{"id":5521,"date":"2016-04-04T10:48:01","date_gmt":"2016-04-04T15:48:01","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/starting-a-business\/starting-a-business-legal-faqs.html"},"modified":"2026-05-26T01:23:00","modified_gmt":"2026-05-26T06:23:00","slug":"starting-a-business-legal-faqs","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/starting-a-business-legal-faqs.html","title":{"rendered":"Starting a Business: Legal FAQ"},"content":{"rendered":"\n<div class=\"fl-sectionWithSidebar fl-container fl-flex fl-flex-wrap fl-gap30  wp-container-core-columns-is-layout-9d6595d7 fl-sectionWithSidebar fl-container fl-flex fl-flex-wrap fl-gap30\">\n<div class=\"fl-section-main fl-page-articles fl-section-main fl-section-main-full-width\"><h1 class=\"fl-no-margin-top\">Starting a Business: Legal FAQ<\/h1>\n\n<section class=\"fl-gutenberg-byline\">\n    <div class=\"fl-gutenberg-byline-content\">\n                    By <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\">FindLaw Staff<\/a> | Legally reviewed by <a\n                href=\"https:\/\/www.findlaw.com\/company\/our-team\/catherine-hodder-esq\/\">Catherine Hodder, Esq.<\/a>\n                | Last updated\n        <time>\n                            May 26, 2026\n                    <\/time>\n    <\/div>\n\n            <div class=\"fl-gutenberg-byline-editorial-note fl-text-sm\">\n            <p>Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n        <\/div>\n    \n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-legally-reviewed\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Legally Reviewed\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>This article has been written and reviewed for legal accuracy, clarity, and style by <a href=\"https:\/\/www.findlaw.com\/company\/our-team.html\">FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with <a href=\"https:\/\/www.findlaw.com\/company\/company-history\/editorial-policy.html\">our editorial standards<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n\n    <details class=\"fl-gutenberg-byline-toggle fl-gutenberg-byline-fast-checked\">\n        <summary>\n            <i class=\"fl-gutenberg-byline-icon\" aria-hidden=\"true\"><\/i>\n            Fact-Checked\n        <\/summary>\n\n        <div class=\"fl-gutenberg-byline-toggle-content\">\n            <p><em>The last updated date refers to the last time this article was reviewed by FindLaw or one of our <a href=\"https:\/\/www.findlaw.com\/company\/our-team\/contributing-authors.html\">contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please <a href=\"https:\/\/lawyers.findlaw.com\/?fli=bylinelink\" target=\"_blank\" rel=\"noopener\">contact an attorney in your area<\/a>.<\/em><\/p>\n\n        <\/div>\n    <\/details>\n<\/section>\n\n\n    <div class=\"fl-callout-text article-blockquote\">\n        <p>When starting a business, an entrepreneur has many legal questions about business formation, liability protection, financing, contracts, and taxation. A business lawyer can help a business owner navigate the many legal questions that arise.<\/p>\n\n    <\/div>\n\n\n\n<div><p><span data-term-id=\"54206924\">Legal requirements<\/span> are among the most critical aspects of starting a business. <span data-term-id=\"54206933\">Small-<\/span><span data-term-id=\"54206919\">business<\/span><span data-term-id=\"54206933\"> owners<\/span> should understand legal procedures and laws when forming their businesses or <span data-term-id=\"54206915\">startups<\/span>.<\/p>\n<p>Depending on your business, you may want help from a <span data-term-id=\"54206913\">business lawyer<\/span>.<\/p>\n<p>This article answers some of the most common legal questions\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/start-up-basics.html\"><span data-term-id=\"54206915\">startup<\/span> <span data-term-id=\"54206919\">business owners<\/span><\/a>\u00a0ask.<\/p>\n<p><b><i>Form your LLC with confidence.\u202f<a href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115288\/26746?subId1=starting-a-business-legal-faqs-in-content\" rel=\"sponsored noopener\" data-cta=\"Biz LZ - LATL Callout\" data-cta-url=\"legalzoom.com\" target=\"_blank\">Our trusted partner LegalZoom has packages starting at $0 + filing fees.<\/a><\/i><\/b><\/p>\n<ul>\n<li><a href=\"#Structure\">Which legal structure should I choose for my small business?<\/a><\/li>\n<li><a href=\"#Loan\">What is the best way to get a business loan?<\/a><\/li>\n<li><a href=\"#Register\">Do I need to legally register my business?<\/a><\/li>\n<li><a href=\"#EIN\">How do I get a federal employer identification number?<\/a><\/li>\n<li><a href=\"#Management\">What management documents does my business need to start?