• Home
  • About
  • Contact

The Phat Startup

The Ultimate Lifestyle Blog for Entrepreneurs

  • Blog
  • Blogger Lifestyle
  • Money & Finance
  • Motivation
  • Personal Growth

Blog

Staying Above Board: 7 Business Law Tips for Startups

Don’t let your entrepreneural passion cause you to cut legal corners without knowing it. If you’re running a startup, check out these business law tips.

 

If you’re looking to join one of the approximate eight million people who are self-employed, kudos to you for taking that leap. You’re finally achieving your dreams and launching your startup.

Don’t get too excited yet, though. There are still some boring legal matters to take care of before you can officially start doing business.

Here are some of the most essential business law tips that you should be aware of when starting your startup:

1. Get Legit

Unfortunately, you can’t always get away with owning a business without filling out paperwork for your state. Depending on what business path you choose, you may be required to register your business with the state so the proper financial measures and employment laws can be accounted for.

Selecting the correct type of incorporation for your business is essential. Here’s a list of different ways you can legitimize your business:

Sole Proprietorship

If you’re the only one operating your startup, a sole proprietorship is the best route. It’s simple to become a sole proprietor–you don’t have to go through a bunch of legal paperwork for the government. Just don’t forget to get a federal employer identification number (EIN) when you decide to hire employees.

The main downside to owning a sole proprietorship is the fact that none of your personal assets will be protected. When your company gets sued, your personal belongings can be used to pay a settlement.

Limited Liability Corporation (LLC)

An LLC is legally separate from its owner. You’re required to go through the process of obtaining a tax identification number, as well as get a separate bank account for your business.

This is where LLC’s come in handy–if your business gets sued or goes bankrupt, you won’t have to sacrifice your own personal assets to pay any debts.

Partnership

The process of forming a partnership is similar to that of a sole proprietorship. The only difference is that a partnership is formed with at least two people instead of one. Like a sole proprietorship, the owners of the business will be putting their personal assets at risk if they go bankrupt or get sued.

Corporation

Establishing a corporation takes a lot of time and money. When your business is just a startup and you’re trying to save your money, it might not be a good idea to form a corporation right away.

The owners of a corporation are legally protected from having their personal assets used to pay any fees. Unlike LLCs, corporations are owned by several shareholders.

2. Trademark Your Logo and Business Name

This is one of the startup tips that you shouldn’t ignore. If you don’t want anyone copying your logo or company name, you’ll need a trademark. Trademarks are defined as a name, word, or symbol that represents your business.

You’re not legally required to register a trademark, but it’s highly recommended. You don’t want any other businesses encroaching on your profits, right? Any other companies that use a logo similar to yours and claim to be associated with your company can be sued as long as you have a trademark.

3. Hire an Attorney

Navigating startup law can be very complex. If you try to do it yourself, you might do something seriously wrong–legal issues could land you in deep trouble and result in you having to learn more about bail bonds.

Having the assistance of legal services for startups when creating patents, establishing trademarks, and forming your business can be a huge help. It’s better to get a lawyer who specializes in the area you’re stuck on. For example, if you need help with patent, get a patent attorney who can guide you through the process.

4. Create an Operating Agreement

One of the best pieces of startup advice is to create an operating agreement. You should always get an operating agreement in place before you start doing serious business.

The purpose of writing an operating agreement is to officially assign the roles and contributions of the business owners. This way, there will be no arguments or ambiguities if something happens to one of the business owners. It doesn’t matter whether or not you’re the only owner of the business either–operating agreements help you clarify policies so you don’t get confused in the future.

5. Prepare Policies for Independent Contractors

Right now, you’re probably looking for people who can help contribute to your startup. These people can be designers, writers, accountants and more. You’ll need to determine whether to consider them employees or independent contractors.

Independent contractors are defined differently from regular workers–they don’t get told what to do and how to do it. Drawing the line between the two types of workers means creating policies.

