Starting a new business can be an extremely exciting and exhilarating experience for a young entrepreneur. However, in many instances their enthusiasm and eagerness causes them to neglect a few basic steps pertaining to law and regulations that are applicable to their new venture. Here are some essential things that you must keep in your mind when you start a new business.
Incorporate Your Business
Setting up an incorporation or LLC can be extremely advantageous for business owners. As a matter of fact, it should be the first step when opening a new business. Perhaps the biggest benefit of incorporation is separate entity concept, which means that you are treated as a separate entity from your business. Consequently, your personal assets will remain protected in case any of your client or vendor initiate a litigation or lawsuit against your business.
Acquire a Business License
Many businesses, regardless of their size and magnitude, are required to obtain state, federal, or at least a local license in order to legally sell products or provide services to their clients. Even home businesses and freelancers can be subjected to this law. Therefore, it is imperative that you make sure that you meet legal requirements applicable to your business before you commence your trade.
These licenses are relatively inexpensive and may save you from potential costly fines in the future. Procuring services of an experienced business lawyer can particularly be helpful to ensure that your business is in compliance with laws and regulations prevailing in your state.
Prepare Contracts In Advance
In small startups and businesses, owners tend to perform most of the work themselves. However, at some stage, every business may require extra help. In that case, you may hire employees or subcontractors to manage your workload. Therefore, you must always have formal and standard contracts prepared in advance, which may set basic terms of the job and details pertaining to their payment and liability.
Moreover, there may be much information that you would like to keep confidential, hence you may also have a non-disclosure agreement (NDA) at your disposal. These contracts will ensure that your trade secrets and information remain secure and protected. It can be highly beneficial for your business to acquire the help of a skillful business lawyer to ensure that your contracts are enforceable and minimize your exposure to financial obligations.
Obtain an Employer ID Number (EIN)
Having an employer ID number (EIN) can be an excellent idea. Moreover, it is required under many state laws and circumstances. EIN acts like a Social Security Number (SSN) for your business, therefore, allows you to protect your personal SSN in many instances, most of which are related to payment purposes. Whether your business is incorporated or in a partnership, it is always recommended to get a separate EIN for your business.
These are few of the basic points of consideration which must be addressed by any individual looking to start up a new venture. Your business may be subjected to different legal technicalities depending upon the industry and legal framework you operate. Therefore, you and your business will highly benefit from obtaining services of a seasoned business lawyer.
If you wish to get further information regarding business law, contact the offices of John Grundy at (330) 637-9030 to schedule a free consultation session with an experienced business lawyer.