<\/a><\/li>\n<li><a href=\"#Name\">How do I choose and protect a business name?<\/a><\/li>\n<li><a href=\"#Licenses\">What licenses, registrations, and permits does my small business need?<\/a><\/li>\n<li><a href=\"#Taxes\">What business taxes do I have to pay? How do I pay them?<\/a><\/li>\n<li><a href=\"#Employees\">What legal requirements come with having employees?<\/a><\/li>\n<li><a href=\"#Maximum\">What is the maximum number of employees I can have as a small business?<\/a><\/li>\n<li><a href=\"#Liability\">How do I protect my company from liability and lawsuits?<\/a><\/li>\n<li><a href=\"#IntellectualProperty\">How do I protect my intellectual property?<\/a><\/li>\n<li><a href=\"#Insurance\">What types of insurance does my business need?<\/a><\/li>\n<li><a href=\"#Lawyer\">Do I need a lawyer to start my business?<\/a><\/li>\n<\/ul>\n<h2><a id=\"Structure\"><\/a>Which legal structure should I choose for my small business?<\/h2>\n<p>There are several\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/choosing-a-legal-structure.html\">legal structures<\/a>\u00a0for businesses. Each type of structure has its own requirements for formation. The tax status and owner\u2019s <span data-term-id=\"54206927\">personal liability<\/span> also vary depending on the <span data-term-id=\"54206932\">type of <\/span><span data-term-id=\"54206920\">business<\/span><span data-term-id=\"54206920\"> structure<\/span>.<\/p>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/sole-proprietorships.html\"><span data-term-id=\"54206916\">Sole proprietorships<\/span><\/a>\u00a0are for the self-employed <span data-term-id=\"54206919\">business owner<\/span>. With <span data-term-id=\"54206916\">sole proprietorships<\/span>, there is no distinction between the business and the owner. A <span data-term-id=\"54206916\">sole proprietorship<\/span> structure offers no limited <span data-term-id=\"54206940\">liability protection<\/span> for the owner \u2014 meaning the owner is personally liable for all business activities.<\/p>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/the-small-business-partnership-general-and-limited-partnerships.html\">Partnerships<\/a>\u00a0are businesses with more than one owner. Partnerships can take various forms, including:<\/p>\n<ul>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/legalblogs\/small-business\/how-to-protect-yourself-in-a-business-partnership\/\"><span data-term-id=\"54206943\">General partnership<\/span><\/a><\/p>\n<\/li>\n<li>\n<p><span data-term-id=\"54206942\">Limited partnership<\/span> (LP)<\/p>\n<\/li>\n<li>\n<p>Limited liability partnership (LLP)<\/p>\n<\/li>\n<li>\n<p>Joint venture<\/p>\n<\/li>\n<\/ul>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/llcs.html\"><span data-term-id=\"54206917\">Limited liability companies<\/span> (LLC)<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/what-is-a-pllc-.html\">professional <span data-term-id=\"54206917\">limited liability companies<\/span> (PLLC)<\/a>\u00a0combine the best aspects of a <span data-term-id=\"54206916\">sole proprietorship<\/span> and a corporation. The owners are protected from <span data-term-id=\"54206927\">personal liability<\/span> but are not required to observe corporate formalities.<\/p>\n<p>These formations also offer a tax advantage. An <a href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115288\/26746?subId1=starting-a-business-legal-faqs%20wct2509241927429jz91&amp;auto-aff-llc\" target=\"_blank\" rel=\"noopener\">LLC<\/a> is not subject to double taxation like a <span data-term-id=\"54206930\">C corporation<\/span>, where the company pays taxes, and the <span data-term-id=\"54206929\">shareholder<\/span> pays <span data-term-id=\"54206935\">income tax<\/span>. An LLC enjoys\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/tax-differences-between-c-and-s-corporations.html\">pass-through taxation<\/a>, similar to a partnership or <span data-term-id=\"54206916\">sole proprietorship<\/span>.<\/p>\n<p>A PLLC is specifically for owner-members who have a\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/licenses-and-permits-overview.html\">professional license<\/a>. Owner-members must have proof of licensure before\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/register-your-business-name-state-resources.html\">registering the business<\/a>. Only some states provide formation processes for PLLCs. For example, California instead allows professionals to form professional corporations (PCs), which the IRS may tax as C or <a href=\"https:\/\/www.kqzyfj.com\/click-100799097-15053486?sid=starting-a-business-legal-faqs%20wct250924192742hl1ff&amp;auto-aff-s-corp\" target=\"_blank\" rel=\"noopener\"><span data-term-id=\"54206939\">S corporations<\/span><\/a> (explained below).