Apart from all the aspects of starting or growing your small business, perhaps legal considerations are the most important ones. Like determining the structure, complying with the labor laws, properly filing your taxes, and so on.
By any chance, if you make mistakes in these steps, it’ll lead to disastrous legal consequences. Sometimes it can be almost impossible to recover from.
That’s why, here we have shed light on the key legal considerations for small business owners. Let’s know each one in a little bit of detail.
1# Choose The Right Business Structure
One of the key legal considerations that you have to decide on is the business structure. That’s because it decides the most important components of your business.
Like how you will pay the taxes, or how the profits will be distributed. It also includes who will own the company.
Four types of business entities for small businesses to choose from are-
- Sole proprietorship
- Partnership
- Limited liability company (LLC)
- Corporation
Every small business owner has different needs. So, you should choose the one that fits your business the best.
2# Register Your Business
Coming next to the key consideration- register your business. After you decide on the structure, you should register your business with the local, state, or federal agencies. That’s how your business will be legally recognized and you can avoid conflicts.
However, to register your business, you just need to complete the following actions.
- Choose an address for your small business
- Register the business name
- Register with the IRS or Internal Revenue Service
- Register your business with the local, state, or federal agencies
3# Draft Clear Contracts and Agreements
For running a business, paperwork is just the lifeblood. Nobody wants but unfortunately, if a business partner fails to live up to the expectations or wants to take advantage financially, clear contracts can help to protect you as a small business owner. That’s why for drafting contracts, be careful and conscious. You should work with a business attorney in this matter.
4# Protect Intellectual Property
What’s intellectual property? It’s the innovation and ideas that you create in your mind for your business. Like product designs, names, or artworks. No other business can use it and you have all rights to own this property.
For its protection, obtain a trademark, copyright, and utility patent. You should do it based on the type of intellectual property you want to protect.
5# Open A Business Bank Account
Legally, if you have a business bank account, it will be a great help for your business. It will enable you to track and report on both your income and expenses.
That’s why Orlando, FL Criminal Defense Lawyers generally advise business owners to have a business account before you even start receiving payments from your clients. It will be even better if you do it when you start the business.
6# Obtain Insurance
You become responsible legally and financially for the well-being of your company the moment you decide on the business. It is your business. So unfortunately if any financial or legal crisis arises, it’ll impact you directly.
That’s why to protect your business against the risk of liability, and losses, obtain insurance. It will also protect you and the security of your future.
7# Have Accurate Documentation and Tax Filing
From the very first year of your business, you have to ensure accurate tax filing and documentation. By any chance, if you make any mistake in this step, it’ll lead to legal penalties and actions.
That’s why it’ll be a wise decision to invest in a competent accountant or tax professional to prevent such potential issues.
8# Know and Implement Employment and Labor Laws
For a founder like you, knowing and implementing employment and labor laws is absolutely essential. You have to protect the rights of all parties related to your business. For example, you, your employee, or your business.
In your business, you should follow fair practice. Moreover, ensure that there is no discrimination to avoid problems down the line.
Conclusion
No wonder, it can be fulfilling to run a small business. But it also requires following laws and regulations to make it a success. Consider the key aspects that we mentioned to protect your business from any legal threats. Consult with an attorney to get to know more.
