Typically, starting up a business can be exciting and daunting. After making your business plan, identifying your target market, and determining your products or services, the next thing you should prioritize is the compliance with all the legal obligations of running a startup company. When you know how to cover your legal bases, you’ll be ready to jump into the competitive marketplace, focusing on growing your business and making it more successful.
So, if you’re looking to start your company legally, below are four legal requirements you should know about:
- Know Your Business Structure
As a business owner, one of the essential legal requirements you’ll need to take care of is to select the business structure you want for your company. Typically, the specific business structure you choose may determine your federal tax obligations, which should be met upon setting up your startup company.
The following are the two business structures you can choose from:
- Corporation: It refers to a company that’s known for being a legally separate entity from its owners. While this business structure personally protects the owners from liability, it can be very expensive and complicated to establish. For example, starting up a corporation requires filing a separate income tax on your profits.
- Limited Liability Company (LLC): It refers to a company structure that aims at protecting you from personal liability in connection with business issues. For example, if your business is being sued for money claims, the creditors can’t run after your personal assets. Also, when it comes to filing of taxes, establishing an LLC means filing your business income as part of your personal income taxes.
As you can see, choosing the business structures you want for your startup can be a complicated undertaking. To minimize future risks and make a sound decision, you have to be familiar with the advantages and disadvantages of both structures. Luckily, a business lawyer can help you understand each structure and provide you valuable legal advice as to which one is appropriate for your needs.
- Get Your Business Name Registered
Once you’ve decided on the business structure you want for your startup, the next step is to register your business name. In doing so, it’s important to pick one that hasn’t been claimed and one that perfectly represents your brand.
Generally, the registration of a business name can be done through the following:
- Entity name – As a startup, you should have an entity name that legally protects your business at a state level. When filing for a legal entity, you may have to submit your Articles of Incorporation or Articles of Organization.
- Trademark – If your business needs protection at a federal level, you should register a trademark. You can also use your trademark to safeguard your brand against potential competitors.
- Domain name – You can also register this to provide protection for your business’ web address. It’s highly recommended to have it registered since most competitors are also doing business online.
- Secure An Employer Identification Number
Starting up a business also requires you to have an Employer Identification Number (EIN). If your startup company is located in Australia, this EIN is usually called as Australian Business Number (ABN). But regardless of what it’s called, you need to register for this number for tax purposes and other related business matters, including the opening of a business bank account, filing of tax returns, and application for business licenses.
However, before getting an Employer Identification Number, make sure to talk to a legal professional who can advise you on these matters to ensure your startup will be launched legally. This is one of the reasons why you shouldn’t take the importance of having a business lawyer by your side for granted.
- Apply For Business Licenses Or Permits
When building a startup business, it’s also crucial to obtain the necessary licenses and permits. Depending on the business industry you’re in, you may have to be legally licensed at the federal, state, or local level before you can legally launch your company. For instance, if your business is involved in an activity that’s regulated by a federal agency, there’s a need to apply for federal licenses and permits. Also, state licenses and permits may be required depending on your business’ location.
That being said, it’s best to consult a business lawyer first before applying for licenses and permits. They know exactly what needs to be done for your application, including the requirements that should be complied to ensure you’ll have a license and permit to operate your business. So, if you’re looking for an experienced lawyer, seeking help from a legal recruitment agency can be an excellent idea. They can provide you with top legal talents who can professionally assist you in all legal matters.
When you’re starting a company, there are many legalities that should be worked through to remain compliant with the laws and regulations governing your business. Thus, by keeping these legal requirements in mind, you can guarantee your legal compliance from beginning to end. Just make sure to have a lawyer by your side who can guide you throughout the process.