<\/p>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/corporations.html\">Corporations<\/a>\u00a0are legal entities separate from their owners. This\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/types-of-business-structures.html\"><span data-term-id=\"54206920\">business structure<\/span><\/a>\u00a0shields owners from <span data-term-id=\"54206927\">personal liability<\/span> (except in\u00a0<a href=\"https:\/\/www.findlaw.com\/legalblogs\/small-business\/corporation-basics-piercing-the-veil-and-personal-responsibility\/\">certain situations<\/a>). Owners of a corporation are called <span data-term-id=\"54206929\">shareholders<\/span> \u2014 investors or other financial providers with a share or stake in your business. Corporations\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/shareholders-dividends-and-taxes.html\">distribute profits to <span data-term-id=\"54206929\">shareholders<\/span> as dividends<\/a>.<\/p>\n<p>Corporations are complex and typically\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/pros-and-cons-why-form-a-corporation.html\">have more <span data-term-id=\"54206915\">startup<\/span> costs<\/a>\u00a0than other legal structures. There are three general types of corporations:<\/p>\n<ul>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/what-is-a-c-corporation-.html\"><span data-term-id=\"54206930\">C corporation<\/span><\/a>\u00a0(C corp)<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/what-is-an-s-corporation-.html\"><span data-term-id=\"54206939\">S corporation<\/span><\/a>\u00a0(S corp)<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/what-is-a-nonprofit-.html\">Nonprofit\u00a0<\/a>corporation<\/p>\n<\/li>\n<\/ul>\n<p>The primary\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/tax-differences-between-c-and-s-corporations.html\">difference between a C corp and an S corp<\/a>\u00a0is taxation and the number of allowed owners. Like an <a href=\"https:\/\/legalzoomcominc.pxf.io\/c\/4851649\/2115288\/26746?subId1=starting-a-business-legal-faqs%20wct250924192742ydt6e&amp;auto-aff-llc\" target=\"_blank\" rel=\"noopener\">LLC<\/a>, a <span data-term-id=\"54206909\">small business<\/span> corporation (S Corp) enjoys pass-through taxation provided certain IRS requirements are satisfied.<\/p>\n<p>There is also a growing movement for corporations to certify as B corps (short for\u00a0<a href=\"https:\/\/www.findlaw.com\/legalblogs\/small-business\/what-is-a-public-benefit-corporation\/\">benefit corporations<\/a>). This private certification is awarded to for-profit corporations by\u00a0<a href=\"https:\/\/www.bcorporation.net\/en-us\/\" target=\"_blank\" rel=\"noopener\">B Lab<\/a>, a global nonprofit that promotes social and environmental responsibility. Certified B corps can choose a C corp or S corp tax and liability structure.<\/p>\n<p>A\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/non-profit-organizations.html\">nonprofit corporation<\/a>\u00a0has no <span data-term-id=\"54206929\">shareholders<\/span> and issues no dividends. It is tax-exempt as a 501(c) organization. Nonprofits use all profits to fund their charitable missions. While nonprofits are often exempt from local taxes (like sales tax and property tax) they may still need to pay\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/payroll-taxes-introduction.html\">employee taxes<\/a>\u00a0to federal and state governments.<\/p>\n<p>The legal structure you choose for your <span data-term-id=\"54206926\">business entity<\/span> depends on your budget, tax needs, and risk tolerance.<\/p>\n<h2><a id=\"Loan\"><\/a>What is the best way to get a business loan?<\/h2>\n<p>Several factors impact your eligibility for\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/getting-a-loan-for-a-small-business.html\">business loans<\/a>, including:<\/p>\n<ul>\n<li>\n<p>How much\u00a0<a href=\"https:\/\/dictionary.findlaw.com\/definition\/collateral.html\" target=\"_blank\" rel=\"noopener\">collateral\u00a0<\/a>you have<\/p>\n<\/li>\n<li>\n<p>Your\u00a0<a href=\"https:\/\/www.findlaw.com\/consumer\/credit-banking-finance\/credit-score-information-how-to-manage-your-credit-score.html\">credit history<\/a><\/p>\n<\/li>\n<li>\n<p>The strength of your\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/before-you-start-your-business-try-starting-a-business-plan.html\"><span data-term-id=\"54206937\">business plan<\/span><\/a><\/p>\n<\/li>\n<\/ul>\n<p>It is generally best to exhaust other forms of funding before\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/getting-a-loan-for-a-small-business.html\">pursuing loans to start your business<\/a>. If payments on the loan come due before your company earns enough to cover them, it can put intense pressure on your cash flow.