and the “S” corporation. The structure you choose will have significant implications for your taxes and your potential liability. If you are not sure contact us and we can help.
6. Permits and more permits! You’ll likely need permits and licenses for your startup, from the state and local level on up to the federal. These could include: a general business license; fire, zoning, and land use permits; liquor and wine licenses; professional licenses; etc.
5. Get your contracts organized. You may want to set up contracts for your physical space and any supplies you’ll need. It’s also common for a business to keep employees, partners, and other entities under contract. This is often a highly desirable situation, on the theory that “good fences make good neighbors.” Just make sure you’ve got a good lawyer writing up those contracts, and you’ll sleep a lot better at night.
4. Hiring and firing. You may not be an expert on employment law now, but if you’re planning on having even one employee, you’d better become one quickly, or at least meet with a lawyer before you jump in. Get a sense of what you’re in for by speaking to us.
3. Watch out! Ignorance of the law, as they say, is no excuse. Make sure you understand what you are getting into and speak to an attorney for the best advice. A business entity may be required to conform strictly to the laws governing its particular business form—and failure to conform can result in the loss of any benefits or protections offered by those laws.
2. Multi-State Operations. There’s a reason businesses tend to start out local and then go national (and not the other way around): Selling in multiple states is complicated. But if you’re brazen enough to take the plunge right away, as many internet businesses now must, then you’ll need to know the laws and regulations that apply to interstate business in your sector.
1. Money, money, money! It’s often the difference between the companies that make it and the ones that don’t. If you’re lucky enough to get significant capital investment, you won’t want it jeopardized by the careless records you kept when you were still running your business out of your garage. Depending on what sort of company you’re running, you’ll have to abide by a specific set of laws pertaining to capital investment and distributions. Talk to an attorney up front so you’ll know what to watch out for.
Norton Hammersley of Sarasota business and tax law practice provides expert planning and advice to our individual and corporate clients. Our attorneys assist our clients in all aspects of their business, including the selection and formation of entities under which to operate, preparation and review of agreements, sales, purchases and mergers of businesses, obtaining financing and funding for businesses and employee relations.
For more information please contact our Sarasota Business and Tax attorneys John Compton or John Lopez