Make sure that your contract clearly states that the independent contractor you’re hiring is not to be considered an employee.

6. Obtain Permits Where Needed

You might need a permit depending on what type of business you’re running. For instance, if you plan on having a physical location for your business you may need a zoning permit.

Similarly, you’ll need a health permit if your startup involves food sales or beauty services.

Other types of permits exist as well, but you should check with your state government to see if there are any requirements for your business.

7. Be Aware of Employee Laws

Are you ready to start hiring employees? Bringing employees on board comes with rules and regulations that you need to follow.

In addition to creating an employee handbook, you’ll need to research things like worker’s compensation and wage requirements. If that doesn’t sound complicated enough, you also will be responsible for knowing about health insurance, payroll, tax withholding, and OSHA policies.

Becoming Familiar With Business Law

There’s always a learning curve when it comes to figuring out all the legal stuff for your business–complicated legal jargon and confusing business law policies can make any non-law student confused. Reading legal requirements may make your head spin, but it’s necessary to know when you’re starting up a business. The next time your startup is ready to make its next big step, make sure that you’re in accordance with the law.

Looking for more business advice? Find more articles on our money and finance blog for entrepreneurs.

 


« Arshad Madhani’s 4 Tips For Entrepreneurs On Balancing Work And Travel
How to Make a Profit Doing Homework »

About The Phat Startup

The Phat Startup was created by Mike McOwen to create a space where entrepreneur lifestyle could be focused on. We tend to live a different lifestyle than most. Entrepreneurs tend to be interested in maximizing their life, not only their profit.

Connect With Me

  • Email
  • RSS
  • Twitter
  • YouTube

Twitter Feed

Mike McOwenFollow

Mike McOwen
PhatStartupsMike McOwen@PhatStartups·
29 Dec 2017

Why is content marketing so important? Find out here: http://thephatstartup.com/money-finance/why-your-business-needs-a-content-marketing-strategy-in-2018/

Reply on Twitter 946751505146707968Retweet on Twitter 946751505146707968Like on Twitter 9467515051467079681Twitter 946751505146707968
PhatStartupsMike McOwen@PhatStartups·
9 Oct 2017

http://yescincinnati.com/

Reply on Twitter 917521630162759681Retweet on Twitter 917521630162759681Like on Twitter 9175216301627596811Twitter 917521630162759681
PhatStartupsMike McOwen@PhatStartups·
25 Sep 2017

Wow, interesting

Forbes@Forbes

Millennial men are more likely than women to default on student debt http://on.forbes.com/60148NudC

Reply on Twitter 912458136849698816Retweet on Twitter 912458136849698816Like on Twitter 9124581368496988162Twitter 912458136849698816
PhatStartupsMike McOwen@PhatStartups·
25 Sep 2017

I LOVE Toronto! Miss that place

GO Transit@GOtransit

Explore Toronto’s art scene with GO! Enjoy special late night service during Nuit Blanche on Sept 30. https://cards.twitter.com/cards/v2l8b/4ttwx

Reply on Twitter 912458028355670017Retweet on Twitter 912458028355670017Like on Twitter 912458028355670017Twitter 912458028355670017
Retweet on TwitterMike McOwen Retweeted
BuffaloSabresBuffalo Sabres@BuffaloSabres·
25 Sep 2017

Batter's up! ⚾️ Spending quality time with our friends at @MiracleLeagueWN.

4
Reply on Twitter 912457252057034754Retweet on Twitter 91245725205703475454Like on Twitter 912457252057034754319Twitter 912457252057034754
Load More...

Blog Ideas That Make Money

8 Reasons Why Everyone Shouldn’t Like You

How to Organize a Successful Workshop for Your Employees

Why Read Red Rock Secured Reviews When Creating Your Retirement Plan

Search

Copyright © 2023 · The Phat Startup

Copyright © 2023 · Divine Theme on Genesis Framework · WordPress · Log in