<\/p>\n<p>Before going to the bank to borrow, look into other<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/sources-of-small-business-financing.html\">\u00a0financing options:<\/a><\/p>\n<ul>\n<li>\n<p>Investors<\/p>\n<\/li>\n<li>\n<p>Private placement<\/p>\n<\/li>\n<li>\n<p>Loans from\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/getting-money-from-family-and-friends-for-a-business.html\">friends and family<\/a><\/p>\n<\/li>\n<li>\n<p>Business incubators and accelerators<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/sec-equity-crowdfunding-rules-an-introduction.html\">Crowdfunding<\/a><\/p>\n<\/li>\n<\/ul>\n<p>If you take out a loan to\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/getting-a-loan-for-a-small-business.html\">fund your business<\/a>, research lenders and compare interest rates. Check with the\u00a0<a href=\"https:\/\/www.sba.gov\/funding-programs\/loans\" target=\"_blank\" rel=\"noopener\">U.S. <span data-term-id=\"54206951\">Small Business<\/span><span data-term-id=\"54206951\"> Administration<\/span><\/a>\u00a0(<span data-term-id=\"54206934\">SBA<\/span>) and local business development organizations. Agencies with subsidized programs usually offer better rates and more favorable terms.<\/p>\n<p>Talk to an accountant and a\u00a0<a href=\"https:\/\/lawyers.findlaw.com\/business-commercial-law\/\" target=\"_blank\" rel=\"noopener\">business attorney<\/a>\u00a0before applying for financial assistance so you choose the right option for long-term success.<\/p>\n<h2><a id=\"Register\"><\/a>Do I need to legally register my business?<\/h2>\n<p>Most states require registering your business with the\u00a0<a href=\"https:\/\/dictionary.findlaw.com\/definition\/secretary-of-state-s-office.html\" target=\"_blank\" rel=\"noopener\"><span data-term-id=\"54206952\">secretary of state<\/span>\u2019s office<\/a>. For most <span data-term-id=\"54206909\">small businesses<\/span>, this is as straightforward as registering your\u00a0<a href=\"https:\/\/www.sba.gov\/business-guide\/launch-your-business\/choose-your-business-name\" target=\"_blank\" rel=\"noopener\"><span data-term-id=\"54206923\">business name<\/span><\/a>\u00a0and legal structure with state and local municipalities.<\/p>\n<p>Besides filing for a federal\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/getting-an-employer-identification-number-ein.html\"><span data-term-id=\"54206936\">Employer Identification Number<\/span><\/a>\u00a0(EIN), most small companies aren\u2019t required to register with the federal government unless they are federally regulated businesses.<\/p>\n<p>The forms you need to file to\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/registering-the-name-of-your-business.html\">register your business<\/a>\u00a0will vary depending on the <span data-term-id=\"54206932\">type of <\/span><span data-term-id=\"54206926\">business<\/span><span data-term-id=\"54206926\"> entity<\/span> you have created.<\/p>\n<p>You could benefit from the help of a lawyer to file your business\u2019s registration paperwork. Companies of all sizes can benefit from consulting a\u00a0<a href=\"https:\/\/lawyers.findlaw.com\/business-commercial-law\/\" target=\"_blank\" rel=\"noopener\">business attorney<\/a>\u00a0for help drafting\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/state-guide-articles-of-incorporation.html\">articles of incorporation<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/writing-corporate-bylaws.html\">corporate <span data-term-id=\"54206931\">bylaws<\/span><\/a>.<\/p>\n<p>For simple <span data-term-id=\"54206915\">startup<\/span> businesses, FindLaw\u2019s\u00a0<a href=\"https:\/\/www.findlaw.com\/forms\/business-formation.html\">Legal Forms and Services<\/a>\u00a0area may provide all the help you need to assemble legally sound <span data-term-id=\"54206928\">business formation<\/span> documents.<\/p>\n<h2><a id=\"EIN\"><\/a>How do I get a federal employer identification number?<\/h2>\n<p>You don\u2019t need an\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/employer-identification-number-ein-faq.html\">Employer ID Number<\/a>\u00a0(EIN) to register your business as a <span data-term-id=\"54206916\">sole proprietorship<\/span>. You can use your personal Social Security number for tax purposes or\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/how-to-get-an-ein-for-an-llc.html\">get an EIN<\/a>\u00a0to safeguard your Social Security number.