29% of entrepreneurs say they’ve gone into their own business because the 9-to-5 life wasn’t for them. On the surface, it sounds ideal: you don’t have to answer to anyone, can make your own hours, and have the freedom to do whatever you want with your company.
However, it’s not all fun and games. There are legal considerations to take into account, especially if you don’t want trouble with other businesses and/or the authorities.
Read on to see the legal aspects of business you need to think about before you jump into things.
Legal Aspects of Business
Business Formation
You know what you want to sell, so you’re ready to form your business. But it’s not as simple as filling out a form and opening up shop.
For one, you need to choose the right legal structure. Some common ones are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. The one you choose will affect your liability, tax obligations, and business management, so it’s worth it to sit down and do thorough research before you make a decision.
Afterward, you’ll need to file the correct paperwork to get things rolling. Thankfully, you can get business registration services from Business Anywhere to make things easier. We’ll help you register your company in minutes.
Intellectual Property
Are you bringing something new to the market? It can be exciting to do so, but this comes with its own spiderweb of complicated matters.
Before you can start profiting off this intellectual property, you’ll need to ensure all your ducks are in a row. Otherwise, if people steal your ideas and therefore, steal your customers, you can’t do anything about it.
You’ll have to protect this intellectual property by applying for trademarks, patents, and copyrights. These processes can take some time to complete, so don’t plan on running your business until these go through.
Keep in mind that this applies to your company name too. Do a comprehensive search before you select one to make sure that you won’t infringe on a company trademark. Once you’ve decided on an untaken name, we recommend that you register the name and logo to prevent others from taking these.
Licenses and Permits
Whether you’re serving food or selling stationery, you’ll need licenses and permits to operate legally. In most cases, in addition to a business license, you’ll also need a trading license and sales tax permit.
Not only are there different laws specific to the type of business you run, but they vary from state to state, and can even be different in each city.
There are also zoning laws to deal with. Don’t make assumptions either; just because a similar business is already running in the area doesn’t necessarily mean yours can. It’s very possible that zoning laws have changed since their opening, and they were allowed exemptions.
To avoid legal issues, and to save some time, consult with a lawyer. They’ll know exactly what you can or can’t do, and can point you in the right direction.
Contracts
One of the most important legal considerations when starting a business is whether you’ll work solo or hire employees.
If you decide on the latter, then you’ll need to have sound contracts in place for your workers. These should clearly state their salaries, benefits, and holiday entitlements, as well as what their duties at work are.
Even if you’re handling the business on your own, you’ll most likely have contracts with other professionals. For example, you might sign a contract to rent or own property. You may also make agreements with vendors to supply you with certain things at specific prices and delivery times.
You should go through these contracts with a fine tooth comb, as the wording can be tricky. Have a lawyer look over them to ensure you’re not being taken advantage of and that you understand everything you’re signing.
Employment Law
On that note, you should be familiar with employment laws when you’re putting together your worker contracts. In addition, you need to follow these laws to a ‘T’ while these people are under your employment. Otherwise, you can face expensive lawsuits.
These laws govern how you hire people, as well as how you manage and fire them. Other things you should be aware of include regulations surrounding anti-discrimination, minimum wage, overtime, and health and safety.
Taxes
Unfortunately, you won’t be able to keep every cent you earn from your company. Every business has an obligation to pay taxes at the federal, state, and even local levels.
Examples of ones you’d have to pay include income, sales, payroll, and property taxes, and they all have varying due dates too. This makes taxes one of the most bothersome legal aspects of business, especially since there are hefty fees for paying them late or not at all.
So in addition to having the counsel of an expert attorney, you should also hire an experienced accountant. They can assist with taxes, as well as other tedious financial tasks, such as payroll, audits, and bookkeeping.
Compliance
We’ve already covered some aspects of compliance, such as employment law and taxes. However, that’s only the tip of the iceberg.
To spread awareness, you’ll probably market your business. But there are advertising and marketing regulations you need to follow before you exercise your creative freedom.
Also, you’ll have to run your business in accordance with environmental regulations to ensure your carbon footprint is as small as possible. Plus, you’ll need to comply with data privacy laws so your customers’ sensitive data isn’t compromised.
Take These Legal Aspects of Business Into Consideration
Striking out on your own can be liberating, but it’s not as easy as many think. There are several legal aspects of business to consider, and we haven’t even listed them all.
So before you make a hasty decision, think about what you’re trying to achieve and how realistic it is. Then factor in the legalities of starting a business. If it’s still worth it to you, then you just may have a fantastic idea on your hands.
For comprehensive business formation services, sign up with Business Anywhere today.
