5 Legal Tips for Starting a Business
So you are thinking of starting a business and you have some ideas about what might work and inspire investment. But you are not quite sure how to go about starting up your startup, or even where to begin researching all the relevant legal issues. What do you do?
Start here. This list of tips on initial business steps should help get you started on creating a business that is legal and successful.
Tips for Starting a Business
- Incorporation: You know that businesses are incorporated, right? Basically, that means registering your business in a state and creating a legal record of its existence, intent, structure, and responsible parties. The form of incorporation that is best for your business depends on what you plan to do, of course, but it's best to keep things simple when you are small and starting up. On and don't forget business licenses and permits!
- Non Disclosure Agreements (NDA): Some experts advise against requiring potential investors to sign NDAs before talking to them about your business idea. It can be a deterrent for the other party and presents an unnecessary obstacle. According to Richard Harroch, writing for All Business, this is a waste of time. "For the most part, it's not the idea that is important, it's the implementation of the idea and the entrepreneurs behind it," he states. But that doesn't mean you should ignore intellectual property protections.
- Copyrights, Trademarks, Patents: Depending on the type of business you're starting and your relationship to an invention, idea, name, or process, you may wish to pursue the appropriate intellectual property protections. For this, you should speak to a lawyer who can advise you on the process and the costs and file the right papers.
- Lawyer Up: In fact, it wouldn't hurt to get the names of a few attorneys, or one great lawyer who knows people. You will continually run into issues that require legal advice as you start a business. One lawyer is unlikely to suffice given the range of topics implicated -- from compliance to tax and everything in between (including incorporation) -- but you don't have to hire an army. Your best bet is to have a single trusted advisor who can direct you as needed.
- Tax Talk: Be very careful with your business taxes. There is so much to do when you start something new that you may be tempted to throw receipts in a drawer and think about them around April of next year. Don't do that. Talk to an accountant or lawyer from the beginning. Get bookkeeping software. Most importantly, stay on top of it all, whatever you use. The last thing your business wants is trouble with the Internal Revenue Service.
Consult With Counsel
Before you take any big steps, consider consulting with counsel. Talking to a lawyer or two could give you more ideas about what you need to do, specific to your business, and ensures that you start on the right footing, prepared to spring to success.
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