<\/p>\n<p>All other <span data-term-id=\"54206908\">new businesses<\/span> will need to get a tax ID number in the form of an EIN after filing formation papers with the <span data-term-id=\"54206952\">secretary of state<\/span>. Only secure your EIN directly from the\u00a0<a href=\"https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/apply-for-an-employer-identification-number-ein-online\" target=\"_blank\" rel=\"noopener\">Internal Revenue Service (IRS) website or mail-in application<\/a>.<\/p>\n<p>There is no fee for securing an EIN. Third-party websites not affiliated with the IRS will ask for fees, but those are scams.<\/p>\n<h2><a id=\"Management\"><\/a>What management documents does my business need to start?<\/h2>\n<p>The forms you will need depend on the\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/business-structures-which-one-is-best-for-your-business.html\"><span data-term-id=\"54206932\">type of business<\/span><\/a>\u00a0you are forming. You may need any of the following:<\/p>\n<ul>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/legalblogs\/small-business\/5-clauses-every-partnership-agreement-should-include\/\">Partnership agreement<\/a><\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/writing-corporate-bylaws.html\"><span data-term-id=\"54206931\">Bylaws<\/span><\/a>\u00a0for a corporation or nonprofit<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/sample-llc-operating-agreement.html\">Operating agreement<\/a>\u00a0for an LLC<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/shareholder-buyout-agreements.html\"><span data-term-id=\"54206929\">Shareholder<\/span> agreement<\/a><\/p>\n<\/li>\n<\/ul>\n<p>Even at <span data-term-id=\"54206915\">startup<\/span>, you may need\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/employment-contract-provisions.html\">employment contracts<\/a>\u00a0and\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/what-is-a-non-disclosure-agreement-.html\">nondisclosure agreements<\/a>\u00a0for investors, partners, and employees.<\/p>\n<h2><a id=\"Name\"><\/a>How do I choose and protect a business name?<\/h2>\n<p>For a <span data-term-id=\"54206916\">sole proprietorship<\/span>, a <span data-term-id=\"54206923\">business name<\/span> can be as simple as the <span data-term-id=\"54206919\">business owner<\/span>\u2019s name. You can choose another name too. A <span data-term-id=\"54206923\">business name<\/span> needs to be easy to remember and distinct from competitors.<\/p>\n<p>FindLaw\u2019s\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business.html\">Starting a Business section<\/a>\u00a0has several articles about\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/choosing-your-business-name.html\">choosing the right <span data-term-id=\"54206923\">business name<\/span><\/a>.<\/p>\n<p>Before registering a name, you must ensure it is legally available. The broader your market, the more thorough your search needs to be. You can investigate whether the name is available yourself. However, it\u2019s strongly recommended you hire a\u00a0<a href=\"https:\/\/lawyers.findlaw.com\/intellectual-property-law\/\" target=\"_blank\" rel=\"noopener\"><span data-term-id=\"54206913\">business lawyer<\/span> who focuses on <span data-term-id=\"54206914\">intellectual property<\/span><\/a>\u00a0to do the extensive search for you.<\/p>\n<p>You may also operate under a\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/fictitious-business-names-do-you-need-one.html\">fictitious <span data-term-id=\"54206923\">business name<\/span><\/a>\u00a0(dba, or &#8220;doing business as&#8221;). You must register fictitious <span data-term-id=\"54206923\">business names<\/span> with the state or county. Check with your <span data-term-id=\"54206949\">state laws<\/span> regarding fictitious <span data-term-id=\"54206923\">business names<\/span>.<\/p>\n<p>To protect your <span data-term-id=\"54206923\">business name<\/span>, consider filing a state and federal\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/trademarks.html\">trademark<\/a>. A federal trademark allows you to protect your brand nationally and receive attorney\u2019s fees and damages when someone else uses it without permission.<\/p>\n<h2><a id=\"Licenses\"><\/a>What licenses, registrations, and permits does my small business need?<\/h2>\n<p>Your <span data-term-id=\"54206909\">small business<\/span>\u2019s\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/licenses-and-permits-overview.html\">license and <span data-term-id=\"54206954\">permit requirements<\/span><\/a>\u00a0vary depending on your business activity and where you operate. All businesses need a city or county general business license. You may need both.<\/p>\n<p>Certain businesses require a\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/starting-a-business-license-and-permit-checklist.html\">professional license<\/a>\u00a0from the relevant state board or regulatory agency. These include:<\/p>\n<ul>\n<li>\n<p>Health care providers<\/p>\n<\/li>\n<li>\n<p>Accountants and other finance professionals<\/p>\n<\/li>\n<li>\n<p>Personal care and cosmetologists (like hair stylists, nail technicians, and estheticians)<\/p>\n<\/li>\n<li>\n<p>Legal services and attorneys<\/p>\n<\/li>\n<li>\n<p>Childcare providers<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/cannabis-law\/starting-a-cannabis-business.html\">Cannabis businesses<\/a><\/p>\n<\/li>\n<\/ul>\n<p>County, state, and federal governments issue most business licenses and registrations. The local government typically issues permits for zoning and building matters.<\/p>\n<p>Permits for natural resource use are typically issued at the federal or state level. To learn more, see\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/business-licenses-and-permits.html\">Business Licenses and Permits<\/a>.<\/p>\n<h2><a id=\"Taxes\"><\/a>What business taxes do I have to pay? How do I pay them?<\/h2>\n<p>While your <span data-term-id=\"54206947\">tax obligations<\/span> will vary depending on the type of legal structure you choose for your business, there are a couple of key\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/start-up-tax-issues.html\"><span data-term-id=\"54206915\">startup<\/span> tax issues<\/a>\u00a0to know:<\/p>\n<ul>\n<li>\n<p>You must keep\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/taxes-the-importance-of-record-keeping.html\">good records<\/a>.<\/p>\n<\/li>\n<li>\n<p>You should keep your business bank account and personal bank account separate.<\/p>\n<\/li>\n<\/ul>\n<p>The law has much to say about how you manage your\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/taxation-and-accounting-terms.html\">bookkeeping\u00a0<\/a>and tax returns. The law requires you to record all business transactions using a specific accounting method. Research what your industry and location require for\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/taxes-types-of-records-to-keep.html\"><span data-term-id=\"54206953\">record-keeping<\/span> obligations<\/a>.<\/p>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/keeping-business-and-personal-taxes-separate.html\">Commingling funds<\/a>\u00a0and failing to observe other business formalities may subject you to <span data-term-id=\"54206927\">personal liability<\/span>. This is true even if you operate under a registered <span data-term-id=\"54206926\">business entity<\/span> like an LLC or corporation.<\/p>\n<h2><a id=\"Employees\"><\/a>What legal requirements come with having employees?<\/h2>\n<p>First, you must know how to properly\u00a0<a href=\"https:\/\/www.findlaw.com\/employment\/hiring-process\/contractor-or-employee.html\">classify your employees<\/a>\u00a0\u2014 especially if you believe you have contractors. Misclassifying an employee as an\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/hiring-independent-contractors-overview.html\">independent contractor<\/a>\u00a0could expose your company to costly penalties and back wages. Sometimes it\u2019s clear and sometimes it\u2019s not. If you are unsure how to classify your employees, consult an\u00a0<a href=\"https:\/\/lawyers.findlaw.com\/employment-law-employee\/\" target=\"_blank\" rel=\"noopener\"><span data-term-id=\"54206918\">employment law<\/span> attorney<\/a>.<\/p>\n<p>You will also be responsible for collecting\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/business-taxes\/small-business-tax-information-faq.html\">employment taxes<\/a>\u00a0(both <span data-term-id=\"54206948\">state taxes<\/span> and federal taxes). You also must forward the business and employee share of Social Security and Medicare taxes.<\/p>\n<p>Most employers must pay into their state\u2019s\u00a0<a href=\"https:\/\/www.findlaw.com\/employment\/losing-a-job\/unemployment-insurance-overview.html\">unemployment insurance<\/a>\u00a0and carry\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/liability-and-insurance\/workers-compensation-overview.html\">workers\u2019 compensation insurance<\/a>. You can learn more about the legal responsibilities of having employees at the\u00a0<a href=\"https:\/\/www.sba.gov\/business-guide\/manage-your-business\/pay-taxes\" target=\"_blank\" rel=\"noopener\"><span data-term-id=\"54206951\">Small Business<\/span><span data-term-id=\"54206951\"> Administration<\/span><\/a>\u00a0(<span data-term-id=\"54206934\">SBA<\/span>).<\/p>\n<p>Second, you\u00a0<a href=\"https:\/\/www.findlaw.com\/civilrights\/discrimination\/employment-discrimination-federal-laws.html\">cannot discriminate against your employees<\/a>\u00a0and applicants based on age, race, sex, religion, national origin, genetic makeup, or disability. This extends to job application questions and on-the-job interactions. You must also adhere to\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/equal-pay-and-compensation-discrimination-facts.html\">Equal Pay requirements<\/a>\u00a0that include benefits.<\/p>\n<h2><a id=\"Maximum\"><\/a>What is the maximum number of employees I can have as a small business?<\/h2>\n<p>It depends on your <span data-term-id=\"54206932\">type of business<\/span>.<\/p>\n<p>The <span data-term-id=\"54206951\">Small Business<\/span><span data-term-id=\"54206951\"> Administration<\/span> (<span data-term-id=\"54206934\">SBA<\/span>) sets the standards for what qualifies as a <span data-term-id=\"54206909\">small business<\/span>. The <span data-term-id=\"54206934\">SBA<\/span> uses three factors to determine whether a company meets the criteria for a <span data-term-id=\"54206909\">small business<\/span>:<\/p>\n<ul>\n<li>\n<p>Number of employees<\/p>\n<\/li>\n<li>\n<p>Average annual revenue<\/p>\n<\/li>\n<li>\n<p>Industry<\/p>\n<\/li>\n<\/ul>\n<p>The number of employees you can have and maintain <span data-term-id=\"54206909\">small business<\/span> status varies by industry and ranges between 250 and 1,500.<\/p>\n<h2><a id=\"Liability\"><\/a>How do I protect my company from liability and lawsuits?<\/h2>\n<p>Every company faces some\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/liability-and-insurance\/business-liability.html\">legal liability<\/a>. These liabilities can look like:<\/p>\n<ul>\n<li>\n<p>A customer falling in your shop<\/p>\n<\/li>\n<li>\n<p>A defective product<\/p>\n<\/li>\n<li>\n<p>A mistake in handling an employee complaint<\/p>\n<\/li>\n<\/ul>\n<p>One of the early things you need to do to limit risk to your business is to purchase\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/liability-and-insurance\/small-business-insurance-plans.html\">business insurance<\/a>. The kind of insurance you need depends on the <span data-term-id=\"54206932\">type of business<\/span> you are operating. A\u00a0<a href=\"https:\/\/lawyers.findlaw.com\/business-commercial-law\/\" target=\"_blank\" rel=\"noopener\">business attorney<\/a>\u00a0can advise on the particular\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/what-to-expect-business-liability.html\">areas of liability<\/a>\u00a0your company may face.<\/p>\n<h2><a id=\"IntellectualProperty\"><\/a>How do I protect my intellectual property?<\/h2>\n<p>As a <span data-term-id=\"54206933\">small-<\/span><span data-term-id=\"54206919\">business<\/span><span data-term-id=\"54206933\"> owner<\/span>, you may need to trademark or patent your\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property.html\"><span data-term-id=\"54206914\">intellectual property<\/span><\/a>.<\/p>\n<ul>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/registering-a-trademark.html\">Trademarks\u00a0<\/a>protect symbols, names, slogans, and logos<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/nature-of-patent-and-patent-rights.html\">Patents\u00a0<\/a>protect inventions (think proprietary products and processes)<\/p>\n<\/li>\n<li>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/what-is-copyright.html\">Copyrights\u00a0<\/a>protect original artistic works in tangible forms like books and movies<\/p>\n<\/li>\n<\/ul>\n<p><span data-term-id=\"54206919\">Business owners<\/span> can handle most simple\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/trademarks-and-business-names.html\">trademark registrations<\/a>\u00a0at the <span data-term-id=\"54206945\">U.S. Patent<\/span> and <span data-term-id=\"54206946\">Trademark Office<\/span> (<span data-term-id=\"54206944\">USPTO<\/span>). However, some business ideas may need more protection than a simple trademark. <span data-term-id=\"54206922\">Entrepreneurs<\/span> often work with patent attorneys to\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/intellectual-property\/is-your-invention-patentable.html\">secure a patent<\/a>\u00a0for their inventions.<\/p>\n<h2><a id=\"Insurance\"><\/a>What types of insurance does my business need?<\/h2>\n<p>The\u00a0<a href=\"https:\/\/www.findlaw.com\/consumer\/insurance\/business-insurance.html\">types of business insurance<\/a>\u00a0you need for your small business depend on your industry and any contract requirements you may have. The following are common insurance plans for startup businesses:<\/p>\n<ul>\n<li>Business operations policy, known as a BOP<\/li>\n<li>Property insurance<\/li>\n<li>Premises liability insurance that covers slip and fall and injuries at your business<\/li>\n<li>Workers&#8217; compensation insurance (this is a requirement in most states where you have employees or you will face a fine)<\/li>\n<li>Errors and omissions for professional service businesses like consultants, lawyers, and doctors<\/li>\n<li>Automobile insurance if your business involves driving<\/li>\n<\/ul>\n<p><a href=\"https:\/\/www.findlaw.com\/smallbusiness\/liability-and-insurance\/small-business-insurance-plans.html\">Small business insurance plans<\/a>\u00a0vary in cost and scope, so research before committing.<\/p>\n<h2><a id=\"Lawyer\"><\/a>Do I need a lawyer to start my business?<\/h2>\n<p>You do not necessarily\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness\/starting-a-business\/do-i-need-a-lawyer-to-start-a-business-.html\">need a lawyer to start a business<\/a>. It depends on your business\u2019s complexity, the amount of advice and support you have from other sources, and your business knowledge.<\/p>\n<p>There are several points throughout starting and running your business you may want help from an attorney:<\/p>\n<ul>\n<li>\n<p>Some would-be <span data-term-id=\"54206922\">entrepreneurs<\/span> seek <span data-term-id=\"54206912\">legal advice<\/span> when they have developed a <span data-term-id=\"54206937\">business plan<\/span>. They hope to catch potential legal problems early.<\/p>\n<\/li>\n<li>\n<p>Some seek legal help with <span data-term-id=\"54206928\">business formation<\/span>, although the owner can register simple businesses.<\/p>\n<\/li>\n<li>\n<p>Some pursue <span data-term-id=\"54206912\">legal advice<\/span> only when they have a problem, using business assistance from the <span data-term-id=\"54206951\">Small Business<\/span><span data-term-id=\"54206951\"> Administration<\/span> or their local <span data-term-id=\"54206909\">Small Business<\/span> Development Center.<\/p>\n<\/li>\n<\/ul>\n<p>FindLaw\u2019s\u00a0<a href=\"https:\/\/www.findlaw.com\/smallbusiness.html\"><span data-term-id=\"54206909\">Small <\/span><span data-term-id=\"54206911\">Business<\/span><span data-term-id=\"54206911\"> Law<\/span><\/a>\u00a0section is an excellent resource for <span data-term-id=\"54206933\">small-<\/span><span data-term-id=\"54206919\">business<\/span><span data-term-id=\"54206933\"> owners<\/span> to help decide if they need a lawyer.<\/p>\n<h2>Work With a Business Lawyer for Help<\/h2>\n<p>Frequently asked questions will only take you so far. Contact a\u00a0<a href=\"https:\/\/lawyers.findlaw.com\/business-organizations\/?fli=dcta\" target=\"_blank\" rel=\"noopener\">business organization attorney<\/a>\u00a0for guidance on the business licenses you need and the best <span data-term-id=\"54206920\">business structure<\/span> for your company.<\/p>\n<p>Getting professional help early in your business process can help you avoid major <span data-term-id=\"54206910\">legal issues<\/span> later.<\/p><\/div>\n\n\n<div class=\"was-this-helpful\">\n    <div\n            class=\"was-this-helpful__question-container\"\n            aria-labelledby=\"was-this-helpful__question\"\n            role=\"group\"\n    >\n        <span\n                id=\"was-this-helpful__question\"\n                class=\"was-this-helpful__question fl-text-lg-bold\"\n        >Was this helpful?<\/span>\n        <button\n                class=\"was-this-helpful__button fl-text-sm\"\n                aria-label=\"Yes\"\n                value=\"yes\"\n        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class=\"was-this-helpful__feedback-button was-this-helpful__feedback-button--positive at-feedback-submit fl-button secondary\"\n                    type=\"submit\"\n                >\n                    <span class=\"fl-button-content\">Submit<\/span>\n                    <i\n                        class=\"fa fa-angle-right medium\"\n                        aria-hidden=\"true\"\n                    ><\/i>\n                <\/button>\n                <button\n                    class=\"was-this-helpful__feedback-button was-this-helpful__feedback-button--cancel fl-button primary disabled\"\n                    type=\"reset\"\n                >\n                    <span class=\"fl-button-content\">Cancel<\/span>\n                    <i\n                        class=\"fa fa-times-circle medium\"\n                        aria-hidden=\"true\"\n                    ><\/i>\n                <\/button>\n            <\/div>\n        <\/form>\n    <\/div>\n    <div 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